Today’s Key Takeaways: Oil tycoon plays in Alaska U.S. Senate race. 9 new gas pipelines in Q1, 2022 – lowest number since 2016. Doyon increases investment in Tectonic Metals. Windfall tax on oil and gas in UK includes incentives to drill more.
About a decade ago, a friend asked how high I thought gasoline prices might rise. I said “One day you will pay $10 a gallon for gasoline.” He replied that he would refuse to pay that much, and I asked what he would do if the price rose to $10 a gallon tomorrow. He finally conceded that he would, in fact, pay $10 a gallon for gasoline.
Then oil prices plummeted in 2014, and again in 2020. I am sure my prediction looked pretty stupid to him when gasoline fell under $2.00 a gallon.
Why did I make such a prediction? Because I had already seen gasoline prices approach that level when I was living in the Netherlands in 2008, and the roads were still packed with cars. Energy demand just isn’t that elastic in the short term, so people pay what they have to pay to get to work.
Here is how I saw things playing out. I imagined that energy demand would continue to grow, but supply would have a hard time keeping up. At times, there would be supply/demand imbalances that would spike prices higher and higher.
However, over the past decade supply has managed to keep pace most of the time. At times, the market was oversupplied, and prices crashed. There have also been periods of spiking prices, but then demand growth would slow down and supplies would catch up.
At the same time, alternatives like electric vehicles, and to some extent biofuels have helped mitigate oil demand growth. But it wasn’t enough. Oil demand kept growing (until the Covid-19 pandemic hit), albeit a bit slower than if there had been no alternatives.
The risk I always saw was that if policy makers believed alternatives would scale fast enough to replace oil demand growth — and they passed policies unfriendly to our domestic oil companies — they could be setting up a very nasty price shock in the future.
This is why I was so adamant that cancelling the Keystone XL Pipeline was the wrong decision. It’s not because I love fossil fuels, it’s because I recognize the risk of needing supplies and not having them. We have seen that it doesn’t take much of a shortfall in oil supply to have a disproportionate impact on the price.
Hence, what we are seeing right now is one of the possible consequences of the energy transition. When alternatives don’t scale up fast enough to fill the gap between oil supply and demand, oil prices skyrocket.
I know that many people who have opposed any additional fossil fuel development saw a different scenario unfolding. They believed that alternatives would scale up fast enough, and that we wouldn’t need the oil.
Here’s the thing, though. If we invest in fossil fuel development — and we don’t need the oil and gas because alternatives do scale up rapidly — that’s a loss the fossil fuel companies would take. That is the risk they are taking, for the potential reward that demand will be there in the future.
What’s the downside of continuing to support our domestic oil industry? That it will simply continue our addiction to fossil fuels?
That’s where we have to also make sure we are doing as much as possible to encourage alternatives. Today’s fossil fuel investments would be ready to supply the market if needed, but alternatives will be trying hard to make sure they aren’t needed.
Rishi Sunak’s windfall tax on oil and gas includes a big incentive to drill more.
Just how the UK government finds itself mounting a tax raid on the oil and gas industry, while simultaneously breaking a promise not to offer fossil fuel producers incentives to drill more, shows how the invasion of Ukraine has turned the world of energy on its head.
A government that publicly shunned the oil industry when it hosted the COP26 climate conference in December has spent the last few months encouraging it to investment more. Today, the cost-of-living crisis forced another sharp turn in policy.
The UK Chancellor of the Exchequer announced 25% windfall tax on profits of oil and gas producers, earning the government an expected £5 billion ($6.3 billion) that will be used to help the poor deal with soaring energy costs.
Companies will be able to avoid some of this levy by making fresh investments in oil and gas extraction — offsetting as much as 80% of new spending. That runs against the COP26 agreement, which pledged to phase-out of inefficient fossil fuel subsidies.
“Giving these firms even bigger tax breaks to extract more oil and gas will lock in greater dependence on fossil fuels,” said Luke Murphy, associate director for energy and climate at the Institute for Public Policy Research, a left-leaning think tank. “This is bad for future energy bills, our energy security, and our environment.”
GAS:
Energy Matters, Volume 8, Series 12, May 31, 2022
In Q1 2022, 9 new natural gas pipeline projects received FERC approval or were completed, which will provide 0.43 Bcf/d of pipeline capacity. This was the lowest quarterly addition since 2016. (Insert below: a map of the recently approved or completed LNG pipelines.)
