U.S. retreats from pledge to end gas investments Sara Schonhardt, Climatewire, June 29, 2022
The energy crisis resulting from Russia’s war is testing Western leaders’ promises to phase out natural gas investments abroad.
Dozens of countries rallied around phasing out fossil fuel financing during global climate negotiations seven months ago. Yesterday, those efforts were weakened by the world’s most powerful economies.
The shift illustrates how the fear of losing access to energy imports — due to Russia’s war against Ukraine — is testing the commitment of countries that have been among the most vocal advocates of curbing climate change.
Leaders of the Group of Seven nations — the United States, United Kingdom, Canada, Germany, Italy, France, and Japan — agreed to support public investments in the natural gas sector “as a temporary response” to the abrupt shortfall in global gas supplies created by the pariah status of Russian fossil fuels.
The move announced yesterday at the end of the G-7 summit in Germany threatens to undermine commitments announced by the United States and more than 30 other countries at the climate talks in Glasgow, Scotland, to stop spending public money on international fossil fuel projects by the end of this year (Climatewire, Nov. 4, 2021).
A communiqué released by G-7 leaders sought to soften those concerns by saying its support for continuing gas investments would be “implemented in a manner consistent with our climate objectives and without creating lock-in effects.”
“On one hand there is a strong affirmation of the objectives of the Paris Agreement and of domestic [climate] ambitions, but those ambitions threaten to be undermined by continued support for gas investments,” said Luca Bergamaschi, executive director of ECCO, an Italian climate change think tank.
Gas projects can take years to construct, he added, a timeline that raises questions about the emissions impacts of building liquefied natural gas facilities or pipelines that can be used for decades to come.
That may not matter to G-7 leaders if the investments are directed outside their borders, since that would not defy their commitments to largely decarbonize their transport and power systems by 2030 and 2035, respectively.
“We’re in an unprecedented situation,” said Domien Vangenechten,a policy adviser at E3G in Brussels who pointed to rising coal use in some parts of Europe as leaders look to deprive Russia of fossil fuel revenue. “But at the same time, they haven’t watered down their longer-term [climate] trajectory.”
The G-7 leaders also reiterated a pledge collectively to reduce methane emissions — a powerful greenhouse gas associated with oil and natural gas operations — by 30 percent by 2030. But that pledge, made in Glasgow, is tied to emissions produced domestically, meaning German investments in a potential Senegal gas project wouldn’t affect Germany’s ability to reduce its methane pollution within its borders.
Climate advocates warn that watering down commitments to end gas financing smacks of hypocrisy and could make it harder for wealthy countries to tell poorer nations, particularly those where greater energy access is needed, to cut their reliance on polluting energy sources.
“The question is really who profits from this and what is the best investment for this country, looking at the future,” said Bergamaschi. “And are we investing as Europeans in gas in Africa for us, or for them? Or for who?”
The G-7 was more consistent on its message about the so-called just energy transition, which aims to provide funding for coal-heavy emerging economies to transition to clean energy. A statement from G-7 leaders and other countries that stand to benefit from those partnerships — including India, Indonesia, South Africa, and Senegal — refers to “phasing down coal while increasing the share of renewable energies in the energy mix.” It does not mention gas.
“This is very coherent with both the climate objectives of the developed countries and supporting developing countries also in their transition,” said Bergamaschi of ECCO.
‘Long-lasting legacy’?
Six of the G-7 countries, minus Japan, pledged to end international fossil fuel financing at last year’s climate talks. They all backed that position in a statement from their climate and energy ministers in May.
But rising energy prices and a major supply crunch have made energy security a greater priority than fixing the climate. That’s particularly true for Germany, which until recently depended on Russia for more than half of its gas supplies.
Its leaders have warned of economic upheaval if gas supplies fall too fast. Recent shortages led the country to raise its emergency gas plan to alarm stage and revive old coal plants.
But a report by ECCO found that Europe could cut its gas demand 40 percent by 2030 if the European Union passes legislation to cut emissions alongside a blocwide plan to wean itself off Russian energy.
The International Energy Agency in a report last year said no new oil and gas should be developed if the world hopes to prevent global temperatures from rising to levels where the impacts of increasingly severe storms, heat waves and flooding would be irreversible.
A separate report on Africa’s energy outlook notes that industrialization in Africa will depend in part on expanding natural gas use, but doing so wouldn’t greatly increase the continent’s share of global emissions. Climate advocates point out that investments in natural gas are often intended for export to wealthy nations.
Kaushal Ramesh, an analyst at Rystad Energy, said gas can advance climate objectives if it’s used to speed up coal phaseouts and prepare grids for increases in renewable energy.
“However, this needs to be done with proper emissions accounting and mitigation measures,” including around flaring and fugitive methane emissions, he said in an email.
Yesterday’s statement to allow for continued investments in fossil fuels departs from what rich nations committed to during the climate talks, said David Waskow, director of the international climate initiative at the World Resources Institute.
