Today’s Key Takeaways: Manchin/Schumer deal gives $369B to energy/climate change, 15% corporate income tax, methane fee, reinstates Gulf of Mexico oil drilling leases. U.S. top oil consumer in 2021. Angolan miners discover largest pink diamond in 300 years. Unclear whether new climate legislation deal can pass Senate and House.
An emerging Capitol Hill deal could give White House carbon-cutting goals a huge lift that looked all but impossible weeks ago.
Why it matters: President Biden’s target under the Paris Agreement of cutting U.S. emissions 50% by 2030 could be within reach if Congress approves the new clean energy investments, analysts say — but it’s not clear that it would have the votes to pass.
If approved, it would be the biggest federal investment in clean energy yet made in the United States.
Manchin’s vote is needed to move the bill on a party-line vote.
But Sen. Kyrsten Sinema (D-Ariz.) would have to vote for it too, and there’s no guarantee that she will. “We do not have a comment, as she will need to review the text,” a Sinema spokesperson told Axios’ Alayna Treene and Hans Nichols Wednesday night.
Details: The bill would provide tax credits and other incentives to spur the development and deployment of clean energy and carbon abatement technologies.
These include wind and solar power, so-called “clean hydrogen,” as well as direct air capture.
It also includes monetary incentives to help people buy clean cars, subject to certain income requirements.
It would incentivize the increased domestic production of critical minerals used in batteries for electric vehicles.
In a concession to Manchin, the bill would also force the Interior Department to reinstate Gulf of Mexico oil drilling leases from a 2021 auction that was vacated by a federal judge and conduct new Gulf leasing as well.
Zoom in: A few takeaways on the bill’s unexpected revival Wednesday evening…
1. It looks consequential. Schumer and Manchin jointly said it would cut U.S. emissions by 40% by 2030. Schumer’s office confirms that’s from 2005 levels, the same baseline as Biden’s pledge.
Ben King of the Rhodium Group, a research firm, tells Axios if the deal is consistent with the package they’ve previously modeled, it could “plausibly” put the U.S. on track for a 40% reduction.
“Additional action by the Biden administration and states can help close the rest of the gap to the target of a 50-52% cut by 2030,” he said via email.
Princeton University energy expert Jesse Jenkins also tells Axios that the estimate from Schumer’s office looks accurate.
“It’ll probably be at least 800 million tons and up to 1 billion tons of additional [emissions] reductions in 2030 relative to current policy baseline,” he said via email, noting that’s about two-thirds to three-quarters of what’s needed to reach Biden’s target.
2. It has global implications. Stronger U.S. climate efforts could prompt other big polluters to do more. Peer pressure matters in global climate diplomacy since commitments under the Paris deal are voluntary.
3. The path forward looks very real. Several of the most outspoken lawmakers on climate — like Sens. Brian Schatz and Sheldon Whitehouse — applauded the deal.
The House Progressive Caucus said it needs to evaluate the details of the overall package but said it’s a “promising” step.
But it’s certainly not a done deal. Every Senate Democrat must be on board to move the bill, while House Democrats can afford only a handful of defections.
4. Some lawmakers will have to grit their teeth. Manchin, whose state is a big coal and gas producer, backs fossil fuels more than most Democrats.
In a statement, he said the deal invests in tech needed for all energy types — including fossil fuels — to be used as cleanly as possible.
“This bill does not arbitrarily shut off our abundant fossil fuels,” Manchin said.
What they’re saying: University of California at Santa Barbara climate policy expert Leah Stokes said the bill would be “transformative” in terms of boosting clean energy jobs and manufacturing — and would be timely after the extreme weather events of recent weeks.
“I think that the last two weeks have shown us what the price of failure is. That it is an unlivable planet,” she said.
According to BP’s latest annual statistical review of world energy, the top oil consumer in the world in 2021 was the United States with a consumption rate of 18.68 million barrels per day.
BP highlighted that this figure was 8.7 percent up from 2020’s consumption rate, which was shown to be 17.18 million barrels per day. The U.S. consumed 19.42 million barrels of oil per day in 2019, 19.41 million barrels per day in 2018, 18.84 million barrels per day in 2017, 18.59 million barrels per day in 2016, and 18.49 million barrels per day in 2015, BP’s review showed.
China ranked second in oil consumption last year with 15.44 million barrels per day, while India ranked third with 4.87 million barrels per day, according to BP’s review. China’s consumption in 2021 marked a 7.2 percent increase compared to 2020 and India’s consumption last year marked a 3.8 percent gain on 2020, BP’s review highlighted.
In terms of natural gas consumption, the U.S. also took the 2021 top spot with a demand level of 826.7 billion cubic meters, BP’s review showed. Although this was the top consumption figure in the world last year, it marked a 0.4 percent drop compared to the 2020 U.S. natural gas consumption figure of 831.9 billion cubic meters, BP’s review outlined.
In 2019, the U.S. consumed 850.7 billion cubic meters of natural gas, in 2018 this figure was 821.7 billion cubic meters, in 2017 it was 740 billion cubic meters, in 2016 it was 749.1 billion cubic meters, and in 2015 it was 743.6 billion cubic meters, according to BP.