Doyon Ltd., the Alaska Native Claims Settlement Act regional corporation for Interior Alaska, is strengthening its partnership with Tectonic Metals Inc. with another investment into the equity of the company exploring for gold on Doyon and state lands in Alaska.
“Working on Native Owned Land is one thing, but being funded by Alaska Natives to explore on their land is something completely different,” said Tectonic Metals President and CEO Tony Reda. “It is truly an honour, a privilege and a vote of confidence by our single largest shareholder, Doyon, one of Alaska’s leading Native Regional Corporations, to entrust us with their capital to explore on their traditional territory and work alongside them,”
The Doyon region blankets a mineral-rich swath of Alaska’s Interior that is nearly the size of Texas. The Alaska Native corporation owns 12.5 million acres of land within this vast region, making it the largest private landholder in Alaska and one of the largest in North America.
Following the passage of ANCSA in 1971, ANCSA selected much of these lands for their mineral potential, including the Seventymile, Carrie Creek, and Flat gold properties being explored by Tectonic.
Doyon and Tectonic first began forging a partnership in 2018, when the new mineral exploration company and Interior Alaska ANCSA corporation signed discovery-to-production agreements for Doyon properties.
Currently, Tectonic is exploring several Doyon properties – Seventymile, Carrie Creek, Maple Leaf, Mount Harper, and Flat – and the Tibbs gold project on state lands in the Goodpaster Mining District where Carrie Creek, Maple Leaf, and Mount Harper are located.
In addition to the land agreements, Doyon has already invested in two Tectonic financings and currently holds a 15% equity interest in the explorer – a stake that will increase with its participation in Tectonic’s current non-brokered private placement.
“2022 marks the 50th anniversary of the Alaska Native Claims Settlement Act and the formation of Doyon, Ltd. Since that day, our mission has been clear: continually enhance our position as a financially strong Native corporation in order to promote the economic and social well-being of our shareholders and future shareholders, to strengthen our Native way of life, and to protect and enhance our land and resources. Our investment in Tectonic is our mission in action,” said Doyon President and CEO Aaron Schutt.
Originally announced in April, Tectonic is raising C$3 million through a non-brokered private placement led by Crescat Capital LLC, in association with renowned geologist Quinton Hennigh.
“Tectonic has assembled an enviable portfolio of high-quality gold projects in Alaska, all ready for drilling,” said Hennigh, the geological and technical adviser at Crescat. “They have a very strong technical team able to execute on multiple exploration campaigns, and importantly, they have a drill available for the 2022 season.”
Under the financing, Tectonic plans to issue up to 50 million units at C6 cents each. Each unit consists of one share and half a warrant, with each whole warrant exercisable into an additional share for C10 cents for two years, subject to early expiry conditions.
While the exact amount of units being purchased by Doyon has not been disclosed, the investment is expected to be significant and will increase the ANCSA corporation’s already substantial Tectonic share ownership.
“As Tectonic Metals’ single largest shareholder since 2020, Doyon recognizes that the company shares our core values – values that today are embraced as ‘ESG’ principles but which our people have adhered to for thousands of years,” said Schutt. “We welcome the opportunity to reinforce our support for Tectonic and are confident that their professional, diligent, and respectful exploration process will prove successful.”
With the funds raised during the current financing, Tectonic plans to carry out drilling at its Tibbs gold project about 22 miles (35 kilometers) southeast of Northern Star Resources Ltd.’s Pogo Mine in the Goodpaster Mining District; and Seventymile, a roughly 150,000-acre land package between Yukon’s Klondike and Alaska’s Circle Mining District.
The drilling at Tibbs will focus on Michigan, a zone where previous drilling has encountered high-grade gold, including 28.95 meters averaging 6.03 grams per metric ton gold; one meter of 104.5 g/t gold; 6.12 meters of 7.69 g/t gold; and 1.52 meters of 57.1 g/t gold.
Oriented drilling carried out last year identified an interpreted steep structure that controls high-grade mineralization at Michigan. Testing this structure will be one of the primary targets for the 2022 drill program at Tibbs.
At Seventymile, drilling will step out from high-grade gold mineralization, such as the 1.1 meters of 205.89 g/t gold previously drilled in tension veins at Flanders and 1.07 meters of 29.3 g/t gold in shear veins at Flume.
In addition to drilling, the company plans to carry out metallurgical work and surface exploration at Flat, an exciting gold property leased from Doyon in September.
