Natural gas futures plummeted 11% in the U.S. as forecasts shifted warmer through the middle of next month, allaying concern about tight domestic supplies amid a global shortage of the heating fuel.
The expiration of the December contract last week amplified the market’s volatility. Prices closed 7.5% higher on Friday as traders rushed to close out bearish positions before the contract rolled off the board. Contracts for January delivery fell 62.3 cents to settle at $4.854 per million British thermal units in New York on Monday.
Since late summer, volatility in gas prices has stayed well above the average for the past decade even after a drop from last month’s peak as traders try to gauge whether winter cold will strain inventories.
Late-autumn cold in Europe and Asia has sparked fears that global gas shortages will worsen as nations struggle to refill stockpiles. But so far, there’s little sign of a similar situation developing in the U.S., even as shale producers keep a lid on output and the country’s exports of liquefied natural gas surge to a record. U.S. gas stockpiles are only 1.6% below normal for the time of year.
The so-called widowmaker spread between March and April futures, essentially a bet on how tight inventories will be at the end of the northern hemisphere’s winter, shrank to 41.5 cents, the narrowest since June, after widening to $1.909 last month.
Much of the U.S. should see milder-than-usual weather this week, with temperatures expected to peak in the 50s Fahrenheit in Minneapolis and Chicago, according to the Weather Channel. The western half of the country should continue to see above-normal temperatures at least through Dec. 13, private forecaster Commodity Weather Group said in a note to clients.
“Particularly mild weather from Wednesday to Friday will decimate physical market demand and intensify downward pressure on Henry Hub spot prices,” EBW AnalyticsGroup said in a note to clients.
“The downward pressure should remain,” said John Kilduff, founding partner at hedge fund Again Capital in New York. December start is looking like a “bust in terms of gas demand,” while storage levels have improved this fall, he added. “We’re decently supplied now.”
Norway’s revenues from oil and gas production hit a record high this year and are showing no signs of slowing down
While Norway is a major supporter of clean energies, it is also a firm believer that the energy transition can only be achieved by using the profits from oil and gas production
The future is bright for Norway’s energy giant Equinor, which will be able to take advantage of growing energy demand and play a leading role in the coming energy transition
Norway’s oil and gas production is at an all-time high, bouncing back solidly from a year of pandemic restrictions and curbs on production. Norwegian firm Equinor is running the show with oil and gas revenues doubling and new discoveries by the company suggesting that Norway will continue to produce fossil fuels well into the coming decades. As the oil industry was battling with Covid-19 pandemic restrictions and the severe decrease in oil demand throughout 2020, Norway was able to weather the storm thanks to tax breaks on oil and gas firms, allowing them to come back stronger in 2021. These actions by the government have been criticized by environmental activists hoping for a swifter transition to renewable energy. But for a country founded on oil revenue, it is hardly surprising that Norway wants a continuing piece of the action as post-pandemic oil demand rises.
Norwegian Prime Minister Jonas Gahr Støre believes that a total end to oil exploration and production would harm the transition to renewable alternatives in a world still so reliant on oil and gas. He stated, “If we were to say from one day to the other that we close down production from the Norwegian shelf, I believe that would put a stop to an industrial transition that is needed to succeed in the momentum towards net zero…. So, we are about to develop and transit, not close down.”
Norway has also been one of the largest suppliers of gas to Europe, second only to Russia, as shortages across the region have driven gas prices to record highs. The huge gas producer earned an estimated $7.9 billion in gas revenues in October thanks to the significant hike in prices. The Norwegian government continues to support gas production as a cleaner alternative to coal in the transition to alternatives.
As Norway ramps up its oil production to meet increasing global demand and as several countries come out of pandemic restrictions and businesses start up again, the country’s oil output has been exceeding forecasts month on month. Crude oil output reached 1.82 million bpd in October, up from 1.77 million in September. Natural gas output also went up, achieving 10.4 billion cubic meters of production in October, up from 8.9bcm in September.
As output increases, so do revenues. Norway’s oil major, Equinor, more than doubled its revenues in the third quarter of 2021, compared to the same period in 2020, thanks to rising gas prices and increased oil demand. Net profits rose to $1.4 billion between July to September, according to the company
Equinor’s oil outlook is optimistic, as the company announced its 6th discovery in domestic waters this year in November. The find, north of the Tyrihans field off the coast of Norway, is thought to hold 62 billion barrels of crude. Equinor stated of the development, “Such near-field discoveries are profitable, robust against fluctuations in oil (and) gas prices, they have a short payback period and low emissions.”
Despite ongoing growth in its oil operations, the company is not shying away from the energy transition, with plans to invest $23 billion in renewable energy by 2026. Equinor aims not only to be an international major in low-carbon oil production and carbon capture and storage technologies but also to become a market leader in wind and solar power. As Equinor continues to provide vital oil and gas supplies to Europe at a time where prices are rising to unprecedented levels and several countries are facing energy shortages going into winter, the company is optimistic about its role in traditional energy provision as well as its ability to use profits to invest in the long-term transition.
Following months of increased production and record export levels, Norway’s oil and gas companies announced they are now increasing their investment forecasts for 2022. Tax incentives from the government to support increased oil output are part of the drive, as a national statistics office (SSB) survey showed that Norway’s largest business sector now hopes to invest $17 billion in 2022, instead of the planned $15.6 billion. Tax incentives over the coming year are expected to spur a two-figure percentage growth in investments in 2023.
There is no end in sight for Norway’s oil and gas industry, which continues to get stronger every year, despite production curbs and revenue losses during the pandemic. And with Equinor also investing heavily in renewables, it is certainly not a one-trick pony. Norway’s future in energy is looking increasingly certain, with Europe’s oil and gas demand not showing any sign of waning, Equinor appears to be the star of the show.
Russian gas producer Novatek NVTK.MM said on Tuesday its Arctic LNG 2 plant has signed loan agreements with foreign and Russian banks worth 9.5 billion euros ($10.8 billion), securing necessary external financing for the project.
Earlier this year, Novatek shareholders approved external financing of $11 billion for the $21 billion Arctic project, which is expected to start production of liquefied natural gas in 2023.
Novatek has had difficulty in securing funds from Europe, wary of political standoff with Russia as well as calls against tapping hydrocarbons in the Arctic amid efforts to tackle climate change.
Novatek said that Chinese financial institutions, including the China Development Bank and the Export-Import Bank of China, signed credit facility agreements totalling 2.5 billion eurosfor up to 15 years.
Financial institutions from the OECD member countries signed credit facility agreements totaling up to 2.5 billion euro. This includes the Japan Bank for International Cooperation (JBIC) and other lenders insured by export credit agencies.
It has not disclosed the other international lenders involved in the deal. Sources told Reuters earlier this month that Italy’s SACE may insure a loan of around 500 million euros for Arctic LNG 2.
The financing to be provided by the syndicate of Russian banks including Sberbank SBER.MM, Gazprombank GZPRI.MM and its subsidiary Bank GPB International S.A., State Development Corporation VEB.RF and Bank Otkritie Financial Corporation, will total 4.5 billion euros under the credit facility agreement, which had been signed earlier.
Arctic LNG 2 is expected to be launched in 2023 and reach full LNG production capacity of almost 20 million tonnes a year in 2026.
The project’s shareholders are Novatek (60%), TotalEnergies TOTF.PA (10%), CNPC (10%), CNOOC 0883.HK (10%) and Japan Arctic LNG, a consortium of Mitsui & Co, Ltd. 8031.T and JOGMEC (10%).
Trilogy Metals Inc. Nov. 22 reported that assay results from two holes drilled this year at the Upper Kobuk Mineral Projects in Northwest Alaska tapped high-grade mineralization beyond the current pit at the Arctic Mine project.