“The question is whether they mean it when they say no lock-ins,” he said. “Is this something that creates a long-lasting legacy for gas in Africa, for example, or is it something else? But it’s not clear how the something else would be achieved.”
An analysis by Climate Action Tracker published last month found that a rush to build natural gas infrastructure in response to soaring energy prices and Russia’s war in Ukraine would threaten global climate targets (Climatewire, June 8).
That could hurt efforts in the United States and other nations to decarbonize if it means extending their reliance on fossil fuels. It could also draw money away from investments in renewables or energy efficiency.
The pledge in Glasgow to end international fossil fuel investments would have freed up $15 billion a year for clean energy, according to a preliminary report.
"As policymakers around the world target carbon emissions more aggressively, the profile of gas demand is going to change." – Giles Farrer, Head of Gas & LNG Asset Research at #WoodMac
NEW BIDEN ADMINISTRATION REPORT VALIDATESADVANTAGES OF ALASKA LNG PROJECT
Center for LNG
Assessment Accelerates Momentum for Only Permitted West Coast LNG Project
A new report, published ahead of schedule by the Biden Administration, documents the significant benefits of the Alaska LNG Project.
The report, “Alaska LNG Project DraftSupplemental Environmental Impact Statement” (SEIS), published by the U.S. Department of Energy (DOE), examines the effects of Alaska LNG and its conclusions validate previous federal authorizations for the project. The new report also documents that ample quantities of North Slope natural gas exist to support Alaska LNG and identifies important socioeconomic benefits resulting from Alaska LNG.
Alaska Gasline Development Corporation President Frank Richards said, “With this report, the Biden Administration confirms that Alaska LNG can deliver environmental benefits globally and provide environmental and socioeconomic benefits for Alaskans. As the world turns away from Russian energy, LNG investors, developers, and customers are all searching for reliable, low-emissions energy sources. Alaska LNG, the only permitted LNG project on the West Coast, is poised to safely deliver to allies across the Pacific and enable other U.S. LNG projects to strengthen service to European nations in need.”
DOE notes two distinct environmental advantages Alaska LNG has over competing LNG projects. Alaska LNG’s shorter shipping routes to Asia produce fewer emissions. The “shortest distance between the Gulf Coast and China is 140% longer than the route from Alaska to China.” Alaska natural gas generates fewer emissions than gas produced elsewhere because it is produced alongside oil. Gas and oil produced independent of each other generate higher overall emissions. About 75% of North Slope gas is “associated gas” versus only about 40% of Gulf Coast gas.
The report notes the critical role natural gas will play in meeting global emissions reductions: “[N]atural gas is projected to continue to be a significant source of energy around the world, and for electricity generation, it is likely to be paired with carbon capture technology to help countries meet decarbonization goals…” and “[C]oal is currently the largest source of energy for many Asian countries, these countries are trying to move away from coal to be able to meet their climate goals.”
DOE confirms there is more than enough identified North Slope natural gas to support Alaska LNG over the project’s lifespan without requiring development of new fields. The report determined that 41.1 trillion cubic feet of natural gas is readily available on the North Slope, exceeding the volume required by Alaska LNG for in-state and export use. Enough natural gas is produced on Alaska’s North Slope each day to meet the daily energy needs of California, Oregon, and Washington. Today however this gas is reinjected into the ground because there is no present infrastructure to deliver it to market.
DOE reports that important socioeconomic benefits from Alaska LNG will occur, including increased employment opportunities, wage increases, and state and local government tax revenues generated from increased materials purchases, payroll expenditures, and property and other taxes.
The DOE draft SEIS findings, published on June 24, confirm the conclusions of the comprehensive 2020 Federal Energy Regulatory Commission Environmental Impact Statement. Together, the two reports span 6,000 pages and seven years of cooperation between all major federal agencies.
The Alaska Gasline Development Corporation (AGDC) is an independent, public corporation of the State of Alaska charged with maximizing the benefit of Alaska’s North Slope natural gas though the development of infrastructure to deliver gas to local and international markets. More information about the Alaska LNG Project can be found at Alaska-LNG.com. More information about AGDC is available at AGDC.us.
U.S. LNG exports play a critical role in helping Europe and our other allies meet rising energy demand amid international turmoil while furthering our shared goal for a lower-carbon future. pic.twitter.com/yTxsXaTU5Z
— American Petroleum Institute (@APIenergy) June 28, 2022
Today’s Key Takeaways: G7 moves to reverse pledge to stop financing fossil fuels projects. Lack of EIA data frustrates markets. 9th Circuit Court of Appeals allows land swap deal for copper mine to progress. DOE criticized for hiring oil industry public relations firm. European countries need to make every molecule of gas count as potential decreases in flows and maintenance of critical infrastructure heighten the supply shortage.
The Group of Seven is moving toward reversing a commitment to halt the financing of overseas fossil-fuel projects by year’s end, a proposal now viewed favorably by most members, according to people familiar with the matter.