Located in the Kuskokwim Mineral Belt about 25 miles (40 kilometers) north of the 39-million-ounce Donlin Gold project, Flat hosts intrusive-hosted, sheeted quartz vein gold mineralization above two creeks – Flat and Otter – that are estimated to have produced more than 830,000 oz of placer gold since 1908. When you add in other streams draining Chicken Mountain on the property, this total is more than 1.3 million oz of alluvial gold.
There have been 6,907 meters of historical drilling in 55 holes at Chicken Mountain, the primary exploration target at Flat. This drilling has cut long sections of 0.5 to 1 g/t gold mineralization, with shorter sections of high-grade gold. The historical drilling, along with soil and rock sampling, has outlined a roughly 4,000-meter-long mineralized zone with gold to the 200-meter depth of the previous drilling.
The metallurgical work at Flat is being carried out to confirm previous testing that shows the gold is not refractory and to test for the potential for heap leach extraction of the mineralization.
“Flat also has the potential for free-milling gold, implying a simpler, less energy-intensive extraction process upon mining,” said Reda. “This, in combination with historically mined placer gold deposits in creeks draining the property, points to an opportunity with a low-cost path forward.”
POLITICS:
Oil tycoon Harold Hamm backs Murkowski challenger E & E Daily, Timothy Cama, May 27, 2022
The chair of Continental Resources Inc. released a statement supporting Kelly Tshibaka, a Trump-backed candidate who he said will “fight for American energy independence.”
Oil and natural gas mogul Harold Hamm is backing one of Sen. Lisa Murkowski’s main opponents in the Alaska primary.
Hamm said yesterday that Kelly Tshibaka, the former commissioner of the Alaska Department of Administration, will stand up for the state’s energy industry. Tshibaka has billed herself as a conservative to the right of Murkowski, a Republican who is the former chair of the Senate Energy and Natural Resources Committee.
“Kelly understands that American-made energy is the driving force of our economy, creating thousands of jobs in Alaska, and is essential to our national security,” Hamm, the chair of Continental Resources Inc., said in a statement via Tshibaka’s campaign.
“As U.S. Senator, Kelly will stand up for the people of Alaska and fight for American energy independence,” he said. “Kelly Tshibaka knows what’s good for Alaska is good for the rest of the country.”
Hamm did not mention Murkowski in his statement.
Tshibaka is former President Donald Trump’s pick to challenge Murkowski in this year’s elections (E&E Daily, June 21, 2021). Trump pledged to work to unseat Murkowski due to a number of perceived slights against him, like her vote to convict him in his second impeachment trial and her opposition to the nomination of Brett Kavanaugh to the Supreme Court.
Tshibaka is at least Hamm’s third endorsement of the 2022 campaign cycle. He’s also backed Mehmet Oz in the Pennsylvania Senate race and Markwayne Mullin in Oklahoma’s Senate race.
Under Alaska’s new election system, all candidates for the Senate seat will participate in a nonpartisan primary on Aug. 16. The top four finishers will advance to a ranked-choice general election.
While Russia and China are beefing up their Arctic presence, the Pentagon has been slow to make the Arctic a priority.
Check out this interesting clip, from the Alaska Public Media archives. https://t.co/dUQ29ZWOX1
— Alaska Public Media (@alaskapublic) May 31, 2022
Environment, Social, and Governance or ESG has become a buzz-phrase when it comes to investment in resource development among other things. This framework can be applied to most businesses. And while the index for measuring each of these factors is not concrete, millennial investors in particular have been paying close attention to these factors before making investment decisions.
The June 1 candidate filing deadline is just six days away. Two big names filed to run for open Anchorage Senate seats today. #akleghttps://t.co/H6H8q1buqb
— The Alaska Landmine (@alaskalandmine) May 26, 2022
The state-owned Alaska Industrial Development and Export Authority has requested permission from the federal government to build a 100-mile road into the mountainous western Matanuska-Susitna Borough.
On Tuesday, AIDEA officials said by email that they had filed a permit request under Section 404 of the Clean Water Act with the U.S. Army Corps of Engineers. That permit would allow the work needed to cross the Susitna, Skwentna and other rivers and wetlands along the road, which is formally known as the West Susitna Access Project.
“Today marks the beginning of the process to evaluate an access route to unlock opportunities in the fastest-growing region of the state,” said AIDEA executive director Alan Weitzner in a prepared statement. “We know the area is home to tremendous economic potential and offers recreational opportunities for residents of the Mat-Su Borough and all Alaskans.”
In AIDEA’s prepared statement, Gov. Mike Dunleavy said he supports the road.