A 2020 feasibility study for developing a mine at Arctic details a financially robust operation that would produce 1.9 billion pounds of copper, 2.3 billion lb of zinc, 388 million lb of lead, 386,000 ounces of gold, and 40.6 million oz of silver over an initial 12-year mine life.
This operation is based on 43 million metric tons of reserves averaging 2.32% copper, 3.24% zinc, 0.57% lead, 0.49 grams per metric ton gold, and 36 g/t silver.
While high-grade volcanogenic massive sulfide deposits such as Arctic are typically mined from underground, the Arctic feasibility study details plans for a lower cost open-pit mine feeding a 10,000-metric-ton-per day mill.
Ambler Metals LLC, a joint venture operating company equally owned by Trilogy and South32 Ltd., completed an 18-hole (4,131 meters) diamond drill program this year designed to upgrade a portion of the indicated resources at Arctic to the higher confidence measured category, as well as provide material for metallurgical testing and geotechnical information.
“The latest drilling program at Arctic will assist Ambler Metals in the continued de-risking of the project and in the detailed engineering of the asset,” said Trilogy Metals President and CEO Tony Giardini.
The first assay results are from two geotechnical holes, AR21-0173 and AR21-0175, drilled to test the stability of the pit wall on the northeast side of the proposed Arctic Mine. Both encountered high-grade mineralization beyond the currently defined pit at Arctic.
Hole AR21-0173 cut 3.77 meters averaging 2.15% copper, 0.87% zinc, 0.34% lead, 0.83 g/t gold, and 82.89 g/t silver from a depth of 110.5 meters at the north edge of the deposit. This hole shows that one of the high-grade zones in the mine plan extends north just below the proposed open pit.
Hole AR21-0175 cut three high-grade zones on the northeast edge of the proposed open pit. From a depth of 71.9 meters, this hole cut 24.94 meters averaging 1.85% copper, 2.96% zinc, 0.57% lead, 0.28 g/t gold, and 27.09 g/t silver.
This includes 5.62-meter higher-grade subinterval averaging 4.94% copper, 10.57% zinc, 1.71% lead, 0.4 g/t gold, and 58.9 g/t silver.
“The initial drilling results from Arctic continue to confirm our belief that the Arctic deposit is one of the highest grade polymetallic mineral projects in the world,” said Giardini. “Not only is Arctic high-grade, but it also has wide zones of mineralization that are relatively close to surface.”
With the slow turnaround time at assay labs, these are the first results from the 2021 drill program at UKMP.
“It is good to see the results of our 2021 drill program are beginning to come in from ALS Laboratories. Also, good to see these high-grade extensions, just outside the proposed pit and relatively close to surface, in holes that were primarily designed to collect geotechnical information,” said Trilogy Metals Vice President of Exploration Richard Gosse. “We are looking forward to seeing the results of the remaining 16 drill holes at Arctic as well as from the regional drill program.”
POLITICS:
From the Washington Examiner, Daily on Energy:
SENATE GOP STALLS NDAA OVER NORD STREAM 2: Senate Republicans blocked the annual National Defense Authorization Act yesterday as they bucked Democratic leadership for not allowing consideration of various Republican amendments, including one that would impose sanctions in connection to the Nord Stream 2 pipeline, the Washington Examiner’s Susan Ferrechioreports.
Republican hopes of punishing the pipeline operator and restricting what Senate Minority Leader Mitch McConnell called Russian President Vladimir Putin’s “encroachment over Europe” via the pipeline run contrary to President Joe Biden‘s approach, as his reversal of sanctions has been pitched by the administration as a means of supporting diplomacy with Germany and Russia.
CLIMATE CHANGE:
Exxon-backed scientists unveil advance for CO2 storage Ester Wells, ENERGYWIRE, November 30, 2021
Researchers say they have discovered a way to form carbon dioxide-trapping crystal structures in as quickly as one minute — the fastest formation ever documented for these structures — potentially offering a way to store billions of tons of carbon dioxide under the ocean floor in a cost-effective way.
Scientists at the University of Texas at Austin found that adding magnesium to the reaction that creates hydrates, structures that trap CO2 molecules, accelerates the reaction by 3,000 times its normal speed. They slashed the reaction time from hours or days to under a minute.
“It’s a huge deal because if you’re talking about industrial-scale carbon capture, we want hydrates to form as quickly as possible and not have to wait hours or days for them to get started, and that’s where our research comes in,” said Vaibhav Bahadur, a mechanical engineering professor at the UT Austin and lead author of the new paper, published this fall in ACS Sustainable Chemistry & Engineering.
Hydrates form when carbon dioxide is combined with water under high pressure and low temperature, according to the study. Typically, toxic chemicals like tetrahydrofuran are used to speed up the reaction, but Bahadur said these create environmental concerns.
Using metals like magnesium instead is not only safer but cheaper because they are passive processes, not requiring energy to be added, the paper found.
The team, working in partnership with Exxon Mobil Corp. and the Energy Institute at UT Austin, discovered the potential of magnesium in hydrate formation by accident, Bahadur said. The team was working with aluminum in another experiment and saw that the metal helped catalyze that reaction.
“It was a chance discovery,” he said. “We saw that aluminum was working well and thought that magnesium might be even better because it’s more reactive than aluminum, and it’s in the same category of metals as aluminum.”
The researchers said that carbon would be captured from the air or from industrial emitters like power plants, then pumped into reactors sitting on the ocean floor because the naturally occurring pressure and temperature conditions there are ideal for hydrate generation. Then, hydrates created using the rapid new process within those reactors could be injected into subsea rock formations, where they can be stored, Bahadur said, “literally forever.”
Carbon capture utilization and storage is “the only group of technologies that contributes both to reducing emissions in key sectors directly and to removing CO2 to balance emissions that cannot be avoided,” according to the International Energy Agency. A 2020 IEA report said that while carbon capture is a critical part of reaching net-zero climate targets, the 20 commercial CCUS operations worldwide are “nowhere near the amount required to put global emissions on a sustainable path.”
The researchers said hydrates theoretically could provide a viable storage option if carbon capture were to reach levels called for by IEA and other organizations to reach climate targets.
The sluggish rate at which hydrates form has been the key barrier to their broader application in the past — so overcoming it now could mean a faster, greener method of carbon storage that could do away with toxic chemicals normally required to speed up the reaction, Bahadur said. The scientists are interested in commercializing the technology, following patent approval.
“We need new techniques to sequester carbon,” Bahadur said. “Right now, we’re sequestering about half of a percent of the carbon that will need to be sequestered by 2050 … so this is an exciting way of potentially locking up carbon for eternity.”
It’s time to stop @POTUS & the Democrats’ declared war on American energy. If @POTUS and his department of the @Interior get their way, energy prices will go up even higher. pic.twitter.com/q9341UsmI2
With the Senate now considering the legislation to fund President Joe Biden’s “Build Back Better” agenda, most voters oppose the controversial bill.
A new national telephone and online survey by Rasmussen Reports finds that 51% of Likely U.S. voters oppose the $2 trillion “Build Back Better” bill, including 40% who Strongly Oppose it. Forty-two percent (42%) support the bill, including 27% who Strongly Support it. (To see survey question wording, click here.)
The House of Representatives passed the “Build Back Better” bill by a narrow 220-213 margin on November 19, but the legislation faces significant opposition in the Senate. Nearly half (48%) of voters believe that if Congress passes the legislation, it will be bad for the economy. Thirty-five percent (35%) think “Build Back Better” would be good for the economy, and nine percent (9%) believe it would not make much difference.
While 69% of Democratic voters support the “Build Back Better” bill – including 50% who Strongly Support it – the legislation is opposed by 76% of Republicans and 54% of voters not affiliated with either major party. Sixty-five percent (65%) of Republicans and 41% of unaffiliated voters Strongly Oppose the bill.