Russia ranked second in gas consumption last year with 474.6 billion cubic meters, while China ranked third with 378.7 billion cubic meters, BP’s review highlighted. Russia’s consumption figure was up 12.4 percent on 2020 and China’s consumption figure was up 12.8 percent on 2020, BP pointed out.
BP’s latest review highlighted that total world oil consumption in 2021 was 94.08 million barrels per day and total world natural gas consumption was 4.03 trillion cubic meters. Oil production was shown to have grown six percent compared to 2020, while gas production was shown to have grown 5.3 percent compared to 2020.
The diamond will likely become the most expensive gemstone ever sold.
Miners in Angola have uncovered a massive pink diamond that may be the biggest gem of its kind found in the past 300 years.
The pink diamond is estimated to weigh 170 carats, making it just a smidge smaller than the 182-carat Daria-i-Noor diamond — the largest pink diamond in the world, which today is part of the Iranian National Jewels.
The new diamond has been nicknamed the “Lulo Rose,” after the Lulo mine in northeastern Angola where it was found, according to a statement from the Lucapa Diamond Company, which owns Lulo and one other diamond mine in Angola. Since 2015, the Lulo mining project has uncovered 27 diamonds weighing more than 100 carats, including the largest diamond ever found in Angola: the 404-carat “4th February Stone,” which sold for $16 million in 2016.
The oil and gas industry would face a first-time fee on the excess emission of methane under a breakthrough spending agreement reached on Wednesday by Senate Majority Leader Chuck Schumer and Senator Joe Manchin.
Methane leaking from oil and gas wells, pipelines and an array of other infrastructure would lead to fees rising to as much as $1,500 a ton in 2026 for some operators, according to the text of the agreement, which is set for a Senate vote as soon as next week.
The legislation which also includes hundreds of millions of dollars in incentives for the industry to monitor and clean up methane leaks, comes amid increasing scrutiny of methane, the primary component of natural gas, which pound-for-pound has more than 80 times the heat-trapping power of carbon dioxide. Reducing emissions of the greenhouse gas is considered crucial in the struggle against climate change.
Any fees would come alongside separate Environmental Protection Agency efforts to limit methane emissions, including proposals to strengthen requirements for companies to find and plug leaks at hundreds of thousands of oil and gas wells.
Overall, the broader deal includes some $369 billion on climate and energy spending including on a series of new and extended tax credits for clean energy and electric vehicles. It remains unclear whether the deal will be backed by the full Democratic caucus in the 50-50 Senate.
It would also have to pass the House, where progressives sought a much more expansive plan.
Today’s Key Takeaways: Fitch Ratings report details how critical metals and mining is to green energy future. Crude oil exports reduce costs for Americans. Interior Gas Utility adds customers. Nippon Steel Company signs most expensive coal contract ever. More attacks on Big Oil from Biden’s climate allies.
Lots of ink has been spilled on the green energy transition in these pages.
In 2019 MINING.COM called Greta Thunberg and Alexandria Ocasio-Cortez mining’s unlikely heroines saying that the “exponential expansion of global mining is the dirty little secret – and glaring blind spot – of Green New Deal evangelists and zero-carbon climate warriors.”
Fast forward three years and there’s still little or no acknowledgement from climate crisis actors for the need for rapidly growing metal and mineral extraction. The nescience of climateers when it comes to mining remains striking and helps explain the applause for Secretary General António Guterres at the opening of the COP26 summit for these words:
“It is time to say enough! […] enough of burning and drilling and mining our way deeper. We are digging our own graves.”
A recent report by Fitch Ratings assessing the risks of climate change to various sectors featured two graphs that vividly illustrates just how central metals and mining is to decarbonization.
The latest UN Forecast Policy Scenario anticipates a substantial increase in electricity generation from renewables – comprising hydro, wind and solar – across all regions.
Renewables are set to be the largest source of power globally by 2050, at 73% of the total compared to 25% in 2020. Wind and solar will increase their share of global renewables generation to 85% by 2050 from 34% in 2020.
Couple this with the metal intensity of renewable energy resources and it is clear that even if the installation of renewable energy capacity falls far short of expectations, the impact on metals and mining would be immense.
The American Petroleum Institute (API) and the American Exploration and Production Council (AXPC) today released new analysis demonstrating the significant and growing economic benefits of America’s abundant crude oil resources for both domestic use and global export. The study, conducted by ICF, analyzed the six-year period since a bipartisan Congressional majority lifted a ban on exporting U.S. crude oil in December 2015. The study found that enabling open markets increased oil and natural gas development in America, which, over the six-year period, reduced global oil prices by an average of $1.93 per barrel; added $161 billion to U.S. GDP; and increased jobs in the U.S. by nearly 50,000, on average.
“American energy leadership doesn’t just deliver significant benefits to Americans – fueling the U.S. economy and American jobs, delivering reliable energy, and helping put downward pressure on prices, but it also strengthens global security and supports our allies,” said API President and CEO Mike Sommers. “U.S. energy exports provides critical stability to the global market, supports our allies across the world who depend on American energy to meet their needs and strengthens American energy security here at home. If the U.S. is not exporting energy, it leaves the door open for unstable nations or those with less stringent environmental standards to fill the void and reap the benefits.”
“As this analysis shows, lifting the ban on crude exports in 2015 saved Americans money at the pump, supported thousands of good-paying American jobs, and reduced our country’s dependence on foreign oil. At a time when Americans are hurting from the price at the pump, it’s clear that increasing the global supply of crude oil is critical to lower energy prices here at home and greater energy security around the globe,” said AXPC CEO Anne Bradbury.