G-7 leaders meeting in the Bavarian Alps are converging on a reference to the increased role of gas projects, a consequence of Russia’s invasion of Ukraine straining their energy supply.
French President Emmanuel Macron was among those who supported financing of new fossil-fuel projects during a meeting with the leaders of African nations on Monday, according to a person with knowledge of the talks.
“In the present situation we’ll have short-term needs that will require large investments in gas infrastructure in developing countries and elsewhere,” Italian Prime Minister Mario Draghi said Sunday.
The aim should be to convert such infrastructure to hydrogen, to reconcile “short term needs with long term climate needs,” Draghi added.
Germany Pushes for G-7 Reversal on Fossil Fuels in Climate Blow
An updated text of the leaders’ statement shared with Bloomberg News refers to “the important role that increased deliveries of liquefied natural gas (LNG) can play in mitigating potential supply disruptions of pipeline gas, especially to European markets.”
Leaders “acknowledge that publicly supported investment in the gas sector is necessary as a temporary response to the current energy crisis, if implemented in a manner consistent with our climate objectives and without creating lock-in effects,” the text says.
The draft wording in the summit communique, initially backed by host Germany, is gaining traction as Europe races to secure alternatives to Russian gas. The German government has warned that Russia’s moves to limit supply risk a Lehman-like collapse in the energy markets, and Italy has rushed to sign new energy deals with African countries.
A senior official at the French presidency told reporters that it was envisaged gas investments would be permitted in the short-to-medium term on an exceptional basis given the circumstances, while the overall climate objectives as laid out at the UN COP26 summit are maintained.
G-7 Shift
A shift away from the commitment to end funding fossil-fuel projects – firmed up as a recently as May despite the energy shock caused by the war – would still represent a setback to global efforts to fight climate change. Such a move would make it harder to rally the rest of the world around more stringent targets and to direct investments toward cleaner sources of energy.
In the May commitment, G-7 nations acknowledged for the first time that fossil-fuel subsidies were incompatible with the Paris Agreement but acknowledged that investment in the LNG sector was a necessary response to the current crisis “in a manner consistent with our climate objectives and without creating lock-in effects.”
In a separate G-7 declaration issued Monday and backed by partner nations including India, South Africa and Indonesia, leaders reaffirmed their commitments to keep the average temperature increase above pre-industrial levels to well below 2°C and resolved to pursue efforts to limit it to 1.5°C, the same levels agreed to in Paris, and again at COP26 in November.
The Energy Information Administration will not release any further data, the agency said in an update on the heavily anticipated inventory figures that were due to be released last Wednesday.
The data was not published last week after the EIA discovered “a voltage irregularity, which caused hardware failures on two of our main processing servers.”
This failure prevented the EIA from processing and releasing multiple reports last week—including its highly sought-after Weekly Petroleum Status Report, which publishes not only U.S. crude oil inventory data, but gasoline and diesel inventories, as well as refinery utilization figures. Also missing last week was weekly U.S. crude oil production figures.
The EIA did not provide a timeframe for when the data will be released, nor did they comment on whether their systems would be up and running to publish this week’s Petroleum Status Report.
Last week, the oil industry had to rely on inventory figures from the American Petroleum Institute, which surveys the same companies and uses the same form to collect the data. But because of the way in which this data is modeled, there are differences in the final output.
“We will continue to provide timely updates as we bring our systems back online and will share a schedule for our product releases as soon as possible,” the EIA said in its statement on its website.
Last Tuesday, the API reported a build in crude oil inventories of 5.607 million barrels and a build in gasoline inventories of 1.216 million barrels. Distillates saw a decrease of 1.656 million bpd.
The delay caused a flurry of angry Twitter responses following today’s update as the market tries to assess the state of the market as gasoline prices remain uncomfortably high for consumers and for the current administration in the run-up to midterm elections.
In the note, Pang stated that disruption over the past couple of weeks for the European gas market has dragged on, adding that the Nord Stream 1 facility continued to export about 60 million cubic meters per day of gas over the weekend of June 25 and 26.
“This has been a marked reduction from the levels of 150 million cubic meters per day before the Nord Stream 1 pipeline reportedly experienced compressor issues, forcing Russian state-controlled operator Gazprom to stop operations at one of the three compressor units, bringing down the effective pipeline capacity,” Pang said in the note.
“Impending annual maintenance for Nord Stream 1 from July 11 to 21 remains on the cards, which would reduce Russian gas supply – already down 40 percent – to zero for some time, with no guarantee of a start-up date,” Pang added in the note.
“Such a move would have significant implications for the European and global market and push prices even higher,” Pang continued.
The Rystad analyst noted that Europe can remain upbeat that Norwegian gas supplies continue to hold steady at 300 million cubic meters per day but warned that this may still not be sufficient as storage inventory levels rose by only 8.2 terawatt-hours in the previous week, “bringing the European gas storage level up to about 51.2 percent”.
“This is a far cry from the average of about 43 terawatt-hours of weekly storage injections for the past two months. An 80 percent storage level target by November would be out of sight if this injection rate continues,” Pang said in the note.