Beyond access to mines and the creation of jobs, he said the road is valuable because “it would also mean new recreational opportunities for Alaskans and thousands of additional acres of land available for agriculture to help our state be more food secure. The feasibility analysis AIDEA is about to undertake will provide the state and stakeholders with the information needed to make informed decisions about whether or not to proceed with the proposed road project.”
As currently planned, the road would reach from a point southwest of Big Lake to an airstrip in the Yentna Mining District.
Several mining companies are exploring mineral prospects in the area, and the gas pipeline envisioned as part of the massive Donlin Gold mine would also pass near the end of the road.
The road is supported by the Mat-Su Borough government, which has partially funded predevelopment work. The Alaska Legislature authorized $8.5 million for project permitting last year.
According to preliminary estimates, the road would cost $300 million to $400 million to complete. It isn’t clear how project developers will find that funding.
In some AIDEA-backed projects, the state-funded organization has collected tolls. In others, the state treasury has footed all or part of the bill.
A group calling itself Defend the West Su is opposing the project. Backed by the environmental and fishing organization SalmonState, it includes area residents, hunting and fishing lodges, and other fishing companies that fear road construction in the area.
“The proposed West-Su Access Road threatens the Mat-Su region’s existing economy — while providing no benefit to the state,” said Steve Perrins, owner of Rainy Pass Lodge, in a prepared statement. “As an Alaskan, it’s incredibly upsetting that AIDEA is throwing away state money on a project that will damage our economy, kill many Mat-Su tourism-generating lodge businesses, and destroy my business — the oldest hunting and recreation lodge in Alaska.”
Oil’s bull run is taking little notice of the strong U.S. dollar, breaking crude’s historical inverse link to the greenback and giving analysts confidence it has further to go based on current market fundamentals.
A strong dollar typically weighs on oil prices because it makes the commodity more expensive for holders of other currencies, potentially hurting demand for crude.
This time the dollar is being boosted by its safe-haven appeal as clouds gather over the economic outlook while oil is being driven higher by disruptions to Russian supplies linked to the conflict in Ukraine and strong demand, analysts say.
The dollar and oil have been moving in the same direction since late March, when the positive correlation hit its highest since May 2019, and analysts expect the link to persist given the tight oil market and broader risks to the global economy.
The usual inverse correlation between oil and the dollar had held fast for most of 2020 and into early 2021 as demand for crude was undermined by the global pandemic.
“Considering that spare capacity is low, there are likely larger supply disruptions ahead of us, and that oil demand will likely keep increasing, I would expect that oil will primarily be driven by its own fundamentals,” UBS analyst Giovanni Staunovo said.
Brent crude hit a 14-year high above $130 a barrel in early March due to a tight supply outlook and expectations of significant disruptions to Russian oil output after Moscow sent troops into Ukraine on Feb. 24.
Oil is currently trading around $115 a barrel as demand concerns from COVID-19 related lockdowns in the world’s top oil importer China and fears of a global economic slowdown tempered concerns about supply.
The Alaska Division of Oil and Gas received bids on two tracts covering 5,120 acres and totaling approximately $100,659 in bonus bids from one bidder, according to preliminary results from the 2022 Cook Inlet Areawide oil and gas lease sale. The sole bidder was Furie Operating Alaska, LLC, a subsidiary of HEX, LLC, which operates the Kitchen Lights Unit offshore in Cook Inlet. The tracts Furie won are adjacent to that unit, which currently produces natural gas for local utilities.
John Hendrix, President, and CEO of the HEX Cook Inlet says that the information of winning the tracts was news to him, but he says:
“Well, I know we applied for it. We’re trying to be good, responsible resource development representatives in the state of Alaska and it’s good that we won it. We hope to basically be able to develop it in the future, but we must have a fiscal regime and a state that wants us to develop our Alaska resources, and a federal government to boot.”
The Kitchen Lights unit is one of the newest gas fields in Cook Inlet, going online in 2015. It has produced more than 30 billion cubic feet of gas. HEX purchased Furie and the Kitchen Lights development in July 2020 and has actively worked to improve production.
Despite the news of winning the tracts, Hendrix adds:
“The federal government has an environment no one would want to invest in right now. We bought into state leases, but we have our own challenges right now with the state of Alaska. We are basically overtaxed. We have to pay almost 30% of our gross receipts to the state of Alaska for royalties and for those they awarded royalties to and for property taxes. Right off the top, 30%. No fishermen gives up 30%. No miner gives up 30%, but we give up 30% as Alaska’s only oil and gas company that’s owned by Alaskans 100%. We’re here as a company on the Kenai. We want to do the Kenai proud and our state proud, but we’ve been blessed with a state that had big companies come in and we’ve got bureaucracy formed around big companies and we need to adjust and change to survive the years ahead, not only our company but the state.”