The new study analyzes the changes that have occurred in U.S. oil and natural gas markets since Congress enabled crude oil exports compared to a hypothetical scenario where the ban on U.S. oil exports remained in place. The study found that lifting the ban on U.S crude oil exports has over a six-year period:
Increased U.S. Crude Oil Production by 1.8 billion barrels: Allowing U.S. domestic oil prices to converge with international benchmarks, spurred more drilling activity leading to higher crude oil production, as well as higher production of associated natural gas and NGLs that come from oil wells.
Decreased U.S. Consumer Expenditures on Refined Products and Natural Gas by $92 billion: Higher U.S. oil production expanded global oil supply, reducing global crude oil and refined product prices. Because there is free trade in petroleum products, U.S. fuel consumers have benefited from these lower product prices.
Increased U.S. GDP by $161 billion: The benefits of lower fuel costs for U.S. consumers and higher revenues for U.S. oil producers (due to higher output and higher domestic crude prices) outweighed margin losses for U.S. refiners, resulting in a net benefit to U.S. GDP.
Improved the U.S. Trade Balance by $178 billion: Higher U.S. exports have improved the U.S. trade balance, reducing the U.S. trade deficit by a measurable amount.
Increased U.S. Employment by an average of 48,000 jobs: Lifting the crude export ban has increased U.S. employment, including direct jobs in the Upstream oil & gas sector, such as petroleum engineers and geologists, industrial machinery installation and maintenance, derrick operators, rotary drill operators, roustabouts, and service unit operators. The policy change has also created indirect and induced jobs.
The Interior Gas Utility continues to slowly add customers, with 21 new clients having turned on gas so far this year.
New government subsidies are becoming available to people willing to convert to cleaner-burning natural gas. The utility also is looking for new gas suppliers. The current supplier, Hilcorp, has said not to count on gas after 2032.
In a routine update of utility operations to the Fairbanks North Star Borough Assembly, utility officials said last week that a project to expand a liquefaction plant in the Matanuska-Susitna Borough, where Hilcorp’s gas from the Cook Inlet is currently processed en route to Fairbanks, is again on hold, as IGU officials reevaluate future prospects for gas.
“We can’t guarantee a supply of gas to the liquefaction plant, which is pretty significant,” Steve Haagenson, IGU board president, told the assembly.
The utility is likely to obtain future gas using a combination of sources, including gas from the North Slope and possibly imported liquified natural gas.
Elena Sudduth, customer service and marketing manager, said the IGU remains on track to install 600 new service lines this year.
“We believe that we will reach that goal,” she said.
A source of government funding to subsidize the cost of converting boilers to natural gas has run out, but two new sources of money are pending. Applications are being waitlisted, Sudduth said.
Natural gas is currently much cheaper than delivered home heating oil, she added.
The hunt for natural gas
In April, gas supplier Hilcorp notified utilities, including the IGU, that “they should not rely on Hilcorp for natural gas supply past their existing contracts,” according to Sudduth.
The IGU’s contract with Hilcorp expires in 2032.
“We are good for another 10 years, but after 10 years, we are not sure that we are going to be able to continue sourcing natural gas in the Cook Inlet,” Sudduth said. “We are working full steam ahead to determine what all of our options are.”
In May, the IGU joined a working group with other Alaska utilities “to assess future gas supply needs and energy security in Cook Inlet,” the announcement reads.
The working group includes Chugach Electric Association, Matanuska Electric Association, Homer Electric Association, Golden Valley Electric Association and ENSTAR Natural Gas Company. The Alaska Department of Natural Resources and the Alaska Energy Authority are also involved.
Sudduth said the IGU and ENSTAR are well positioned among the utilities, with contracts in place for another 10 years. Homer Electric’s gas contract with Hilcorp ends in a few years, she said.
The long-awaited expansion project of the liquefaction plant at Port MacKenzie remains uncertain. The IGU had sought permission for a bond sale to raise money to pay for the buildout, but questions over the long-term viability of Cook Inlet gas has dashed the project.
Options will be discussed by the IGU board of directors, with more information presented to the assembly in October, Sudduth said.
Gas company growth
As of July 18, the number of completed gas line installations this year was 158, Sudduth said. Of those, 21 have had their gas turned on.
About 500 applications have been approved for connection this year. Most are residential, and about a third are in North Pole.
The utility has three construction crews conducting the work and a third-party contractor helping, Sudduth said.
The IGU currently has nearly 2,000 customers. Full capacity is about 11,000 customers.
Last year, the IGU connected more than 300 new properties to the natural gas network, Sudduth said.
Programs aimed at helping people convert
The borough is providing subsidies for converting to natural gas through its air quality office using various pots of money.
“A lot of our customers need help,” Sudduth said.
The cost to convert heating equipment to burn natural gas can be several thousands dollars, depending on multiple factors.
One subsidy, $1 million that was provided by the Borough Assembly using federal coronavirus relief money, is all allocated, Sudduth said.
Two new sources of money from the state and federal governments are pending.
One subsidy of $3.2 million is coming from the U.S. Environmental Protection Agency’s Targeted Airspeed Grant program.