The survey of 1,200 U.S. Likely Voters was conducted on November 22-23, 2021, by Rasmussen Reports. The margin of sampling error is +/- 3 percentage points with a 95% level of confidence.
Sixty-four percent (64%) of Democrats believe it would be good for the economy if Congress passes the “Bill Back Better” bill, but 74% of Republicans and 52% of unaffiliated voters think it would be bad for the economy.
More men (52%) than women voters (45%) think “Build Back Better” would be bad for the economy, and men (44%) are also more likely than women (36%) to Strongly Oppose the bill.
Voters under 40 are divided over “Build Back Better,” with 46% supporting and 40% opposing the legislation, but a majority of older voters are opposed, and 53% of those 65 and older Strongly Oppose the bill.
“Build Back Better” is supported by 39% of whites, 58% of black voters and 43% of other minorities, while it is opposed by 54% of whites, 33% of black voters and 49% of other minorities.
Voters with incomes of $200,000 or more, and those with postgraduate education, are most likely to believe passage of “Build Back Better” would be good for the economy.
Government employees (54%) are more likely than private sector workers (38%) to support passage of the “Build Back Better” legislation.
Not surprisingly, President Biden’s strongest supporters are most likely to support passage of the “Build Back Better” bill. Among those who Strongly Approve of Biden’s job performance as president, 92% support the legislation, while among those who Strongly Disapprove of Biden’s performance, 88% oppose passage of the “Build Back Better” bill.
The oil producers’ group OPEC+ will likely take a cautious stance when deciding this coming week whether to go ahead with planned output increases after the emergence of a new coronavirus variant sent crude prices tumbling, according to Vitol Group.
There are signs that demand may be weakening in some markets going into the winter months in Asia and Europe, said Mike Muller, the head of the Asia unit at Vitol, the world’s biggest independent oil trader. The new coronavirus variant will probably lead to more flight cancellations this week, he said.
U.S. crude plunged more than 10% Friday, dropping below $70 for the first time since September, and Brent had its seventh-steepest drop on record as news of the omicron variant spooked traders amid light trading after the American Thanksgiving holiday. OPEC+ was already voicing concern over excess supply after the U.S. and others announced plans to release oil from strategic reserves.
“OPEC+ have erred on the side of caution,” Muller said on a weekly webinar by Dubai consultancy Gulf Intelligence. “Post facto they’ve proven to be right. It is likely they will take into account these fundamentals and the possibility of a demand hit over the winter months.”
The Organization of Petroleum Exporting Countries and partners like Russia will meet this coming week to consider whether to enact a planned 400,000 barrel-a-day production increase. The group has been slowly sending more oil to global markets after slashing production last year at the onset of the pandemic. The group, which will be discussing January production, can pause the monthly increases to account for fluctuations in demand and some members favor that approach.
“The market was rattled by fear of the unknown,” Muller said of last week’s rout, adding that he thought the drop was excessive given not enough is known about the new Covid strain.
McDermott recently completed a liquefied natural gas (LNG) construction study identifying tangible reduction pathways toward net-zero construction emissions on behalf of Shell Global Solutions International B.V.
The results of this study provide a strategic framework for reducing greenhouse gas (GHG) emissions in LNG facilities during the project execution phase.
“Operators continue to seek actionable plans to advance their commitments to net-zero emissions by 2050,” said Samik Mukherjee, Executive Vice President and Chief Operating Officer. “Leveraging our unique LNG and modularization expertise, McDermott has developed multiple, innovative pathways to reduce and/or eliminate emissions throughout the life cycle of an LNG facility. We believe, in future scenarios, up to 65 percent of emissions associated with construction can be eliminated through a combination of construction execution efficiency, modularization and targeted investment in construction emissions reduction initiatives.”
Mon, November 29, 2021, 4:00 AM·4 min read
HOUSTON, Nov. 29, 2021 /PRNewswire/ — McDermott recently completed a liquefied natural gas (LNG) construction study identifying tangible reduction pathways toward net-zero construction emissions on behalf of Shell Global Solutions International B.V.
The results of this study provide a strategic framework for reducing greenhouse gas (GHG) emissions in LNG facilities during the project execution phase.
“Operators continue to seek actionable plans to advance their commitments to net-zero emissions by 2050,” said Samik Mukherjee, Executive Vice President and Chief Operating Officer. “Leveraging our unique LNG and modularization expertise, McDermott has developed multiple, innovative pathways to reduce and/or eliminate emissions throughout the life cycle of an LNG facility. We believe, in future scenarios, up to 65 percent of emissions associated with construction can be eliminated through a combination of construction execution efficiency, modularization and targeted investment in construction emissions reduction initiatives.”
Study results include emission reduction opportunities, in order of magnitude, based on mapping key sources and the identification of low-carbon alternatives during construction. These include site efficiency improvements, replacing diesel powered equipment with lower GHG intensity alternatives, module fabrication and construction and sourcing lower intensity raw materials. The study also provides more clarity on the associated environmental, social, and economic considerations of future projects.
Building on this study, McDermott is also engaging with Shell to identify low-carbon solutions to help reduce GHG emissions in McDermott’s operations.
“We are committed to monitoring and managing the carbon footprint on our projects to support our customers in meeting their net zero goals,” said Tareq Kawash, Senior Vice President, Europe, Middle East, Africa. “This study is an excellent example of how, through early engagement with Shell, we were able to identify potential low-carbon delivery solutions.”
After more than a decade of advancing multiple precious and base metals deposits and targets across its more than 49,000-acre Illinois Creek Mining District property as a private company, Western Alaska Copper & Gold is now a public junior explorer listed on the TSX Venture Exchange.
Western Alaska Minerals Corp., the new name for the mineral exploration company, became listed on the TSX.V on Nov. 15 through a reverse takeover merger with the already listed 1246779 B.C. Ltd.
Prior to the combination, 1246779 B.C. raised C$5.2 million through the issuance of 6.12 million shares at C85 cents each.
“Completion of the RTO transaction and subsequent listing of Western Alaska Minerals Corp. on the TSX.V marks a major milestone for our company,” said Western Alaska Minerals President and CEO Kit Marrs.
Marrs is joined by award-winning geologist Joe Piekenbrock, who serves as Western Alaska Minerals chief exploration officer. Alex Tong, who held senior finance roles at Energy Metals and Novagold Resources, and attorney Greg Anderson round out the newly listed company’s executive team.
“Access to the public capital markets will allow us to fully utilize our three company-owned drill rigs in a greatly expanded program so that we can unlock the potential of the Illinois Creek District,” Marrs said.
As an Anaconda Copper Company project geologist involved with the original discovery at Illinois Creek in 1980, the Western Alaska Minerals CEO is very familiar with the potential this district-scale property has to offer.
Over the ensuing four decades, multiple mineral deposits enriched with both precious and base metals have been discovered:
• Illinois Creek, a past-producing gold-silver mine.
• Honker, a high-grade gold target.
• Water Pump Creek, a carbonate replacement zinc-lead-silver deposit.
• Round Top, a porphyry copper-molybdenum-silver deposit.
The Illinois Creek Mine was an open pit and heap leach operation that produced roughly 150,000 ounces of gold and 500,000 oz of silver during three years of mining that ended in 2002. The shuttering of this operation had more to do with financial difficulties related to low gold and silver prices of the day than a lack of ore grade.
According to a calculation completed earlier this year, Illinois Creek hosts 8.7 million metric tons of indicated resource averaging 0.9 grams per metric ton (253,000 oz) gold, 34.4 g/t (9.6 million oz) silver, and 0.21% (40 million pounds) copper; and 3.3 million metric tons of inferred resource averaging 0.99 g/t (104,000 oz) gold, 36.2 g/t (3.8 million oz) silver, and 0.21% (15 million lb) copper.