The Division of Oil and Gas did not receive bids in the 2022 Alaska Peninsula Areawide lease sale, which was held concurrently with the Cook Inlet Areawide sale.
Preliminary results from the sale, which was conducted online, are posted at dog.dnr.alaska.gov. More details will be posted as they become available.
n a polarizing announcement, the Environmental Protection Agency released a revised Proposed Determination under Clean Water Act Section 404(c) to prohibit and restrict the use of certain waters in the Bristol Bay watershed. If finalized, the decision would lock out any future for a Pebble mine, and the enormous quantities of copper and other resources it could provide for the global transition to renewable energy.
“This is clearly a giant step backwards for the Biden Administration’s climate change goals,” Pebble Limited Partnership CEO John Shively told North of 60 Mining News. “I find it ironic that the President is using the Defense Production Act to get more renewable energy minerals such as copper into production while others in the Administration seek political ways to stop domestic mining projects such as ours. As we are still actively working through the established permitting process via our appeal of the Army Corps of Engineers permit denial, we oppose any action that is outside of that process.”
“This preemptive effort is clearly a political maneuver to attempt to block our ability to work through that established process,” continued Shively. “Further, the Army Corps of Engineers published an Environmental Impact Statement for Pebble in 2020 with input from many agencies including the EPA that states that the project can be done without harm to the region’s fisheries.”
“The EIS further notes the tremendous economic opportunity the project represents for the communities around Illiamna Lake where year-round jobs are scarce, and the cost of living is very high,” added the Partnership CEO. “We still need an opportunity to review the specific details that will be in the preemptive veto action. It is also worth noting that there are several internal steps that the EPA must follow before anything is final including a public comment period and a decision by the Assistant Administrator.”
Many of the groups opposed to developing a mine at Pebble came out praising the EPAs decision – although the actual Proposed Determination has not been published until May 26, a “pre-publication” Federal Register Notice for Proposed Determination can be read at https://www.epa.gov/bristolbay/2022-proposed-determination-pebble-deposit-area – with Alaskan anglers, hunters, local businesses, indigene and Native tribe representatives, as well the extensive fishing industry in Southwest Alaska rallying behind the announcement.
“Bristol Bay Native Corporation welcomes EPA’s announcement today,” said BBNC President and CEO Jason Metrokin. “This proposal is good news for Bristol Bay, and it could not come at a more opportune time, as millions of sockeye salmon return to their home waters and the people of the region ready their nets once again engage in annual subsistence and commercial fishing activities.”
One of, if not the largest, reason for such opposition toward Pebble is the perceived potential that waste from mining the large copper-gold-molybdenum-silver-rhenium deposit could harm the world-class Bristol Bay fishery.
EPA’s Proposed Determination would prohibit and restrict discharges of dredged or fill material associated with mining the Pebble deposit into waters of the United States within the mine site footprint located in the South Fork Koktuli River, North Fork Koktuli River, and Upper Talarik Creek watersheds.
Bristol Bay’s salmon resources have significant nutritional, cultural, economic, and recreational value, both within and beyond the region with a total economic value, including subsistence uses, of the Bristol Bay watershed’s salmon resources being estimated at more than US$2.2 billion in 2019.
Furthermore, Bristol Bay commercial salmon fisheries generate the largest portion of this economic activity, resulting in 15,000 jobs and an economic impact of US$2 billion in 2019, with roughly US$990 million contributing to Alaska.
However, as an argument, a Pebble Mine project advanced to the final step of the permitting process would produce 320 million pounds of copper; 363,000 ounces of gold; 15 million pounds of molybdenum; 1.8 million oz of silver; and 12,000 kilograms of rhenium over the first 20 years of mining.
With these numbers, at a processing rate of 180,000 tons per day, the initial 20-year mine considered in the preliminary economic assessment is forecast to generate a post-tax internal rate of return of 15.8% and a net present value (7% discount) of US$2.3 billion.
At forecast long-term metals prices, these expansion scenarios generate an IRR of 18.9 to 22.7% and an NPV of US$6.7 to US$9.8 billion.
Under the expansion scenarios, this operation would pay US$22 billion to the state; US$4 billion to the borough; and US$19 billion to the federal government over roughly a century.
You can read a complete breakdown of the Pebble PEA at PEA reveals Pebble economics, benefits in the September 10, 2021, edition of North of 60 Mining News.