“The funds have to go through different departments at the state and local level,” the IGU quarterly update reads. “The [FNSB] Air Quality office expects to be able to approve applicants in October.”
The Borough is also anticipating a $1.25 million allocation from the State of Alaska’s capital budget to help people offset the cost of converting to gas.
In addition, at least three lenders, MAC Federal Credit Union, Northrim Bank and Mt. McKinley Bank, in Fairbanks are offering special financing, through home equity loans, to help people convert to gas, Sudduth said. Terms vary.
Japan’s Nippon Steel Corporation has signed an agreement with mining and trading giant Glencore for thermal coal supply at $375 per ton in what is likely one of the highest prices a Japanese firm has paid for the commodity ever, sources familiar with the deal told Bloomberg on Wednesday.
As coal prices are soaring amid a global energy crunch and bans on Russia’s coal exports in the West, customers around the world are paying record-high prices for coal and are using more coal as they switch from expensive gas, where the market is even tighter.
The price in the Nippon Steel-Glencore agreement for coal supply until March 2023 is three times higher than the price of similar supply deals signed last year, one of Bloomberg’s sources says.
Japan, a major importer of energy commodities, is looking to secure supply amid soaring coal and gas prices and utilities switching to coal from gas where possible to conserve gas. Japan is on the brink of an energy crisis as it is forced to tackle a combination of a weak local currency, the fallout from the Ukraine war, and summer heatwaves.
At the beginning of the summer, the Japanese government called on households and companies to conserve as much electricity as possible this summer, seeking to prevent blackouts as spare power reserve capacity is expected to drop to critically low levels. The nationwide energy-conservation effort will be implemented from July 1 to September 30, amid concerns that Japan’s power system may not handle demand in peak summer.
Companies and countries importing energy commodities face surging coal prices as Europe restarts mothballed coal-fired power plants to conserve gas with the high uncertainty over Russian gas supply. The global coal benchmark, Australia Newcastle Coal futures, hit $414 on ICE Futures Europe early on Wednesday, while coal futures for 2023 in Europe soared to a record high on Tuesday after Russia said it would slash gas supply to Europe again.
The green group Climate Power plans to seize on this week’s earnings reports from major oil and gas companies to blame them for high gas prices.
Why it matters: The $3 million ad campaign, encompassing broadcast TV, digital and billboards, is another indication that President Biden’s allies know gas prices will be a key factor in the midterm elections.
Details: “This is why you’re paying $5 at the pump,” says the narrator of an ad titled “Guess What.” “Oil company CEOs see an opportunity to charge more.”
The TV and digital ads will initially appear in media markets in Nevada, Arizona, Virginia and Colorado where Democratic incumbents — in both the House and Senate — need to hold on to independent voters.
The group will also rent billboards near gas stations in places like Phoenix, Las Vegas, Philadelphia, Milwaukee and Orange County, California. Inflation is hitting battleground states like Arizona and Nevada harder.
Driving the news: Companies like Exxon Mobil and Valero Energy will be releasing their second-quarter earnings reports this week. Exxon has estimated its quarterly profit could set a record at around $18 billion.
Between the lines: While energy analysts and economists can patiently explain the “rockets & feathers” phenomenon — where crude oil prices rise like a rocket, while gas prices fall like a feather — Democrats remain outraged that the two prices don’t move in more synchronized ways.
The big picture: The Biden administration and the oil companies have been engaged in chippy back-and-forth on who is to blame for high gas prices, which climbed above $5 per gallon in June but have since dropped to around $4.36, according to AAA.
“We’re going to make sure everybody knows Exxon’s profits,” Biden said in June. “Exxon made more money than God this year.”
In addition to publicly accusing them of profiteering, Biden has directed his energy secretary to meet with them on ways to lower gas prices.
The other side: The oil and gas industry has bristled at the White House’s rhetoric and repeatedly called on Biden to pursue more domestic oil and gas exploration, including with its own ads.
“We urge the president to prioritize unlocking U.S. energy resources — that are the envy of the world — instead of increasing reliance on foreign sources,” Mike Sommers, the president of the American Petroleum Institute, wrote in June.
The intrigue: When the Interior Department announced its five-year plan for offshore drilling this month, Biden officials were open to new leases in the Gulf of Mexico and parts of Alaska, but ruled out drilling on the East and West coasts.
Some climate groups cried foul and criticized the plan.
Go deeper: In February, Climate Power and other environmental groups launched a $3 million campaign ahead of Biden’s State of the Union address to try to revive the green energy provisions in Biden’s Build Back Better agenda.
The prospects for any climate spending are lower now, however, after Sen. Joe Manchin (D-W.Va.) said he wanted to wait to gauge how hot inflation is running before committing to the $300 billion he has previously supported. But there’s a sliver of hope within the White House that Manchin can still be convinced.
In June, climate groups announced a plan to spend some $100 million to mobilize voters on climate issues, CNN reported.
Today’s Key Takeaways: EPA regulatory decision in Permian will affect gas prices. Russia takes stock in Arctic oil field. EU to curb gas consumption. 71% of voters want government to boost domestic energy production. Chilean copper miner secures options on Alaska copper-gold project.