“Germany has, as a consequence, declared an ‘alarm phase’ second stage of its emergency gas plan, aimed at managing supplies and supporting its storage requirement of 90 percent by December. Phase 2 involves Germany restarting old coal-fired plants, as well as introducing incentives – such as a credit line of €15 billion ($15.86 billion) – that rely on market fundamentals to cushion the loss in gas supply,” Pang added.
“Austria and the Netherlands are setting out plans to rely more on coal-powered plants, while France and Italy are likely to follow suit in the coming days, aided by a slew of measures to manage gas consumption and storage,” Pang went on to say.
In a separate market note sent to Rigzone on June 23, Rystad’s senior vice president, Carlos Torres Diaz, highlighted that European power prices had jumped as a result of lower gas supplies and renewed concerns for the winter balance.
“Spot power prices have increased in tandem with European gas prices as supply disruptions are creating a tighter European balance,” Diaz said in the market note.
In a market note sent to Rigzone sent to Rigzone on June 22, Rystad analyst Zongqiang Luo outlined that Europe was looking to coal as Russia curbed gas supplies.
A US appeals court has ruled that the federal government may give thousands of acres in Arizona to Rio Tinto Plc for a copper mine, upholding a lower court’s ruling and rejecting a request from Native Americans who said the land has religious and cultural import.
The 2-1 ruling from the San Francisco-based 9th US Circuit Court of Appeals, issued late Friday night, essentially defers to a 2014 decision made by the US Congress and then-President Barack Obama to give the land to Rio for its Resolution Copper project as part of a complex land swap deal.
Apache Stronghold, a nonprofit group comprised of members of the San Carlos Apache tribe and others, said it would appeal to the US Supreme Court.
The Arizona dispute centers on the federally owned Oak Flat Campground, which some Apache consider home to deities and which sits atop a reserve of more than 40 billion pounds of copper. If a mine is built, it would create a crater 2 miles (3 km) wide and 1,000 feet (304 m) deep that would destroy that worship site.
Rio and minority partner BHP Group Plc have already spent more than $1 billion on the project without producing any copper.
While two judges said they were sensitive to Apaches’ religious concerns, they stressed their ruling was narrowly tailored to the question about whether the government can do what it wants with its own land and whether the land transfer would prevent Apaches from practicing their religion.
“As we reach this conclusion, we do not rejoice. Rather, we recognize the deep ties that the Apache have to Oak Flat,” the court said it its 58-page ruling. “This dispute must be resolved as are most others in our pluralistic nation: through the political process.”
The dissenting judge said it was “absurd” and “illogical” to think the land swap would not impede Apaches’ religious rights.
A bill under consideration in the US Congress would undo the 2014 land swap, though its fate is unclear. President Joe Biden took steps to pause the land swap last year, though he has few options to delay it indefinitely.
“All the evidence suggests that the land exchange was meant to facilitate mineral exploration activities – nothing more and nothing less,” the court said in the ruling. The proposed mine project comes as demand jumps for copper to make electric vehicles (EVs) and other electronic devices.
Wendsler Nosie, one of the leaders of Apache Stronghold, denounced the decision. “My children, grandchildren, and the generations after them deserve to practice our traditions at Oak Flat,” he said.
Rio, which is based in Australia and Britain, said it would continue to talk with Apaches and others opposed to the mine. “There is significant local support for the project, however, we respect the views of groups who oppose it and will continue our efforts to understand, address and mitigate these concerns,” said Rio spokesperson Simon Letendre.
Mila Besich, the Democratic mayor of Superior, the town closest to the campground, and a supporter of the mine, said she was relieved by the ruling. “The 9th Circuit ruling provides further confirmation that the permitting must continue,” Besich said.
Representatives for BHP were not immediately available to comment. Terry Rambler, chairman of the San Carlos Apache tribe, was not immediately available to comment.
POLITICS:
DOE keeps hiring oil industry public relations firm Kelsey Brugger, Climatewire, June 27, 2022
“Edelman is really leading the charge on protecting old energy at the same time they are promoting new energy,” according to one critic.
The Department of Energy retained a global public relations firm with longstanding fossil fuel ties, continuing a practice that ramped up during the Trump administration.
The global firm Edelman in April signed a $500,000 contract to promote the new Office of Clean Energy Demonstrations, which the administration established with infrastructure law funding and billed as “a turbocharger of our net-zero future.”
The Edelman deal has drawn scrutiny from critics who have long been skeptical of the prominent firm. DOE has paid the PR firm more than $14 million since 2018, according to USAspending.gov, a public database.
Edelman, meanwhile, has long trumpeted its commitment to climate action.
“Edelman works with a broad range of clients in many industries and global markets, including clients across the energy sector,” said a company spokesperson in 2015. “As previously reported, we do not accept client assignments that aim to deny climate change.”
Such statements have made the firm a target of watchdogs and activists, who don’t hesitate to point out when they see Edelman being hypocritical. Working for the trade group American Fuel & Petrochemical Manufacturers was one of the company’s recent infractions in the view of critics.