This includes 7.4 million metric tons of unmined indicated resource averaging 0.98 g/t (234,000 oz) gold, 32.7 g/t (7.8 million oz) silver, and 0.17% (28 million lb) copper; and 3.1 million metric tons of unmined inferred resource averaging 1.02 g/t (102,000 oz) gold, 35.9 g/t (3.6 million oz) silver, and 0.2% (14 million lb) copper.
The heap leach pad from historical mining hosts another 1.3 million metric tons of indicated resource averaging 0.44 g/t (18,600 oz) gold, 44.3 g/t (1.9 million oz) silver, and 0.42% (12 million lb) copper.
While making the transition to a public listing, Western Alaska continued to advance exploration with a 25-hole drill program during the 2021 exploration season designed to make initial tests on a variety of high-quality targets in anticipation of introducing the property and district to the public market.
Much of this drilling targeted Waterpump Creek, which is about four miles northeast of the past-producing Illinois Creek open pit.
Based on 58 holes historically drilled by Anaconda Minerals Company and Novagold Resources Inc., 166,000 tons of historical resource averaging 9.5 oz/t (295 g/t) silver, 16.1% lead, and 5.5% zinc was calculated for Waterpump.
Looking to establish an expanded resource that is compliant with modern reporting standards, Western Alaska completed nine holes at Waterpump this year.
The best hole, WPC21-09, cut 9.3 meters of 540 g/t silver, 23.5% zinc, and 16.1% lead.
Western Alaska’s 2021 program also included two holes at Last Hurrah: a similar silver enriched carbonate replacement prospect about 2,000 meters southwest of Waterpump.
A 2,000-meter geophysical anomaly extending south of Waterpump and along the east side of Last Hurrah indicates a connection between these two silver-rich targets.
A connection that will likely be further tested with 2022 drilling at this potentially large carbonate replacement deposit.
“The mineralization is open to expansion at depth and will be a major focus of future exploration,” Marrs said. “The CRD environment at Illinois Creek has the hallmarks of a large-scale system, and we look forward to systematically exploring and advancing the project.”
Another six holes were drilled at Honker, a high-grade gold target about six miles north of the historically mined Illinois Creek deposit.
A gold-rich quartz vein that is one to five meters thick has been traced for 800 meters at Honker. Historical bulk samples collected from Honker averaged 26.5 g/t gold and 26.8 g/t silver.
Metallurgical testing shows this mineralization is amenable to heap leach recovery, indicating Honker could be a good source of satellite ore for Illinois Creek.
The Illinois Creek District property also hosts Round Top, a large porphyry copper deposit about 10 miles northeast of the past-producing mine, and TG North, a potentially larger but lower-grade zinc-lead-silver carbonate replacement target associated with Round Top.
As a private company, Western Alaska has completed 9,933 meters of drilling in 40 holes at Round Top.
Highlights from this drilling include 64.7 meters of 0.65% copper-equivalent; 166 meters of 0.51% copper-equivalent; 209.7 meters of 0.28% copper-equivalent; and 64 meters of 0.74% copper-equivalent.
Western Alaska plans to compile the results from drilling at Round Top into a maiden resource for the copper-gold deposit.
Looking ahead at 2022, the company plans to explore some of the higher-grade targets the Illinois Creek property has to offer.
“We have pursued exploration of our properties as a private company since 2008, but now as a public company we can accelerate our drilling programs at Waterpump Creek and Last Hurrah carbonate replacement deposits and our advanced high-grade Honker Gold prospect,” said Marrs.
Gov. Mike Dunleavy on Friday thanked the 14-member Governor’s Task Force on Broadband for its comprehensive and timely report on how best to connect all Alaskans with affordable, high-speed broadband. The taskforce is comprised of stakeholders who produced a comprehensive report on how Alaska can close the digital divide.
The report’s timing coincides with the news of potentially $1 billion to $1.5 billion in funding coming to the state of Alaska for broadband from the recent adoption of the federal infrastructure act.
The Broadband Task Force has been meeting since July and its members represent a broad swath of Alaska’s broadband stakeholders, including Alaska Native leaders, local government officials, urban and rural business leaders, state legislators, rural healthcare representatives, a rural school district superintendent, the telecommunications industry, the Commissioner of the Department of Education and Early Childhood Development, the Commissioner of the Department of Commerce, Community, and Economic Development, and several other participants, according to the office of Gov. Dunleavy.
The report aims to make possible for every Alaskan to participate and be competitive in the global community by facilitating access to the full benefits of broadband with improved quality of service and lower costs. The COVID-19 pandemic has heightened the need for reliable, high-speed broadband as Gov. Dunleavy issued an administrative order establishing the Broadband Task Force to provide recommendations that assist in the buildout of broadband networks in Alaska.
The list of recommendations in the report includes:
Focus on bringing every Alaskan’s home internet bandwidth to at least 100 mbps download speed and 20 mbps upload speeds (100/20 mbps).
to create an Office of Broadband within the State of Alaska, focused on the deployment of broadband infrastructure funding to build out Alaska’s networks and ensure broadband access and digital equity.
The big policy news over the break was the Interior Department’s Black Friday release of its review of oil-and-gas leasing policy.
Catch up fast: The long-awaited document recommends higher royalty rates, bidding costs and rental costs.
It also calls for a more selective and restrictive approach to deciding which lands and waters to offer, Axios’ Torey Van Oot reports.
Why it matters: While federal lands and waters are a relatively small share of U.S. production, there’s still expansive development.
Climate activists have looked to federal leasing and permitting policy as a place where the Biden administration could impose major new limits on fossil fuel development.
Yes, but: The plan stops far short of President Biden’s campaign platform, which vowed sweeping new restrictions.
The Black Friday release underscores how the administration is in a politically delicate spot-on oil-and-gas policy.
The White House faces political jeopardy from elevated gasoline prices and last week announced a major release from the Strategic Petroleum Reserve.
What they’re saying: “Lesser availability at higher prices and stricter standards for a smaller pool of bidders may not meet some environmental activists’ hopes for an outright leasing ban,” the research firm ClearView Energy Partners said in a note.
“But…this approach could still significantly curtail future federal oil and gas production activity while remaining consistent with existing laws.”
The Monday Chart| To put Alaska's in-state gas prices in global context, once wkly we compare Enstar's current Gas Cost Adjustment v. global markers. 2021 Enstar price 77% ⬇️ Asia, 56% ⬆️ L48. 5yr avg, Enstar 30% ⬇️ Asia, 115% ⬆️ L48. #aklegpic.twitter.com/PMX8GZZMey
The legislation will likely undergo several more changes.
The House on Friday passed a roughly $2 trillion bill incorporating the core of President Joe Biden’s economic agenda — ramping up funding for the social safety net and increasing taxes on corporations and the wealthy — sending it on to the Senate, where it’s likely to be significantly reshaped.
The legislation will likely undergo several more changes, both to get all 50 members of the Senate Democratic caucus on board with it, and to comply with the chamber’s complicated rules to avert a filibuster, in face of Republican opposition.
Here’s where the bill, which passed the House without any GOP support, stands and what is likely to change:
Corporate Taxes
The bill imposes a 15% minimum corporate levy on companies that have traditionally been able to pay little-to-no taxes because they were eligible for a long list of credits and deductions. It also includes a 1% excise tax on companies when they buy back their own stock. The 21% corporate rate is left untouched, maintaining a key part of President Donald Trump’s 2017 tax law.
International Tax Changes
A 15% global minimum tax on corporations’ foreign profits is set — implementing a key portion of a deal made with approximately 140 countries earlier this year. There’s also a series of changes that would increase taxes on companies that shift their profits offshore.
Levies on High Earners
A millionaire surtax would place a 5% levy on individual incomes in excess of $10 million and an additional 3% tax on those over $25 million. There’s a 3.8% investment income tax for high earners who own businesses and a limit on how business owners can use losses to reduce their taxes. The plan puts a $10 million cap on individual retirement accounts, after concerns that some wealthy individuals were using these tax-advantaged vehicles to skirt IRS bills.