NEWS OF THE DAY:
Industry: Permian Basin ozone plan will affect gas prices Sean Reilly, Greenwire, July 26, 2022
As EPA mulls a regulatory decision regarding air quality in the nation’s largest oil-producing region, industry groups are already angling to frame the issue in terms of gas prices and are mobilizing to push the White House to consider the impact at the pump.
EPA regulators have yet to unveil a proposal to flunk all or part of the Permian Basin for compliance with the agency’s latest smog standard, but the oil and gas industry is preemptively pressing for White House scrutiny as a “significant regulatory action” that could affect gasoline prices.
Such Clean Air Act “nonattainment” designations are customarily exempt from review by the White House Office of Information and Regulatory Affairs. “This action, however, is different in that it is a discretionary redesignation,” the American Petroleum Institute and a half-dozen other groups wrote in a publicly released letter late last week.
And while EPA’s latest rulemaking roster lists it as “nonsignificant,” they wrote, “we believe such a classification is inappropriate as this action is likely to be economically significant.” As grounds for that claim, the groups say that a redesignation would affect U.S. Treasury receipts because of the impact on oil and gas production and also conflict with President Joe Biden’s statement earlier this year to use “every tool at our disposal to protect” businesses and consumers from increased pump costs. While gas prices have fallen in recent weeks, they are still averaging about $4.35 per gallon, according to AAA, and are widely seen as a major political liability for Democrats in this year’s midterm congressional elections. Among other steps, deeming a proposednonattainment designation as “significant” could force EPA to assess the possible costs and benefits.
The industry letter is addressed to Shalanda Young, director of the Office of Management and Budget, which includes OIRA. An OMB spokesperson had no comment. An API spokesperson did not respond to an emailed question about the letter’s timing. The Permian Basin, which covers a 75,000-square-mile swath of West Texas and southeastern New Mexico, accounts for almost 40 percent of U.S. oil production, according to Texas regulators.
Smog is mostly made up of ground-level ozone, a lung irritant linked to asthma attacks in children that is in turn formed by the reaction of volatile organic compounds and nitrogen oxides in sunshine. Oil and gas operations spawn both classes of pollutants; under a move by EPA to deem all or part of the basin out of compliance with its 2015 ozone standard, producers could have to install “costly” pollution controls and face permitting delays, the letter said.
Currently, the region meets the 70 parts per billion limit, according to EPA listings made during former President Donald Trump’s administration. The possibility of a reclassification first surfaced last month with the rulemaking roster’s release (E&E News PM, June 24). While the agency at that point indicated that a formal notice could be coming shortly, this fall appears more likely, said Jeremy Nichols, climate and energy director for WildEarth Guardians, a Western environmental group that last year petitioned EPA to declare four New Mexico counties in nonattainment with the 70 ppb limit. While the Texas portion of the basin has no ozone trackers, monitoring on the New Mexico side is still showing violations, Nichols said.
Should EPA move forward, the process would kick off with a letter to governors of the affected states seeking feedback on the redesignation and the potential boundaries of any nonattainment area, an agency spokesperson said in a Friday email, adding that a final decision would be at least eight months away.
But even the possibility has already triggered opposition from Texas Gov. Greg Abbott (R), who urged Biden in a letter last month to halt any move in that direction by the end of this week (E&E News PM, June 27).
Under a Clinton-era executive order, a significant regulatory action could be one that carries a minimum economic impact of $100 million or raises “novel legal or policy issues.” For any proposed rule falling in that category, EPA and other agencies are supposed to provide an analysis of the possible costs and benefits, and “to the extent permitted by law,” an explanation of how it promotes the president’s priorities.
Determining whether a regulatory proposal is “significant” is a decision made within the executive branch, Cary Coglianese, a University of Pennsylvania law professor, said in an email. While the process typically involves communications between career staff at OIRA and agency employees, political appointees may also be pulled in, Coglianese said, and “rules can be classified as significant for even the most unspecified grounds.”
“One former OIRA Administrator has told me that what counts as ‘novel’ is whatever the administrator thinks it is,” he added. By going public with a disagreement over a significance determination, Coglianese said, a lobbying group can bring the issue to the attention of Congress, the news media, and officials elsewhere in the executive branch.
“For interest groups, activating others can sometimes be advantageous for purposes of trying to influence regulatory decisions.”
Along with API, the letter’s signers are the American Exploration and Production Council, Energy Workforce and Technology Council, GPA Midstream Association, Independent Petroleum Association of American, Permian Basin Petroleum Association, and Texas Oil and Gas Association.
Russia has announced it is acquiring the stock in an Arctic oil field now held by French and Norwegian companies
Russia announced further moves Tuesday to take over foreign ownership stakes in energy projects, saying it would acquire the stock in an Arctic oil field now held by French and Norwegian companies.
The Russian government said it approved a proposal for the Russian oil firm Zarubezhneft to acquire the stakes of TotalEnergies of France and Equinor of Norway in the Kharyaga project in the Arctic. The move gives Zarubezhneft 90% of the project’s shares, and the balance are held by another Russian company.
The Kharyaga oil project is operated under a product-sharing agreement, with Zarubezhneft serving as operator. Financial terms and other details of the transactions weren’t disclosed.
The acquisition is part of a divestment trend following foreign companies saying they would exit the Russian market because of the country’s military action in Ukraine.
On June 30, Russian President Vladimir Putin signed a decree handing full control over a major oil and natural gas project partly owned by Shell and two Japanese companies to a newly created Russian firm.