After careful consideration of the environmental concerns, the Army Corps of Engineers approved the FEIS for developing a mine at Pebble only to deny federal permits when it came time to issue a record of decision shortly after the 2020 U.S. presidential election.
“The EPA was intimately involved with the review process and the Army Corps of Engineers’ determination that the mine would not harm the salmon fishery,” said Power the Future Alaska State Director Rick Whitbeck. “The only ‘determination’ that the EPA has made is to agree to interject itself and further politicize a process that hasn’t yet played out. … Pebble – based on science – will never impact the Bristol Bay fishery, but will provide hundreds of jobs, along with millions of tons of domestic supplies needed for renewable energy products.”
Regardless if one is for or against Pebble, lawmakers are concerned with EPA’s intention to implement a predetermined Section 404(c) of the Clean Water Act decision. By law, the 404 section of the Clean Water Act is under the jurisdiction of the Army Corps of Engineers, with the EPA given the option to veto after a determination has been given by USACE.
Concerns arise from EPAs encroachment and overreach into Pebble due to the possible precedent set by EPA advancing final section 404 determination that could deter other companies from investing in U.S. projects for fear that EPA could subjectively issue a veto without a full evaluation of the proposal – a predetermination before all the information has been accumulated.
Nonetheless, a final environmental impact statement was issued showing that negligible harm would befall the Bristol Bay fisheries, and Northern Dynasty Minerals Ltd. – the company heading the advancement of the Pebble mine – stands firmly behind the data.
“The Pebble project remains an important domestic source for minerals necessary for the Biden Administration to reach its green energy goals and if it blocks Pebble it will have to seek minerals to meet its goals from foreign sources which simply do not have the same environmental standards as we do,” finished Shively.
Alaska Senate President Peter Micciche said Wednesday he will not seek re-election this year, citing a desire to spend more time with family.
His announcement comes after the Legislature last week ended its four-month regular session and a week before a candidate filing deadline.
The Soldotna Republican said he has spent nearly 11 of the last 16 months away from his four daughters and wife, “who need me at home. My family is my priority.” Last year was marked by drawn-out budget fights and four special sessions.
The Division of Elections shows that Micciche had previously filed to run for the seat. Leona Long with the Senate Majority press office said by email that he had filed “months ago and things have changed.”
The division currently shows three other candidates for the Senate seat, including Tuckerman Babcock, a former Republican state party chair.
Micciche was first elected to the Senate in 2012 and has been Senate president since last year. He led a Republican-majority caucus whose members had sharply different views on the annual dividend paid to residents from Alaska’s oil-wealth fund.
Senate Minority Leader Tom Begich last week called Micciche a friend. The two spoke to reporters together in Micciche’s office on May 19 about their impressions of the legislative session that had just ended.
Begich, an Anchorage Democrat, said working with Micciche had been a “joy and a delight.”
Utilities in Alaska's Railbelt announce $200 million transmission upgrade project, @YJRosen reports for the Alaska Beacon https://t.co/MMDwSxsRa4#akleg
— Alaska Beacon || bsky @alaskabeacon.com (@AlaskaBeacon) May 26, 2022
“The company is excited to identify the first lithium prospect in Alaska, with access to extensive historic drill core that will allow us to rapidly expedite exploration works at Coal Creek, and in a strategic location close to the major Parks Highway and the state-owned Alaska railroad,” said Discovery Alaska Director Jerko Zuvela.
Nearly all the 50 minerals critical to the United States can be found at mines, deposits, and prospects across Alaska. Intriguing lithium occurrences, however, have not been identified in America’s Last Frontier – until now.
Discovery Alaska Ltd. says it has identified lithium at the Coal Creek prospect on its Chulitna property about four miles west of the Parks Highway midway between Anchorage and Fairbanks, Alaska.
Discovery acquired the Chulitna property early last year through the staking of roughly 77 square miles of state mining claims covering the Partin Creek gold-silver-copper prospect and the Coal Creek tin-silver-zinc target.
By taking a closer look at core from drilling that has been carried out at Coal Creek since the 1980s, the Australia-based exploration company has found evidence that Coal Creek also has lithium.
Coal Creek was discovered by the late Charles Hawley in 1972 and explored by Houston Oil and Minerals in the 1980s.
After drilling 42 holes, Houston Oil estimated the Coal Creek deposit contained roughly 4.8 million metric tons averaging 0.27% tin.
While the resource does not meet the rigor of current reporting standards, sampling of core stored at the Alaska Geologic Materials Center in Anchorage and four holes drilled in 2006 confirms the tin-silver potential of this easily accessible property.