SALT Deduction
After weeks of haggling, House lawmakers settled on raising the cap on the federal deduction for state and local taxes, or SALT, to $80,000 from the $10,000 imposed by Republicans in 2017. The higher cap would be in place through 2030, and then revert to $10,000 in 2031.
This is likely to undergo changes in the Senate, where key members, including Bernie Sanders of Vermont and Bob Menendez of New Jersey, said they prefer to focus on limiting the universe of people able to claim the SALT deduction to those earning under a certain amount — potentially around $400,000 a year.
IRS Enforcement
The bill would give the Internal Revenue Service an additional $80 billion to hire more auditors, improve customer service and modernize technology. Democrats hoped to pull in an additional $400 billion in new revenue from cracking down on tax cheats and increasing compliance. But CBO concluded IRS enforcement would raise $207.2 billion over a decade, or $127.2 billion after subtracting the $80 billion in additional funding for the agency, according to a footnote in the estimate. However, it is not included in the official tally because of certain budget estimating rules.
Child Tax Credit
The bill would extend through 2022 the extra $250-to-$300 monthly payments per child that parents earning up to $150,000 are now getting. The legislation also makes the tax credit permanently refundable. Democrats are hoping the popularity of the enlarged benefit means they can extend it further in the future.
Child Care
The plan approves funding for children under five, as well as increases in wages for childcare workers. The amount parents pay for childcare would be capped, to ensure that no family pays more than 7% of their household income.
Pre-School
The plan includes funding for states to start or grow universal pre-kindergarten for three- and four-year-old children. States would be directed to begin rolling out the programs in high-need and low-income areas first before expanding to other areas.
Paid Leave
A last-minute addition to the House package provides four weeks of paid parental and medical leave, starting in 2024, for workers who don’t receive such a benefit from their employers. The House had dropped the measure last month but reinstated it after pressure from lawmakers and the public. The idea is likely to continue being debated in the Senate, where Senator Joe Manchin, a West Virginia Democrat and crucial swing vote, has said he is concerned about the cost.
Renewable Energy Benefits
Some $300 billion — by far the largest component of the climate spending in the package — would go to expanding a slew of tax credits for renewable power, electric vehicles, biofuels, and energy efficiency. The credits could accelerate investments in both utility-scale and residential clean energy as well as electricity transmission, power storage and clean-energy manufacturing.
New Bans, Methane Fees
Plans would block oil drilling in most U.S. offshore waters and Alaska’s Arctic National Wildlife Refuge. Oil and gas companies would be forced to pay for excess methane leaking from wells, storage sites and pipelines for the first time. That methane provision could be watered down in the Senate, however, according to analysts.
EV Tax Credit
Under the bill a $7,500 consumer tax credit would be made refundable and expanded by $4,500 for cars assembled domestically by plants represented by unions. An additional $500 bonus would be added for vehicles that use batteries made in the U.S for a total of $12,500. The legislation also creates a new $4,000 tax credit for the purchase of used electric vehicles.
Drug Prices
The bill would empower the government to negotiate with pharmaceutical companies on drugs that have been on the market for at least seven years, or longer for more complex medicines. Drugmakers would be required to rebate the government for raising the price of their product above the pace of inflation, starting in 2023.
Obamacare Extension
The package represents a massive investment in bolstering the Affordable Care Act to make good on the health law’s promise of reasonably priced insurance coverage. It would extend boosted premium subsidies into 2025 and offer a new tier of low-cost plans to people in the 12 states that have declined to expand their Medicaid programs under the ACA.
Medicaid Boost
One of the largest investments the package makes is in Medicaid’s home- and community-care programs. Democrats are proposing to inject states with $150 billion to give more elderly and disabled Americans the opportunity to get long-term care at home as well as to boost pay for home care workers.
Medicare Expansion
For the first time, Medicare would cover hearing services for seniors if the bill were enacted into law. Progressive Democrats had pushed for a much wider expansion of Medicare benefits, including dental and vision services, but were blocked by party moderates like Manchin. Sanders has said he still wants dental and vision benefits to be added back.
Immigration
The House measure would offer parole status to an estimated 6.5 million undocumented immigrants who entered the U.S. before 2011, offering deportation protections and work permits if they meet certain requirements. It’s a big step away from the pathway to citizenship initially sought by Democrats in both chambers, but the Senate parliamentarian has twice rejected proposals in that chamber that would do that — arguing that they aren’t budget-oriented enough to qualify for the so-called reconciliation process that bypasses a Senate filibuster.
Parliamentarian Elizabeth MacDonough still hasn’t determined whether a similar parole proposal drafted by Senate Democrats complies with reconciliation rules.
Environmentalists are fuming after the Department of the Interior auctioned leases to drill for oil in an 80-million-acre section of the Gulf of Mexico on Wednesday morning. The Bureau of Ocean Energy Management sold 308 tracts covering 1.7 million acres to fossil fuel giants such as Chevron and ExxonMobil.
“This morning was met with extreme disappointment, depleted hope, and shattered trust,” said Hallie Templeton, legal director for Friends of the Earth, in a statement. “The Biden administration has opted to move forward with relinquishing all remaining parcels of the Gulf of Mexico to oil and gas interests. The decision is based on unlawful analysis that ignores climate change and the serious environmental injustice posed to the Gulf’s frontline communities. We are left aghast that the administration has ignored its clear authority to defer the sale and our final hope lies with the federal court to remedy these violations.”
While President Biden has made action to reduce greenhouse gas emissions a centerpiece of his legislative and regulatory agenda and recently proclaimed at the U.N. Climate Change Conference in Glasgow that the United States is a global leader on combating climate change, environmental activists argue that the administration could have refused to move forward with the auction.
The White House contends that it had no choice, due to a court order issued in June. During the 2020 campaign, President Biden pledged to end fossil fuel leasing offshore and on federal lands. This was a major concession to climate activists, who argue that the government shouldn’t let public lands and waters be used to make climate change worse and to risk the other environmental impacts of oil and gas exploration.
At first, Biden did attempt to stop future fossil fuel leasing. In his first week in office, Biden signed an executive order issuing a “temporary pause” on oil and gas lease auctions on federal land and water.
Louisiana and 12 other states took the administration to court, arguing that already-planned lease sales must continue. A Trump-appointed federal district court judge in Louisiana agreed, and he ordered the administration to complete the sale.
We believe the decision is wrong, and the Justice Department is appealing it,” said Jen Psaki, Biden’s press secretary, when asked about the sale in a press conference on Monday. “So it’s in the courts; it’s in a legal process. We’re required to comply with the injunction. It’s a legal case and legal process, but it’s important for advocates and other people out there who are following this to understand that it’s not aligned with our view, the president’s policies, or the executive order that he signed.”
But some environmental law experts think the administration had more options. On Aug. 31, Earthjustice filed a federal lawsuit in the D.C. Circuit Court, on behalf of Friends of the Earth, the Sierra Club and the Center for Biological Diversity, that would, if successful, force the administration to reverse course before the sales from the auction are formally completed.
“There are three things [the administration] could have done that they have just chosen not to do, that could get them out of” holding the auction, Drew Caputo, a vice president of litigation at Earthjustice, told Yahoo News.
“The first stems from the fact that the court ruling is wrong,” Caputo said. “The court ruling says that if you write a five-year leasing plan and it has a lease sale in it, you have to go forward with the lease sale. … That’s wrong legally because there are plenty of cases out there that recognize that the government has the ability to adapt and has the discretion to delay or cancel lease sales.
“Administrations of both parties have regularly not gone forward with lease sales contained in five-year leasing plans — including most recently the Trump administration, which last year, in 2020, delayed an oil and gas lease sale in the Gulf of Mexico for economic reasons,” Caputo noted.