The new company takes over ownership of the Sakhalin Energy Investment Co., which was nearly 50% controlled by British energy giant Shell and Japan-based Mitsui and Mitsubishi.
European Union countries on Tuesday approved a plan to curb their natural gas consumption this winter in preparation of expected supply cuts by Russia.
Driving the news: EU energy ministers approved a proposal to reduce 15% of gas from August to March.
The big picture: The proposal comes as EU countries are facing reduced gas supply from Russia, after Russia’s Gazprom said this week, it will halt another turbine engine in the Nord Stream 1 pipeline.
The halt, which will reduce natural gas flows to only 20% of the pipeline’s capacity, comes just days after Gazprom resumed sending gas to Europe after a 10-day shutdown for maintenance, Axios’ Jacob Knutson reports.
Russia is Europe’s largest gas supplier, so EU energy ministers are encouraging countries to brace for limited supplies as Russia continues its unprovoked invasion of Ukraine.
Between the lines: The proposal, which did not require unanimity to pass, gained the support from all 27 member states except Hungary, the New York Times notes.
What they’re saying: “Today, the E.U. has taken a decisive step to face down the threat of a full gas disruption by Putin,” European Commission president Ursula von der Leyen said in a statement.
“By acting together to reduce the demand for gas, taking into account all the relevant national specificities, the EU has secured the strong foundations for the indispensable solidarity between member states in the face of the Putin’s energy blackmail,” she said.
Agrees to invest $30M to explore Tanacross over eight years
Chilean copper miner Antofagasta PLC has entered into an option agreement with Kenorland Minerals Ltd. to earn a 70% interest in Tanacross by investing US$30 million in exploration over eight years and publishing an NI 43-101-compliant preliminary economic assessment on the porphyry copper-gold project in eastern Alaska.
“We’re very excited to be working with Antofagasta on the Tanacross Project,” said Kenorland Minerals CEO Zach Flood. “The property, which covers numerous mineralised systems and target areas, warrants significant exploration to unlock the discovery potential that we believe exists.”
Five decades in the making
Lying alongside the Alaska-Yukon border, the 113,400-acre Kenorland property hosts world-class porphyry copper-gold deposit potential.
“Geologically speaking, the property has the right ingredients to host a significant mineral deposit – it sits on the intersection of two major crustal structures, has a large geophysical and geochemical expression, and the mineralized intrusions are the right age,” Flood told Mining News in 2018.
One of the major crustal structures at Tanacross, the Big Creek Fault, is also a major feature of Western Copper and Gold‘s world-class Casino porphyry deposit in the Yukon.
Situated about 90 miles southeast of Tanacross, Casino hosts 1.22 billion metric tons of reserves containing 5.1 billion pounds of copper, 8.5 million ounces of gold, 64.9 million oz silver, and 572 million lb of molybdenum.
Like Casino, Tanacross is located at the intersection of a second major structure intersecting the Big Creek fault.
Since the discovery of the East Taurus deposit in 1971, 17,076 meters of drilling in 67 holes have been completed at Tanacross.
With gasoline prices still near an all-time high, voters want the government to boost domestic production, and trust Republicans more than Democrats by more than 2-to-1 on the issue.
A new national telephone and online survey by Rasmussen Reports finds that 71% of Likely U.S. voters believe the U.S. government should encourage increased oil and gas production to reduce America’s dependence on foreign sources of oil and gas. Only 19% oppose a policy of encouraging U.S. energy independence, while 10% are not sure. These findings are nearly unchanged since March. (To see survey question wording, click here.)
Fifty-three percent (53%) of voters’ trust Republicans more to encourage U.S. oil and gas production, compared to just 24% who trust Democrats more. Another 18% think there is not much difference between the two parties on this issue.
Eighty-six percent (86%) of voters believe energy policy will be important in this year’s congressional elections, including 59% who say it will be Very Important. This finding also has barely changed since March.
The survey of 1,000 U.S. Likely Voters was conducted on July 18-19, 2022, by Rasmussen Reports. The margin of sampling error is +/- 3 percentage points with a 95% level of confidence. Field work for all Rasmussen Reports surveys is conducted by Pulse Opinion Research, LLC. See methodology.
Majorities across party lines – 85% of Republicans, 61% of Democrats and 68% of voters not affiliated with either major party – believe the U.S. government should encourage increased oil and gas production to reduce America’s dependence on foreign sources of oil and gas. Similarly, 71% of Republicans, 51% of Democrats and 56% of unaffiliated voters believe energy policy will be Very Important in this year’s congressional elections.
While 51% of Democratic voters trust their party more to encourage U.S. oil and gas production, only six percent (6%) of Republicans and 14% of unaffiliated voters share that opinion. Eighty-four percent (84%) of Republicans and 57% of unaffiliated voters trust Republicans more to encourage U.S. oil and gas production, and even 21% of Democratic voters agree.
Majorities of every racial category – 72% of whites, 64% of Black voters and 73% of other minorities – think the government should boost U.S. oil and gas production. Black voters trust Democrats more to encourage U.S. energy independence by a 42%-38% margin, while a majority (57%) of whites’ trust Republicans more and other minorities trust Republicans more by a 49%-30% margin.