Highlights from the previous drilling include 9.4 meters averaging 0.41% tin, 18.21 grams per metric ton silver and 0.81% zinc; and 9.3 meters averaging 0.45% tin, 11.95 g/t silver, and 0.29% zinc.
Discovery has now found evidence of lithium mineralization in the Coal Creek core stored at Alaska GMC.
The company used a SciAps Z-901 LIBS (laser-induced breakdown spectroscopy) handheld analyzer – a scanner similar to the XRF (X-ray fluorescence) scanners commonly used in mineral exploration – to determine the rudimentary lithium content of 12 initial holes selected for scanning.
Discovery says this initial scan detected lithium across broad zones in all twelve holes.
“The company is excited to identify the first lithium prospect in Alaska, with access to extensive historic drill core that will allow us to rapidly expedite exploration works at Coal Creek, and in a strategic location close to the major Parks Highway and the state-owned Alaska railroad,” said Discovery Alaska Director Jerko Zuvela.
This discovery comes at a time when the demand for and price of lithium are at all-time highs due to the explosive growth of electric vehicles and the lithium-ion batteries that power them.
The price for a metric ton of battery-grade lithium has rocketed from about US$7,000 at the onset of 2021 to current prices of around US$60,000/t.
Benchmark Minerals Intelligence, a global authority on lithium battery supply chains, estimates that US$7 billion a year will be invested between now and 2028 if the mining sector is going to keep pace with EV-driven lithium demand by the end of the decade.
While little is yet known about Coal Creek’s potential to be an economically viable lithium project, Discovery says historical data and the preliminary scans indicate the previously unrecognized lithium mineralization could be widespread.
The scanner identified variable intervals of lithium throughout the intrusive units encountered at Coal Creek that correlate primarily with concentrated tourmaline and lithium-bearing greisen zones with stockwork veining, as well as within a lithium-bearing aplite porphyry unit.
A historical report for Coal Creek includes a cross-section highlighting the extent of greisen alteration within the target area, and near several of the scanned drill holes. Moderate to strong lithium readings continue to the bottom of several drill holes, indicating the potential for further lithium-bearing zones remaining open at depth.
These lithium-bearing zones are also prospective for tantalum, niobium, and other critical minerals.
“The company will accelerate works to test the remaining prospective drill core to determine potential scale of the lithium bearing zone,” said Zuvela. “We look forward to realising the lithium potential at our Coal Creek prospect and advancing works toward delineating a maiden JORC (Australian Joint Ore Reserves Committee) resource.”
Discovery has engaged its specialist Alaskan professional geological consulting services group to conduct and manage the Coal Creek works program. This firm is also carrying out this year’s program at the Partin Creek gold-silver target about six miles (10 kilometers) northwest of Coal Creek.
API Blog — Two new reports show significant reductions in flaring from US natural gas and oil production, reflecting American operators' commitment to decreasing emissions — even amid high-volume energy production: https://t.co/HiaULyTj0Xpic.twitter.com/Lm5AiG0Jk0
— American Petroleum Institute (@APIenergy) May 25, 2022
Today’s Key Takeaways: Biden calls energy crisis “incredible transition.” Exxon to face climate change lawsuit in MA. Ancient mine in WY used by humans to produce red ocher 13,000 years ago. HI boasts most solar per person. Vegas bets on liquid hydrogen.
There is now more solar power capacity in nine U.S. cities than there was in the entire country a decade ago, according to Environment America’s new Shining Cities report. It ranks U.S. cities in terms of both overall installed solar and per capita capacity.
The list is more geographically diverse than you might expect; though three of the cities are in California, the others are spread across the country. With 650 megawatts, Los Angeles has the most installed solar capacity, followed by San Diego and Las Vegas.
But the city with by far the most solar per person is Honolulu, Hawaii. As Canary’s Julian Spector has reported, Hawaii’s rooftop solar industry boomed early as an economic alternative to expensive fossil-fueled electricity. Now households in Honolulu can earn money for sharing their solar production with the grid.
Massachusetts’ high court on Tuesday rejected Exxon Mobil Corp’s bid to dismiss a lawsuit by the state’s attorney general accusing the oil company of misleading consumers and investors about climate change and the dangers of using fossil fuels.
The Massachusetts Supreme Judicial Court ruled that a state law that protects defendants from lawsuits seeking to intimidate them into silence did not bar Attorney General Maura Healey from pursuing what Exxon calls a politically motivated case.