“Edelman is really leading the charge on protecting old energy at the same time they are promoting new energy,” said Duncan Meisel, director at Clean Creatives, a group that has petitioned public relations firms and ad agencies to cut ties with oil companies and their trade groups.
USA spending shows Edelman will promote the DOE office’s accomplishments to the media, Congress and “the American public.”
The firm will help plan events, design graphics, write copy, develop web content, and help with rapid response during times of heightened need, according to a DOE official, who said the tasks would be supervised and require approval.
The new clean energy demonstrations office will help encourage clean hydrogen, carbon capture, grid-scale energy storage, small modular reactors, and other emerging technologies.
Its launch has been slow-going. The office has to hire numerous employees and lacks a Senate-confirmed administrator.
The recent Edelman contract was completed under an existing deal between the firm and DOE, which accelerated the process.
David Mayorga, DOE’s public affairs director, said the department conducts “a transparent, fair, and competitive procurement process when seeking external support services that deliver the best product and value for the American taxpayer.”
“We will do the same when seeking new communications support in the future,” he wrote in an email.
Edelman review
In 2015, Edelman said it was parting ways with a proposed coal export terminal project (Greenwire, July 24, 2015).
Earlier this year, Edelman, still under fire, said it had reviewed hundreds of clients, including a closer look at 20 “emissions-intensive” companies. It said the analysis led the company to at least rethink its relationship with some interests.
“We found examples where Edelman has played a key role in helping organizations acknowledge the significance of climate change and start their journey towards action. This is the type of work we want to do, we should do, and will do more of in the future,” said a post summarizing comments from CEO Richard Edelman and Robert Casamento, the company’s climate chair.
Meisel at Clean Creatives claimed nothing has come of it — at least nothing publicly known. “They haven’t dropped any of their clients,” he said. “It appears they are sort of doing business as usual.”
In response to several questions, company spokesperson Kate Meissner wrote in an email, “We believe our industry and our firm have an essential role to play in fighting climate change.”
She declined to reveal their current clients, citing confidentiality agreements.
Meisel said Edelman’s lack of disclosure about company policies “is really hurting them and is essentially the opposite of the advice they give clients on crisis management, which is to get ahead of the story by showing how you’re changing.”
Even though the criticism goes back a decade, he said the firm has never given clear public commitments to what they are going to do differently.
“At this point there’s no reason to trust this kind of vague, secretive approach,” Meisel said.
History with DOE
During the Trump administration, Edelman was the preferred public relations outfit for DOE.
When a reporter on at least one occasion called DOE’s press office, they got a call back from the firm, which at the time had been hired to promote nuclear energy events targeted at millennials (Energywire, June 24, 2019).
DOE has since scaled back its use of Edelman, albeit only slightly, records show.
In fiscal 2022, DOE paid the firm $2.3 million. The prior fiscal years, the contracts amounted to somewhere between $1 million and $3 million. DOE spent $5.4 million in fiscal 2019.
DOE is not alone. The Department of Health and Human Services has paid Edelman $20 million since 2018 for a national education campaign and outreach.
Executives Casamento; Deanna Tallon, climate and sustainability managing director; and John Edelman, who spearheads the company’s corporate responsibility work, said in another post they were having conversations with clients “about our principles, the commitments we have made and the actions we are taking.”
They said the company incorporated climate principles into the client acceptance process and “have decided not to pursue certain new opportunities.”
American Fuel & Petrochemical Manufacturers may have been one of the casualties of Edelman’s review.
When Buzzfeed last year reported Edelman had $4 million in contracts with AFPM, critics pointed to the group’s opposition to certain climate action on Capitol Hill.
AFPM spokesperson Ericka Perryman told E&E News last month it “decided to let our Edelman contract expire at the end of last year.”
“We’re grateful for the support we received from Edelman over many years of work together and we wish them all the best,” she wrote.
Today’s Key Takeaways: Russia averages $977m per day in fossil fuel exports despite bans. How can the oil industry respond to the “Great Crew Change” and the Great Resignation”? Collapse of Chinese imports of U.S. LNG. Southcentral AK project shows high quality gold, zinc, copper and more! AK Supreme court decision keeps Sweeney off ballot.
The largest importers of Russian fossil fuels since the war
Despite looming sanctions and import bans, Russia exported $97.7 billion worth of fossil fuels in the first 100 days since its invasion of Ukraine, at an average of $977 million per day.
So, which fossil fuels are being exported by Russia, and who is importing these fuels?
The global energy market has seen several cyclical shocks over the last few years.
The gradual decline in upstream oil and gas investment followed by pandemic-induced production cuts led to a drop in supply, while people consumed more energy as economies reopened and winters got colder. Consequently, fossil fuel demand was rising even before Russia’s invasion of Ukraine, which exacerbated the market shock.