More men (76%) than women voters (66%) believe the U.S. government should encourage increased oil and gas production to reduce America’s dependence on foreign sources. While men overwhelmingly trust Republicans (61%) more than Democrats (24%), the margin is only 46%-25% among women voters.
While a solid majority of voters 40 and older trust Republicans more than Democrats to encourage U.S. oil and gas production, the margin among voters under 40 is just 44% for Republicans to 33% for Democrats. Voters 40 and older are also significantly more likely to say energy policy will be Very Important in this year’s congressional elections.
Far more private sector workers (59%) than government employees (31%) trust Republicans more to encourage U.S. oil and gas production.
Voters with annual incomes below $100,000 are most likely to think the government should encourage increased U.S. oil and gas production.
Among voters who believe the government should encourage domestic energy production, 65% trust Republicans more to promote such a policy.
Media rumors suggest Hillary Clinton may be planning a comeback, but voters overwhelmingly don’t want her to make another White House run in 2024.
The 2022 midterm elections are now less than four months away, and Republicans have a 10-point lead in their bid to recapture control of Congress.
Today’s Key Takeaways: BlackRock CEO highlights AKLNG! Wood Mac sees Alaska’s North Slope as “disadvantaged.” Pogo trend of increased gold production, lower costs continues. Biden hits pause on climate emergency declaration.
NEWS OF THE DAY:
Larry Fink, CEO of BlackRock on Alaska, pipelines, LNG, and energy security
The CEO of BlackRock, one of the world’s largest asset managers, was on CNBC recently talking about energy security, climate change, and the need for innovative energy infrastructure projects.
What was most notable to Headlamp were Larry Fink’s comments specifically about the importance of LNG pipelines in Alaska and the opportunity our state has in continuing to supply allies around the world with long-term and secure clean energy.
While a short reference, The Headlamp team can’t remember the last time someone on Wall Street said something so direct and helpful about pipelines in Alaska.
Fink also said that BlackRock is already major investor in Alaska: including, as we recently learned, as the largest shareholder in Northrim Bank, an investor in Hecla Mines, along with a major and growing investment in Conoco Phillips, among others.
Here’s a clip of the interview highlighting his comments on LNG, Alaska, and the American opportunity to provide energy security for a number of allies around the world:
Larry Fink, CEO of BlackRock, explained how the climate crisis is changing valuations of certain countries and what needs to be done to respond pic.twitter.com/IGyAJPP9LL
Oil fields of the future will need renewables, carbon capture
US Gulf Coast, other regions set to be ‘super basins’: Wood Mac
The world’s oil map is being redrawn as the industry becomes increasingly intertwined with renewables, according to consultancy Wood Mackenzie Ltd.
Oil majors that want to reduce their carbon footprint will have to shift their activities to energy basins where drilling rigs can be powered by renewables and which have ample space for carbon sequestration, said Andrew Latham, vice president at Wood Mackenzie, in a new report.
The shift will mean that several oil and gas fields that dominate the energy landscape today — from Alaska’s North Slope to Russia’s Yamal Peninsula and Venezuela’s Orinoco Belt — will be disadvantaged and face a flight of capital in the future. Such places have limited infrastructure to develop renewables at scale.
Northern Star Resources Ltd. July 20 reported that the trend of increased gold production and lower costs is continuing at its Pogo Mine in Alaska.
During the second quarter of 2022, Pogo produced 70,792 ounces of gold from 322,290 metric tons of ore averaging 7.7 grams per metric ton gold. This marks a 23% increase over the 57,489 oz of gold produced and 24% increase over the 260,508 metric tons of ore milled during the first quarter of this year.
With gold production climbing, the cost per oz of gold sold at Pogo has dropped significantly.
The all-in sustaining cost per oz of Pogo gold sold during the June quarter was US$1,184, which is a 20% drop over the US$1,483/oz gold sold during the first quarter of this year.
The quarterly gold production puts Pogo nearly to the level of attaining the 300,000-oz-per-year production rate that Northern Star hoped to achieve upon the recent completion of a major expansion at the Alaska mine.
Hours after Senator Joe Manchin delivered a fatal blow to climate change legislation championed by Joe Biden, White House officials began making plans for the president to take matters into his own hands.
They wanted to act fast. Heading into the weekend, news of historic heat waves scorching cities from Phoenix to London seemed to underscore the urgency of the climate threat. And they had the perfect stage to announce bold action: In a few days, Biden would deliver a speech on clean energy in front of a shuttered Massachusetts coal plant.
His aides worked feverishly on a plan to show he was aggressively, and unilaterally, attacking climate change. They drafted a menu of options, including an emergency proclamation that would unlock sweeping executive powers allowing Biden to potentially block crude exports, fund clean energy construction and curtail offshore oil drilling.
Then, before the speech, Biden himself hit pause. There would be no emergency proclamation — not yet. He sent the aides back to the drawing board, where they remain, trying to chart an ambitious path forward that will not only pass legal muster but yield measurable results for voters, all while delicately handling Senate politics.
The new campaign will unfold over the next few weeks, with policy initiatives likely touching manufacturing, transportation, and other sectors. An emergency proclamation is still likely. But the frenzied effort to get there — recounted by multiple people familiar with the deliberations — suggests that the White House is struggling to work around the narrowly divided Congress, even as it seeks to move independently.