He argues the Department of Justice could have filed an immediate appeal and sought a stay from the appeals court of the district court order. “They didn’t even try to do that,” Caputo said. “They sat around for two months after the judge ruled, and then they filed an appeal. But they never sought to accelerate or expedite that appeal and instead went all-in on the lease sale.”
The National Environmental Policy Act (NEPA) “requires that they do a full enviro analysis of the consequences of the sale, and among the consequences of the sale they have to consider is the consequences for climate change,” he said. “Their environmental analysis says that it would be worse for climate change to cancel the sale than to proceed with it.”
This conclusion — that producing up to 1 billion barrels of oil would be better for climate change than not doing so — assumes that the oil not produced domestically will all be imported from even dirtier sources. “It ignores basic economic laws of supply and demand, which is that when you decrease the supply of something, something happens to price that could affect demand,” said Caputo. “But, most importantly, two federal courts since last year have considered that exact same climate analysis in connection with two other oil and gas decisions, and rejected it as absurd, under NEPA.”
Lastly, the Outer Continental Shelf Lands Act (OCSLA) gives the president the ability to withdraw offshore areas from oil and gas leasing. In December 2016, then-President Barack Obama used that authority to withdraw most of the Arctic Ocean from oil and gas exploration and development.
“The Biden administration could have used the same withdrawal authority under OCSLA to withdraw some or all of the waters,” Caputo said. “They didn’t do that either.”
Asked about these arguments, the Department of the Interior sent a statement, attributed to spokesperson Melissa Schwartz, that began: “The Department is complying with the U.S. District Court’s decision regarding Sale 257 while the government appeals the decision. At the same time, Interior is conducting a more comprehensive analysis of greenhouse gas impacts from potential oil and gas lease sales than ever before.” Schwartz went on to detail how the Interior Department is doing that, but didn’t respond directly to the arguments Earthjustice has put forth.
That response isn’t going to satisfy critics who say they suspect the administration is reluctant to fight hard against oil drilling at a time when it’s feeling political pressure over the recent rise in gasoline prices and a need to appease centrist Democrats in Congress who hail from fossil fuel-producing states.
“They’re, I think, thinking, ‘Well, we need to give a little’ on fossil fuel development,” said Caputo.
The problem, Caputo argued, is that climate change will keep getting worse if the United States keeps extracting fossil fuels in a vain attempt to keep prices from ever rising.
“It’s not like climate change is gonna sit around and wait for the politics to get better,” he said.
China is not the only big oil consumer the United States has asked to release oil from its reserves in a bid to rein in prices, Reuters has reported, citing unnamed sources.
Earlier this week, the South China Morning Post reported that President Joe Biden had asked China’s Xi Jinping to release oil from storage in a bid to put a lid on oil prices that have pushed U.S. retail fuel prices to levels that are worrying Washington.
According to the Reuters sources, Japan, South Korea, and India were also among the countries Washington approached with the suggestion to release oil from their reserves.
“We’re talking about the symbolism of the largest consumers of the world sending a message to OPEC that ‘you’ve got to change your behavior,'” one of the Reuters sources said.
The option of releasing crude from the state reserve has also been discussed in the U.S. itself, but some commentators with knowledge of how the energy industry works have expressed skepticism it would have the desired effect. One of the reasons given for this skepticism is that the president can only order the release of a limited amount of crude oil from the strategic petroleum reserve of the United States, and this amount will only have a temporary effect on prices.
“It seems the energy market is convinced that even if the U.S. resorts to tapping the Strategic Petroleum Reserve, the benefits would be minimal … to the U.S. consumer,” Oanda analyst Edward Moya said in a recent note, as quoted by Reuters.
As for whether a concerted reserve-draw effort would have the effect of making OPEC start producing more, this, too, is questionable. OPEC and its OPEC+ partners have made it clear they would remain cautious about adding too much oil to global markets, and the one-off release of a few million barrels by each of the countries contacted by the Biden administration would hardly worry them.
Spot freight rates for liquefied natural gas tankers in the Asia-Pacific have surged to record highs as a steady flow of U.S. cargoes to the region boosts demand for ships.
The cost of chartering a vessel to carry a shipment of the super-chilled fuel from Australia to Japan spiked to $316,750 per day on Tuesday, five times higher than two months ago, according to data from Spark Commodities. That beats the previous high in January during a cold snap in Northeast Asia.
The jump comes in the run-up to the peak winter consumption season and is spurring concern among Asian buyers that colder-than-normal temperatures could be exacerbated by the shortage of ships, pushing costs of the electricity feedstock even higher. Asian benchmark LNG prices are currently about $39 per million British thermal units. That’s down from a peak above $56 in early October, but above the high last winter.
“There has recently been more demand in Asia for U.S. LNG, but that also means more demand for ships to bring LNG to the Pacific,” said Joseph Sigelman, chief executive officer of AG&P Group. “The situation for ships will remain tight through the rest of winter.”
Inpex Corp., Kyushu Electric Power Co. and PTT International Trading signed a memorandum last month to collaborate on LNG trading and hiring gas tankers to optimize their operations amid the dearth of ships.
Asian buyers will be hoping there are no unplanned LNG supply outages in the U.S. over winter as that would force them to seek cargoes from Australia, Southeast Asia or Qatar, putting even more pressure on the tanker market.
They’re also seeking to avoid a repeat of last winter’s congestion in the Panama Canal, and are deploying vessels to travel around the Cape of Good Hope from the U.S. to Asia, stretching shipping capacity even further, traders said. A round-trip voyage could tie up tankers for two to three months.
The U.S. Environmental Protection Agency announced Wednesday it is extending through May a timeline to decide how or whether to proceed with proposed restrictions on mining in Alaska’s Bristol Bay region, which is known for its salmon runs.
Acting Regional Administrator Michelle L. Pirzadeh, in a written notice, said an extension through May would allow time “to consider available information in order to determine appropriate next steps, which may include revising” restrictions that were proposed but never finalized under the Obama administration.
The EPA, as part of a 2017 settlement with the developer of the proposed Pebble Mine, agreed to initiate a process to suggest withdrawing the proposed restrictions. The developer, the Pebble Limited Partnership, cast the proposed restrictions as an attempt to preemptively veto the copper and gold mine and said it wanted the project vetted through the permitting process.
The company subsequently filed a permit application with the U.S. Army Corps of Engineers.
In 2019, during the Trump administration, the EPA withdrew the proposed restrictions, removing what it called an “outdated, preemptive proposed veto of the Pebble Mine.”
That action was challenged in court, and the EPA earlier this year asked a judge to vacate the withdrawal decision and send the matter back to the agency for further consideration. The request was granted.
The EPA said the ruling reinstated restrictions proposed in 2014 and triggered regulatory deadlines to either withdraw the proposed restrictions or prepare a so-called recommended determination that would seek to prohibit or restrict activities in an area. The EPA said it can extend the deadline through a notice in the Federal Register and has chosen to do so. The new deadline is May 31.
The corps last year rejected a key permit for the project following an environmental review from the corps months earlier that the Pebble partnership had viewed as a favorable to the project. The Pebble partnership is appealing the rejection.
The Pebble partnership on Wednesday cited the corps’ environmental review and said the EPA “did not have this significant volume of detailed technical information” when it took action previously. The company also said the nation will need minerals the Pebble project could provide.
Nelli Williams, Alaska director of Trout Unlimited, said the timeline laid out Wednesday shows a “strong commitment” by the EPA “to follow through and finish the work started in 2014” to provide protections for the Bristol Bay region.
POLITICS:
From the Washington Examiner, Daily on Energy:
FIRST IN DAILY ON ENERGY — CLEARPATH ANNOUNCES 2022 ENDORSEMENTS: ClearPath Action Fund is planning to run ad campaigns supporting 13 Republicans in the 2022 election cycle.