GAS:
From the Washington Examiner, Daily on Energy:
AIR LIQUIDE OPENS NEVADA HYDROGEN PLANT: French industrial gas giant Air Liquide announced today it has inaugurated its new liquid hydrogen production facility near Las Vegas.
The facility will produce 30 metric tons of hydrogen per day and has enough capacity to produce hydrogen for over 40,000 fuel cell vehicles in California in compliance with the state’s Low Carbon Fuel Standard, according to the company. Its operations will also be powered by renewable energy.
According to the researchers behind the discovery, this makes the Powars II site at Sunrise in Platte County the oldest documented red ocher mine—and likely the oldest known mine of any sort—in all the Americas.
The excavations confirmed theories advanced by famed University of Wyoming archaeologist George Frison, which stem from research he began at the site in 1986.
“We have unequivocal evidence for use of this site by early Paleoindians as long as 12,840 years ago and continuing by early Americans for about 1,000 years,” Spencer Pelton, lead author of the paper that documents these findings, said in a media statement.
“It’s gratifying that we were finally able to confirm the significance of the Powars II site after decades of work by so many, including Dr. Frison, who learned of the site in the early 1980s and was involved in the research until his death.”
Red ocher, also known as hematite, fulfilled a wide range of functions in Paleoindian societies, including as a pigment in rituals. It has been found at ancient graves, caches, campsites and kill sites in the Great Plains, the Rocky Mountains and beyond. The Powars II site is the only red ocher quarry identified in the North American archaeological record north of southern Mexico—and one of only five such quarries identified in all of the Americas.
Among the artifacts previously discovered at the Powars II site are Clovis points—believed to be from the first inhabitants of North America—along with other projectile points, tools, and shell beads.
Ocher was likely exported
The 2017-2020 excavation led by Pelton—a 6- by 1-meter trench bisecting a previously undocumented quarry feature—yielded several thousand more Paleoindian artifacts, along with many well-preserved animal bones and antlers, the latter used to extract the red ocher in the quarry.
The projectile points come from numerous locations in the region, including from as far away as the Edwards Plateau in Texas. That makes it likely that the red ocher found at archaeological sites throughout the American midcontinent came from the Powars II quarry.
“Beyond its status as a quarry, the Powars II artifact assemblage is itself one of the densest and most diverse of any thus far discovered in the early Paleoindian record of the Americas,” Pelton said.
The researcher and his colleagues said the evidence discovered so far indicates the quarry was used in two primary periods. During the first, dating to as long as 12,840 years ago and lasting several hundred years, people not only quarried red ocher—using bones and antlers as tools—but also produced and repaired weapons, along with other activities. After a hiatus of a century or more, the site was occupied by humans who mined red ocher and deposited artifacts in piles in a quarry pit.
“Further excavation of the estimated 800-square-meter remainder of the site will certainly reveal complexity not captured by our sample,” the scientists said.
Biden: High gasoline prices are part of an incredible transition away from oil and gas.
The average gasoline price in the U.S. reached $4.596 per gallon at the start of this week.
Soaring diesel prices could send inflation even higher in the second half of 2022.
President Biden came under fire from fellow politicians this week after he called the record-high retail fuel prices in the U.S. part of “an incredible transition” away from oil and gas.
“Here’s the situation. And when it comes to the gas prices, we’re going through an incredible transition that is taking place that, God willing, when it’s over, we’ll be stronger, and the world will be stronger and less reliant on fossil fuels when this is over,” Biden said during a joint news conference with Japanese Prime Minister Fumio Kishida.
The President’s remarks come as the average gasoline price in the U.S. reached $4.596 per gallon at the start of this week, with diesel prices at $5.554 per gallon despite the planned massive release of crude oil from the strategic petroleum reserve and new plans for the release of diesel from federal reserves as well.
“And what I’ve been able to do to keep it from getting even worse — and it’s bad. The price of gas at the pump is something that I told you — you heard me say before — it would be a matter of great discussion at my kitchen table when I was a kid growing up. It’s affecting a lot of families,” Biden also said.
“But we have released over two hundred and, I think, fifty-seven thousand — million barrels of oil, I should say. Us and the rest of the world we convinced to get involved. It’s helped, but it’s not been enough,” the U.S. President added.
Although gasoline prices are putting pressure on households, some experts are more concerned about diesel prices, which help keep inflation higher by adding to the transportation costs of most goods shipped and sold across the U.S. In the East Coast, according to the WSJ, diesel fuel supplies are at the lowest since 1990 at least.