Russia is the third-largest producer and second-largest exporter of crude oil. In the 100 days since the invasion, oil was by far Russia’s most valuable fossil fuel export, accounting for $48 billion or roughly half of the total export revenue.
Concerns about the ‘Great Crew Change’ that began as the shale revolution took off are combining with concerns about the “Great Resignation” of the pandemic era and how companies will meet their staffing needs.
Oil companies have an additional challenge of attracting the next generation of professionals as they work to overcome public perceptions about the environmental impact of fossil fuels.
“It can get tricky,” acknowledged Vince Dawkins, chief executive officer and president of Enertia Software.
Speaking with the Reporter-Telegram by telephone, Dawkins advised energy companies to “dive into” those concerns.
If the concern is about oil and gas “going away,” he suggested asking the applicant about their car, what appliances they have in their home and point out all the things that are dependent on oil and gas to emphasize that oil and gas isn’t going away soon.
“Ask questions, provoke thought,” he suggested.
Those just coming out of college or who are early in their careers have different viewpoints and ideas that can be valuable, he added. It’s not thinking outside the box, he said, but “hopefully start to widen the box.”
Enertia is a software company specializing in serving the upstream sector of the energy industry, and Dawkins said technical skills have become as important as reservoir engineering, a production foreman or accountant.
Adequate staffing is difficult now because the labor market is shrinking, Dawkins said. And he offered a warning for operators to prepare for the years ahead.
“I do see a cycle of the labor market shrinking and then beginning to expand again,” he said. “Oil companies would be smart to prepare – put things in place to be ready for the onslaught.”
Have the mindset of continually looking for the best talent rather than trying to hire in waves, he continued. And look for new hires that don’t necessarily have the best experience but fit into the corporate culture, challenge the system, and bring new ideas that will improve the company, he said.
Retaining staff is also super valuable, Dawkins said. Employers seeking to retain talented staffers must be competitive not just in salaries but in the challenges the jobs offer and the growth potential of those jobs. He said employers must make sure to have regular conversations with their staffs about what drives them in their position and what they want from the work.
Chinese imports of LNG from the U.S. plunged by 95% between February and April.
Most U.S. LNG spot cargoes were headed to Europe at the beginning of 2022.
Russia could become too dependent on China for its gas sales.
As European LNG buyers are snapping up cargoes from the United States in a race to replace Russian pipeline deliveries, America has become a major supplier to Europe, and its sales to China have dwindled to just a few cargoes shipped so far this year. Chinese imports of LNG from the U.S. plunged by 95% between February and April compared to the same period in 2021. Meanwhile, Chinese imports of LNG from Russia jumped by 50%, according to Chinese customs data cited by The Wall Street Journal.
That’s a major shift in U.S. LNG shipments to China. The United States was the largest supplier of spot LNG volumes to China last year, the EIA said last month.
So far this year, the United States has sent the occasional LNG cargo to China, but most exports have headed to Europe, which is paying more for spot LNG supply.
In April 2022 alone, five European countries—France, Spain, the UK, the Netherlands, and Poland—accounted for 54.1% of total U.S. LNG exports, data from the U.S. Energy Department showed last week.
The European Union and the UK saw a record high level of LNG imports in April, as higher spot prices in Europe compared to Asia attracted suppliers with destination flexibility to ship LNG to Europe. Those suppliers were mostly from the United States, the EIA said earlier this month.
The Russian invasion of Ukraine and Europe’s resolve to kick its Russian energy addiction are changing global energy flows, not only in oil but also in gas.
Europe is pricing out Asia for spot deliveries and is turning to LNG, mostly from America, to cut its still heavy dependence on Russian gas. At the same time, China is buying more LNG from Russia, which the West doesn’t want to touch. High spot LNG prices and lackluster demand due to China’s zero-COVID lockdowns have significantly reduced Chinese appetite for U.S. LNG this year.
Yet, scarce LNG imports from the U.S. in China will not persist for years to come because Chinese state majors and other energy firms have been signing long-term deals with American exporters in recent months. Some of those LNG deliveries will begin as soon as 2022 and 2023.
Nevertheless, the global energy trade flows are changing, and they are changing for good. Europe will not return to Russian energy and is on an irreversible path to cut off dependence on Russia’s oil and gas, sooner for oil than for gas.
Banned, sanctioned, and shunned in the West, Russia is now looking East to sell its energy. Analysts warn, however, that Russia—having no other choice—could become too dependent on China, especially for its gas sales. Moreover, the pipeline and LNG volumes Russia is sending to China are just a fraction of Russian pipeline exports to Europe, even as Russia has slashed gas supply to Europe in the past weeks.
Russia is already sending natural gas via pipeline to China through the Power of Siberia pipeline, which became operational at the end of 2019. There are plans for another major gas pipeline to deliver gas from Russia to China, but this will take years to complete and commission.
The European gas market remains far bigger and far more lucrative, says Nikos Tsafos, the James R. Schlesinger Chair in Energy and Geopolitics at the Energy Security and Climate Change Program at the Center for Strategic and International Studies (CSIS).