Most notably, the advocacy arm of the conservative clean energy group is pledging $500,000 to help re-elect Sen. Lisa Murkowski, the former Energy Committee chairman who faces a contested fight to hold her seat in Alaska. This week, ClearPath Action Fund launched a $250,000 ad campaign in Alaska supporting Murkowski, recognizing her for being the “driving force” behind a massive bipartisan clean energy bill passed at the end of last Congress.
ClearPath Action Fund has earmarked $2 million to spend on its full roster of candidates, whose names are being reported here for the first time.
Along with Murkowski, they are: Sens. Mike Crapo of Idaho, Tim Scott of South Carolina, John Hoeven of North Dakota, and John Kennedy of Louisiana, and Reps. Dan Crenshaw of Texas; John Curtis of Utah; Cathy McMorris Rodgers, Dan Newhouse,and Jaime Herrera Beutler of Washington; David Schweikert of Arizona; Fred Upton of Michigan; and David Valadao of California
CLIMATE CHANGE:
Feds: Carbon tax could cut energy emissions 19% Kristi E. Swartz, CLIMATEWIRE, November 18, 2021
A carbon tax could cut U.S. energy sector emissions by as much as 19 percent in 2050 compared to 2020 levels, according to an analysis yesterday from the U.S. Energy Information Administration.
The agency’s analysis showed that a fee as high as $35 a metric ton would have a “significant” impact on the nation’s reduction of carbon emissions. A carbon tax is a fee on the sale of fossil fuels.
EIA’s analysis includes emissions from the electricity, transportation and industrial sectors.
“The U.S. electric power sector is most responsive to the carbon fees in our projections,” said acting EIA Administrator Steve Nalley.
This is because a fee would lead to coal losing market share to less carbon-intensive options such as natural gas and renewables, Nalley said. Also, EIA’s analysis shows that the fees could make emission-free nuclear reactors less likely to retire and could accelerate the pace in which renewable energy is added to the power grid.
To be clear, electric companies nationwide have been shifting away from fossil fuels as market conditions have pushed coal out of favor and natural gas and renewables have become more economic. Political, business and social pressures have led to the transformation of the energy sector as well.
Sen. Sheldon Whitehouse (D-R.I.) and Senate Finance Chair Ron Wyden (D-Ore.) have been pushing for some form of a carbon price, likely starting around $15 per ton. Both told reporters this week that the issue is still alive despite pushback from Senate Energy and Natural Resources Chair Joe Manchin (D-W.Va.) as well as political resistance from the House (E&E Daily, Nov. 17).In the past, carbon fees have found difficulty gaining traction in Congress.
EIA studied three levels of carbon fees per metric ton of CO2: $15, $25 and $35. The analysis is based on the fees starting in 2023 and increasing 5 percent a year through 2050. That would result in an initial $35 fee per metric ton increasing to roughly $132 a metric ton in 2050.
Power sector emissions would fall the most during the first five to 10 years of the tax, EIA said. After that, they would continue to decrease but at a slower rate, the agency said.
As much as 280 gigawatts of additional renewable energy could start producing electricity by 2050, according to EIA’s projections. That is compared to the agency’s baseline forecast.
“In all the cases we considered, carbon fees would have a significant initial impact on CO2 emissions, though we do not see significant additional reductions after the first decade,” Nalley said.
The Congressional Budget Office said it would complete its analysis of the roughly $2 trillion education, healthcare and climate package on Thursday, opening the door to the House approving the bill as soon as this evening https://t.co/SYGIbNgqWd
Oil will continue to be the fuel with the single largest share of the global energy mix by 2045, meeting 28 percent of energy demand then, OPEC Secretary-General Mohammad Barkindo said on Tuesday, stressing the need for investments in oil supply to meet consumption.
“Oil is expected to retain its number one position in the global energy mix and provide 28 percent of the world’s energy needs by 2045,” Barkindo said at the ADIPEC energy conference in Abu Dhabi, presenting OPEC’s World Oil Outlook (WOO).
The outlook says that global oil demand is expected to continue to grow into the mid-2030s to 108 million barrels per day (bpd), after which it is set to plateau until 2045. The industry will need cumulative long-term upstream, midstream, and downstream oil-related investments of $11.8 trillion by 2045, OPEC said when it first unveiled the outlook.
“Despite decelerating oil demand growth in the second part of the forecast period and strong growth in other energy sources, such as other renewables, gas and nuclear, oil is expected to retain the highest share in the global energy mix during the entire period. In 2020, oil accounted for 30% of global energy requirements. Alongside post-pandemic oil demand recovery, the share of oil is anticipated to gradually increase to a level of more than 31% by 2025, before it begins a decline and reach 28% by 2045,” according to OPEC’s outlook.
Discussing the need for oil investment in view of meeting demand in the long term, Barkindo said today that “any talk of the oil and gas industries being consigned to the past and of the need to halt new investments in oil and gas is wrong-headed.”
“Let me stress that the return of investments is a core objective of the Declaration of Cooperation,” he said, referring to the agreement of the OPEC+ group, which has been managing supply to the market for several years now.
OPEC, oil industry executives, and analysts have been warning this year that chronic underinvestment in oil supply, while demand is still growing, would lead to energy crunches within a few years.
Oil edged up after the Energy Information Administration said the impact of a potential release from U.S. emergency crude reserves would only be short-lived.
Futures fluctuated between gains and losses in a choppy trading session on Tuesday. The EIA said the impact on oil prices after releasing crude from strategic reserves would only be temporary, echoing several market analysts. Meanwhile, natural gas futures jumped on gas-to-oil switching concerns after Russia’s controversial pipeline, Nord Stream 2, was delayed.
“We’re still on the cusp of winter, which is the peak demand season and there’s still a bullish undertone to the market,” said John Kilduff, founding partner at Again Capital LLC. “It’s a tight set-up and still vulnerable to some upside if they don’t come through with the SPR release.”
Since hitting a seven-year high above $85 last month, oil has drifted lower amid uncertainty over U.S. policy and the possibility that a resurgence in the pandemic may crimp demand. OPEC and its allies are restoring supplies halted last year, but only gradually.
With energy prices rising, U.S. President Joe Biden has been under pressure to tap the country’s emergency crude reserves. While the U.S. has joined countries including India and Japan over concerns of supply tightness in the market, India’s Oil Minister Hardeep Singh Puri said that strategic oil reserves were intended for “force majeure situations” such as natural disasters versus short-term solutions for price increases.
Meanwhile, the International Energy Agency said Tuesday that market tightness is starting to ease as production recovers in the U.S. and elsewhere. Some consuming nations have also questioned whether a coordinated sale of strategic reserves by major oil users would help.
Prices:
WTI for December delivery rose 50 cents to $81.36 a barrel at 12:30 p.m. in New York
Brent for January settlement increased 83 cents to $82.88 a barrel
Natural gas prices jumped to a three-week high as a German regulator suspended Nord Stream 2 pipeline’s certification. The suspension will allow time for Nord Stream 2 AG, the operator of the pipeline owned by Gazprom PJSC, to set up a German subsidiary in a bid to meet European Union rules requiring gas producers to be legally separate from entities transporting the fuel.
Earlier, Federal Reserve Bank of St. Louis President James Bullard said that he thinks the Federal Reserve should go in a more hawkish direction to manage inflation. The pullback of support for the economy would lead to a stronger dollar, which would likely weigh on commodities.
An international liquefied natural gas (LNG) body on Wednesday launched a framework for rules to declare cargoes carbon neutral as it seeks to make the practice of offsetting emissions a last resort.
Environmental groups are skeptical about the use of carbon offsets and say the ability to pay for emission reductions elsewhere could prolong the use of fossil fuels.