While the administration spent months amassing a suite of possible policies to deploy in case congressional talks collapsed, those were far from ready.
After Manchin’s move, aides began drafting an order that would trigger immediate interventions and honed ideas for actions the president and federal agencies could swiftly take. Some agency officials were enlisted to help build out the policy plans, people familiar with the matter said.
White House National Climate Advisor Gina McCarthy canceled her travel plans and stayed in D.C., where she presented the plans to White House Chief of Staff Ron Klain and Deputy Chief of Staff Bruce Reed.
By late Monday, some officials were preparing for a possible midweek climate emergency declaration, though no decision had been made, two people familiar with the matter said.
By midday Tuesday, the strategy had shifted.
Biden had pressed aides to move rapidly — putting actions on the table that could be delivered in short order. But he stressed that the plans needed to be fully fleshed out and made as robust as possible. On Wednesday, Biden acknowledged that tension. “I’m running the traps on the totality of the authority I have,” he told reporters.
There were political considerations, too, although they weren’t deciding factors in postponing an emergency declaration, people familiar said.
There were discussions, for example, about the timing of a climate proclamation — which could upset work in Congress on health care legislation, people familiar said. Senate dynamics were a part of the calculus, said one administration official who asked not to be named describing the deliberations. Despite Manchin’s withdrawal of support for the climate package, the White House does not want to alienate him — a moderate Democrat from coal- and gas-rich West Virginia whose vote is critical to pass key legislation in the Senate.
At the same time, the menu of possible policy announcements for Biden’s speech was also being narrowed down. Roughly a half dozen iterations of the portfolio were considered between Sunday and Tuesday evening as aides tried to balance what was immediately actionable with the risks of appearing to be doing too little, people familiar said.
Domestic mine permitting takes 5X longer in America than it does in countries with similar environmental standards. Learn other mining facts here: https://t.co/IOSsazIJCipic.twitter.com/GkankZ7eXV
Pursuers of the green agenda impede human endeavor while doing next to nothing to affect global temperatures.
Without a doubt, the climate-obsessed green movement is the most stupidly self-destructive force in the world today, leaving a trail of irrationality and folly wherever it goes.
Consider its recent record of destroying the country of Sri Lanka, making Western Europe needlessly vulnerable to Vladimir Putin’s energy blackmail, and stoking higher energy prices in the U.S. that have contributed to the fastest decline in real wages in 40 years.
The greens are rapidly making up ground on the socialists as the modern world’s foremost economic and social saboteurs (and, of course, the two now work hand in hand).
If a hostile actor were to consider the best way to harm a society from within, it would unquestionably be to increase the sway of climate alarmists and other environmentalists who believe it is their righteous duty to make it harder and more expensive to power a modern economy, as well as to build and grow things.
They seek to throw the gears into reverse on the millennia-long human quest for cheaper, more abundant, and more reliable sources of energy, while putting new obstacles in the way of other human endeavor.
Since they are fired by a quasi-religious vision of an existential climate crisis on the verge of ending Planet Earth, they reject cost–benefit analysis, not to mention basic realism. The resulting wreckage is all around us.
Sri Lanka achieved one of the highest ESG, or environmental, social, and governance, scores in the world and destroyed its economy in the process. The country banned chemical fertilizers in April 2021 as it hurtled toward becoming the world’s first all-organic country. It proved one small step ahead for environmental pieties and a giant leap backward for Sri Lankan farmers. A large proportion of land went dormant, and production of rice, tea, and other crops dropped precipitously. The resulting economic calamity has led to the collapse of the government.
This is basically the Green New Deal in miniature.
Sri Lanka is a small island nation in the Indian Ocean; Germany is a powerhouse in the middle of continental Europe. But the green disease doesn’t discriminate on the basis of size or wealth.
For years, Germany pursued a policy of making itself dependent on Russian oil and (especially) gas, while congratulating itself on its great environmental virtue as it closed down nuclear power plants and ramped up renewable sources. Berlin can’t say it wasn’t warned of the risks of this approach. Such is the faddish grip of climate orthodoxy that it blew past all the blinking red lights. Sure enough, now Russia may well cut off the supply of gas this winter, at the same time that renewables have proved not ready for prime time (they are too intermittent, among other technical problems that won’t be solved anytime soon).
In its wisdom, Germany decided to shut down the source of energy that is clean, reliable, and doesn’t require dependence on an authoritarian state hostile to the West — namely, nuclear power. It fell prey to the environmental Left’s superstitious hostility to nuclear. Even now, Germany is going ahead with shuttering its last three plants. It is turning again to coal to try to fill the gap this winter, underlining its disastrous mistake in prematurely eschewing such proven sources of energy in the first place.
Here in the U.S., of course, Biden pledged to “end fossil fuel” back in 2019, a promise — given our prodigious reserves of oil, gas, and coal — that would make almost as much sense as Russia or Saudi Arabia pledging to do the same. Even as inflation, with energy prices leading the way, destroys Biden’s presidency, he and his supporters are determined to pursue a climate agenda that will drive up costs and create inefficiencies at home while doing next to nothing to affect global temperatures.
It makes no sense, but for the greens, that’s never been a particularly important criterion.
"The best thing for job growth, inflation, geopolitics and climate, then, would be to reduce the costs of renewable-energy inputs. Instead, Democrats repeatedly choose to do the opposite."