“Russia could eventually build a sizable business geared toward Asian markets, but the shift will be neither immediate nor easy, and it will depend critically on foreign partners, including China,” Tsafos wrote in an analysis last month.
“To secure a contract with China, Russia had to offer a bargain deal: China pays far less for Russian gas than Europe does,” he added.
HighGold Mining Inc. June 22 reported that testing shows that conventional metallurgical techniques yield very high-quality copper, zinc, lead, and gold concentrates from the JT deposit on its Johnson Tract project in Southcentral Alaska.
According to a calculation completed prior to the start of 2020 drilling, the JT deposit hosts 2.14 million metric tons of indicated resource averaging 6.07 grams per metric ton (417,000 ounces) gold, 5.8 g/t (397,000 oz) silver, 5.85% (275.3 million pounds) zinc, 0.57% (26.8 million lb) copper, and 0.71% (37.6 million lb) lead.
Using a composite sample of the dominant JT deposit mineralization, Blue Coast Research Ltd. completed the metallurgical work.
HighGold reports that locked cycle flotation tests with a coarse primary grind yielded very high-quality copper, zinc, lead, and gold concentrates with very good metal recoveries. These concentrates have very low impurities and negligible penalty elements.
Highlights include:
• Gold recovery of 97.2% combined total of payable gold to concentrates and leaching of tails.
• Zinc recovery of 92.3% to a concentrate grading 52.6% zinc.
• Copper recovery of 84.5% to a concentrate grading 30.6% copper.
• Lead recovery of 72.4% to a concentrate grading 62.1% lead.
The Alaska Supreme Court on Saturday upheld a lower court’s ruling that will keep Republican Tara Sweeney off the ballot for the August special election in Alaska’s U.S. House race.
In a brief written order, the high court said it affirmed the decision of Superior Court Judge William Morse, who agreed with a decision by Division of Elections Director Gail Fenumiai to not advance Sweeney, the fifth-place finisher in the June 11 special primary, to the special election after the third-place finisher suddenly dropped out.
The court did not elaborate on its reasoning but said a full opinion will follow at a later date. Morse on Friday ruled in favor of the elections division. The decision was appealed by the plaintiffs in the case.
Forty-eight candidates ran in the special primary for Alaska’s House seat, which was left vacant by the death in March of Republican Rep. Don Young, who held the seat for 49 years.
The special primary was the first election held under a system approved by Alaska voters that ends party primaries and institutes ranked choice voting in general elections.
In this case, the top four vote-getters due to advance to the special election were Republicans Sarah Palin and Nick Begich, independent Al Gross and Democrat Mary Peltola. That changed when Gross abruptly withdrew Tuesday.
Fenumiai had said that because Gross withdrew less than 64 days before the scheduled Aug. 16 special election, state law did not permit the division to put the fifth-place candidate on the ballot in his place.
On Thursday, three voters sued to have Sweeney put on the ballot, claiming elections officials misinterpreted the law and that the timeline to withdraw did not apply to special elections.
Messages sent to three attorneys representing the plaintiffs were not immediately returned to The Associated Press on Saturday.
“The law was clear, and I’m pleased the courts affirmed such. Now, it’s time to take our campaign to the voters in the general election and earn their support,” Begich said in an email to the AP.
Peltola said her campaign was “focused on our own race.”
“We’ll let the Republicans sort themselves out,” she said in an email to the AP.
Sweeney said in a statement that she was disappointed not to be among the four to advance in the special election to serve the remainder of Young’s term, but she was still running in an August regular primary and November general election to determine who will serve a new, two-year term, starting in January.
“Alaska politics has a history of comeback stories, and I look forward to writing the next chapter by fighting to represent Alaska,” she said.
The Palin campaign did not immediately return a request for comment.
The division will finalize the ballot design this week, as scheduled, said Department of Law spokesperson Patty Sullivan. Judges saw that the law allows only the top four candidates to advance unless someone withdraws by the deadline, she said, and Gross “simply withdrew too late.”
Attorneys for the state said in court filings that while the division was “sympathetic to the public expectation” that under the new system four candidates would advance, “it lacks the discretion to relax an unambiguous statutory deadline to effectuate this goal.”
Morse in his written order said the timeline under which a substitution could occur in this situation “could hardly be briefer.” But he wrote, “that is the period set by statute and the one the Division must apply.”
Sweeney’s campaign did not sue over the issue, but she had said that she believed she should be moved into fourth place and that voters should have four candidates to choose from.
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West Virginia Democratic Sen. Joe Manchin criticized the idea of a national shift away from gas cars toward electric vehicles in lacerating terms yesterday, raising doubts about the fate of pro-EV policies being discussed in reconciliation bill talks.
Manchin’s comments during a Senate Appropriations subcommittee hearing on trade coincided with Manchin’s meeting with Senate Majority Leader Chuck Schumer (D-N.Y.) on a slimmed-down budget reconciliation package.