Around 30 cargoes, or less than 1% of global LNG trades, have been declared carbon neutral to date, but the number is expected to grow as companies seek to differentiate themselves through their environmental credentials.
“There is a wide disparity in the nature of these (carbon neutral cargoes), which is why we created this framework,” Vincent Demoury, secretary general of the International Group of Liquefied Natural Gas Importers (GIIGNL) told Reuters.
The framework outlines a series of steps, with the first requiring companies to monitor and verify their greenhouse gas emissions intensity.
For a company to declare its shipment carbon neutral, it would need to show transparent emissions data, make the best efforts to reduce emissions at its operations and use offsets for any remaining emissions for the cargo’s lifecycle, including scope 3 emissions, or those generated when the customer uses the fuel.
Not all of the 30 shipments that have claimed to be carbon neutral to date include scope 3 emissions and therefore would not have been able to make that claim under the GIIGNL framework, Demoury said.
He said the aim was to encourage emission cuts primarily at a company’s own operations.
“Offsetting the residual emissions is better than nothing but this shouldn’t be seen as the primary objective of the industry,” he said.
The framework did not specify which type of offset, which can cost as little as 50 cents, should be used, but said they should meet criteria, such as being independently verified and retired from circulation once they have been use
A rare and massive gold nugget, weighing around 20lbs (9kg), has been put up for sale 23 years after it was discovered and it’s expected to reach at least $1 million at an auction that takes place on Dec. 8.
The Alaska Centennial Nugget, estimated at the size of a baby’s head, was discovered by gold miner Barry Clay near the town of Ruby, Alaska, in 1998, 100 years after the 1896 Klondike Gold Rush.Top of Form
He found the valuable remnant while pushing dirt with his bulldozer along the shores of the Swift Creek Mine.
The nugget is the largest ever found in Alaska, and only smaller than the “Boot of Cortez” nugget found in Mexico, which weighs 24lbs (11kg).
Clay is said to have buried the nugget near a tree, buying time until he decided what to do with his remarkable find.
The current owner bought the rock directly from Clay, and it has been in the same family for more than two decades.
The upcoming auction will be the first public offering of the museum-quality piece.
The fact that the Alaska Centennial gold nugget exists at all makes it all the more exceptional, Craig Kissick, Director of Nature and Science at Heritage Auctions said in a video.
“Fewer than 50 gold nuggets over 250 ounces exist as gold in nugget form… (it’s) inherently rare; gold nuggets of massive size, even more so,” he says.
Some of Alaska’s richest placers worked in the area around the town of Ruby from 1910 to 1920. There are only a handful of commercial mining operations there today.
POLITICS:
Interior deputy details plan to curb oil and gas development Heather Richards, E & E News, November 17, 2021
The Interior Department’s second in command this week pledged the Biden administration is orchestrating a paradigm shift for the federal oil program, explaining in unusually candid detail possible components of the strategy to restrain fossil fuel development on public lands.
“We are here to fundamentally reform the Interior Department’s oil and gas program,” Deputy Secretary Tommy Beaudreau said during an interview with the Energy Policy Institute at the University of Chicago.
Beaudreau said the federal oil and gas program was designed in a “bygone” era where the chief priority was clear: “Get it out of the ground to enhance domestic sources of energy supply.”
Now, the risks of climate change demand a fundamental shift in global energy use, and in that national program, he said. But it’s a complicated process because those laws were written to favor extraction of fossil fuels, he added.
Beaudreau noted several specific policy changes that are being considered and spoke favorably of raising royalty rates, as well as launching new rules around valuation of fossil fuels to limit how royalties are whittled down through exclusions and write-offs.
He also made a case for more cautious leasing, adopting policies that don’t prioritize first dibs for oil and gas operators on public lands that may have other values (E&E News PM, Oct. 29).
The Biden administration has come under fire from the left for not being more aggressive in ending the federal oil and gas program, even as lawmakers on the political right and industry have lambasted Interior as anti-oil (Energywire, Nov. 4).
The rancor began in January when the White House froze new oil and gas leasing and began a comprehensive review of how the federal government manages its vast stores of crude oil and natural gas.
But it’s been strong-armed into restarting oil and gas leasing through a temporary injunction by a Louisiana federal judge considering a lawsuit against the administration. Meanwhile, Biden officials have resisted talking about their review findings and delayed the release of an interim report on potential reforms for the program.
The first sale of the Biden administration is taking place in the Gulf of Mexico later today, despite protests from environmental groups.
Beaudreau said selling oil and gas drilling rights in the Gulf right now isn’t what the administration would have wanted. But he said the sale underscored that to make lasting change in the federal oil program, the administration will have to take some losses along the way.
“We have to deal with the litigation and we have to deal with the terms that we inherited from the previous administration on that lease sale,” he said.
An alumnus of the Obama administration who served as the Bureau of Ocean Energy Management’s first director, Beaudreau also said he is focused on making reforms “durable.”
Beaudreau led BOEM following the Deepwater Horizon oil explosion that killed 11 men in the Gulf of Mexico and which prompted a series of offshore safety reforms by the Obama administration. Some of those were undone by the Trump administration.
“I was heavily invested in those reforms. I watched what happened during the Trump administration as they were rolled back,” he said. “A huge part of my thinking, as well as the department’s, is how do we fundamentally change these programs in a way that is lasting and durable.”
He said the way to do that is to follow the process, to create a new administrative record, that makes the case for new policies in the climate era.
“I know that can be hard. I wish it was less procedural than it is. But I believe that going through that process is the best way to, at the end of the day, make sure the changes last and get us on a path to decarbonizing public lands.”
Here are two numbers that say a lot about how investors view two key electric vehicle startups: $232,000 and $89 billion.
Driving the news: That’s luxury EV startup Lucid Motors Q3 revenue and its market capitalization at yesterday’s close of trading.
Lucid, which just began deliveries, has zoomed past Ford’s market cap and matched General Motors.
Meanwhile, EV startup Rivian, which just went public last week, has a stunning market cap of roughly $150 billion after yesterday’s latest gains.
Why it matters: The eye-popping valuations signal how investors see the potential for huge EV market growth, and how those two startups may be well-poised.
Lucid’s team includes several Tesla veterans, and its Lucid Air just won Motor Trend’s car of the year.
The Amazon- and Ford-backed Rivian, which just recently began deliveries of its pickup, also has a foothold in the growing market for electric delivery vehicles thanks to its large contract with Amazon.
Yes, but: “Unfortunately, a company like Tesla doesn’t come along very often and the valuations placed on Rivian and Lucid are questionable, particularly in comparison to the existing automotive companies,” Edmunds analyst Jessica Caldwell tells the Financial Times.
Electric vehicles will play a pivotal role in US efforts to reduce emissions and meet climate commitments under the Paris agreement. For the United States to deliver on the “decade of ambition” President Biden declared at COP26 in Glasgow, it must tackle the 30 percent of its greenhouse gas emissions originating from transportation. To that end, the administration’s pledge to bring electric vehicle sales to 50 percent of the consumer car market is central to its plans to deploy clean energy infrastructure under the Infrastructure Investment and Jobs Act. The administration’s goals of dramatically increased transportation electrification will shape US demand for key minerals and metals.
In the Atlantic Council’s new report: The Role of Minerals In Realizing US Transportation Electrification Goals, author Reed Blakemore examines projected EV growth in the United States, and the commensurate demand for minerals. Blakemore discusses the trajectory of mineral demand growth resulting from an acceleration of EV deployment in the United States, the steps that policymakers and the industry are taking to ensure those minerals demands are met, and where gaps still exist as the United States pursues its electrification goals.
SCOOP: Israel, Jordan and the United Arab Emirates are set to sign a deal on Monday, pushed along by U.S. climate envoy John Kerry, to build a massive solar farm in the Jordanian desert, five Israeli officials tell Axios. https://t.co/JoYVC3zajY