“In terms of reconciliation, I met with Senator Manchin again this morning,” Schumer told a gaggle of reporters yesterday afternoon. “We’re continuing to have very good and productive discussions, but there are still some issues that have to be resolved.”
At least one of those issues appears related to a host of tax credits to spur the domestic manufacturing and deployment of electric vehicles.
Manchin urged U.S. Trade Representative Katherine Tai to crack down on China for what he characterized as its flouting of trade rules, before venting about calls for an aggressive transition to electric cars, which he said would leave the United States beholden to Chinese supplies of batteries and associated materials.
“I’ll tell you my biggest peeve right now is the whole thing with the EVs, the batteries, chips and all the different things. Rare earth minerals, processing, anodes, cathodes, everything that we need. If we’re ever going to get this industry up and running and be self-sufficient in North America, then we have to make sure they can’t dump on us,” the Energy and Natural Resources Committee chair said of Chinese producers.
“Right now, we’re about ready to put our whole eggs in one basket, thinking EVs are the way to go, and we’re going to be absolutely so taken advantage of, to the point to where we’re going to be held hostage by the foreign supply chain that China has a grip on,” Manchin said. “I just can’t believe we’re even thinking about going down that path, and I’m going to do everything I can to stop it. Because I think it’s stupid.”
Manchin continued, “We’re just held at a disadvantage because of the economy we have and the way we administer our economy.”
He told Tai, whose office can impose tariffs and other duties on foreign importers, “We depend on you all to crack hard and crack them down as tight as you can.”
Manchin’s comments were his latest sign of opposition to the Biden administration’s ambitions for electric vehicles, which the president wants to make up half of all car sales by 2030. They land in the midst of negotiations among Democrats over the clean energy details of a reconciliation measure, which stalled last year due to Manchin’s resistance.
It was unclear whether the senator’s remarks reflected opposition to any specific pro-EV policy, and Manchin’s office did not respond to E&E News inquiries yesterday. But the comments may signal a hard road ahead for striking a deal on a package with the type of clean energy supports that Biden, EV advocates and their Democratic allies want to see.
“The fact is that the transition to zero-emission transportation is all about multiplying baskets. It’s not ‘all eggs in one’,” said Genevieve Cullen, president of the Electric Drive Transportation Association (EDTA). “If we do this right, we are going to be making more diverse and more resilient supply chains. That’s why it’s called a transition.”
Biden’s 2030 goal for EV sales could hinge on additional federal policies, Cullen and other EV advocates believe.
“The scope and speed we need absolutely wants policy signals,” said Cullen.
“From where I’m sitting, [Manchin’s comments] are a statement about the need for a comprehensive approach to the transition,” she added.
Manchin has often expressed skepticism about the electric vehicle transition. Earlier this year, he described himself as “very reluctant” to promote them due to foreign supply issues and called fatter tax credits for EV drivers — a key ask for advocates — “absolutely ludicrous,” given growing consumer demand for them (E&E Daily, April 29).
More recently, the senator has been playing defense against key Democratic priorities as part of ongoing reconciliation talks. This week, Manchin said the idea of expanded EV tax credits for unionized automakers — among the ideas pushed by Biden — had been dropped from talks, according to a report from Bloomberg.
Still, EV proponents have been floating other policies in hopes that they may catch on. Last week, for instance, chief executives at four major automakers wrote to Congressional leaders asking them to change a law that limits eligibility for EV tax credits to companies that have sold less than 200,000 electric cars (Energywire, June 14).
Joe Britton, executive director of the Zero Emission Transportation Association (ZETA), an EV advocacy group, said in an emailed statement to E&E News that the existing tax credit “needs to be as universally accessible as possible to catalyze American job growth and accelerate transportation electrification.”
“The biggest problem with the current EV tax credit is that it doesn’t allow GM, Tesla and most recently Toyota to offer it to consumers anymore. Ford will be in the same spot very soon. That is bad for U.S. manufacturing,” said Britton.
“Electric vehicles remain some of the most American-made cars and powering these vehicles with U.S. power generation will help sever our reliance on unstable global oil markets,” added Britton, in response to a question about Manchin’s comments at the hearing.
“Paired with investing in domestic battery production and accelerating critical mineral development, our electric vehicle sector is one the best opportunities to beat out our competitors, improve our energy security and ensure economic freedom.”
The hearing took place on the same day as the release of an International Energy Agency report that outlined issues facing battery supplies.
Key minerals like cobalt, nickel and copper have risen in price in 2021 and 2022 faster than any time in the 2010s, found the IEA.
And the Russian war in Ukraine is exacerbating doubts, since Russia produces over 20 percent of the world’s Class 1 nickel — although the country also churns out twice that percentage of palladium, used in gas cars’ catalytic converters.
At yesterday’s hearing, Manchin seemed open to a separate climate policy included in reconciliation talks: a carbon border adjustment, which would tax imports based on their greenhouse gas emissions.
“The reason we have Democrats and Republicans talking about a border adjustment, we think that’s the only level playing field we might have [against China],” he said.
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