Today’s Key Takeaways: Senate wants U.S. to lead in development and export of nuclear technologies. Which generation is in demand for oil and gas industry? Natural gas is a solid investment for years to come. Biden delays access to U.S. critical mineral mines – again. Debt bill’s energy provisions are a “BFD”.
NEWS OF THE DAY:
BIPARTISAN SENATE MOVES ON NUCLEAR: The Environment and Public Works Committee wants to make the U.S. the leading global developer and exporter of advanced nuclear reactor technologies, passing this morning the bipartisan ADVANCE Act to generate more civil nuclear diplomacy around the world.
What’s in the bill: A big emphasis on exports. The bill directs the Nuclear Regulatory Commission to “coordinate” all its work on nuclear reactor import and export licensing and to involve itself more in the development of civil nuclear programs and standards in other countries.
It would also create a new international initiative to be spearheaded by the Energy and Commerce Departments to “modernize civil nuclear outreach to embarking civil nuclear energy nations.”
Nuclear at home: The legislation enables the Appalachian Regional Commission to make grants to support construction of nuclear power plants at the sites of former coal plants. West Virginia opened the door to this last year by lifting a ban on nuclear plant construction.
The bill also authorizes the chairman of the NRC to appoint dozens of highly specialized staff, including reactor engineers, structural engineers, and physicists, to support NRC work and ensure that licensing work be done swiftly.
Big themes: Congress and the Biden administration are intent on outcompeting Russia for influence in global energy markets, as expressed recently by Ambassador to Japan Rahm Emanuel. They also want to beat out the Chinese on the development and manufacture of advanced energy technologies.
The motivation is the same with this nuclear bill, as heavy hitters such as Saudi Arabia dip their toes into nuclear power: “If we as a country can become the chief technology, the chief developer, the chief innovator, of the smaller, modular reactors, we can lead the world,” Ranking Member Shelley Moore Capito, lead sponsor of the bill, said this morning.
Some Markey-d opposition: Capito’s bill has wide support. Sens. Sheldon Whitehouse and Cory Booker, and EPW Chairman Tom Carper all cosponsored it, as did a handful of Republicans. The bill passed out of committee in a 16-3 vote.
Sens. Ed Markey, Jeff Merkley, and Bernie Sanders opposed the legislation. Markey had the most to say, critiquing the bill for what he saw as an ill-advised expansion of the NRC’s mandate of ensuring nuclear safety.
Authorizing the commission to promote civil nuclear technology on a global stage would blur its role as the United States’s nuclear safety agency and make Congress into “nuclear Johnny Appleseeds.”
Which generation is most in demand in the oil and gas industry right now – Baby Boomers, Gen X, Millennials, or Gen Z?
The answer to that question is Millennials, Dave Mount, the President of Louisiana based OneSource Professional Search, outlined to Rigzone.
“They have work experience ranging from four to 18 years,” Mount told Rigzone.
“Many companies are experiencing the big crew change of Boomers retiring and are building their company/bench strength with these professionals,” he added.
Baby Boomers ranked second in a list of three Mount sent over. The OneSource Professional Search head said this generation offers “great industry experience” and “work ethic” and highlighted that they are in demand at smaller/leaner companies and mid-sized companies “needing seasoned leadership, mentorship, and knowledge transfer of newer less experienced employees”.
Gen Z ranked third and last in Mount’s list, with the OneSource President noting that most Gen Z workers are near entry level “and our firm doesn’t have high demand for near entry level search”.
“They are being hired through typical company college recruiting channels,” Mount said.
Sponsoring U.S. natural gas projects will be a solid bet for years to come as overseas demand grows, and as the fuel supports the energy transition, according to private equity (PE) investors.
The Biden administration paused finalizing an environmental impact statement for a copper mine in Arizona in order to meet with opposing tribes and review the Forest Service’s consultation, and it is delaying a decision about whether to allow Alaska to build a 211-mile road to a copper, cobalt and critical minerals mining area in the Brooks Range until 2024. Biden wants wind turbines, electric vehicles, medical equipment, and weapons that need increasing amounts of these critical minerals, but he does not want to anger environmentalists who do not want mining in this country. As a result, he delays opening these areas to mining, allowing the Chinese to gain even greater advantage in developing its industry and pushing the United States father away from developing a critical mining industry as it can take a decade or more to obtain the permits and develop a mine.
Arizona Resolution Copper Mine
An Environmental Impact Statement (EIS) that was to be produced this spring for the Resolution Copper mine in Arizona is now being delayed. The EIS would trigger the advancement of a congressionally approved land swap in Arizona–a 2,422-acre parcel known as Oak Flat, located east of Phoenix, to Resolution Copper Mining LLC. The land transfer is the result of an “act of Congress,” which authorized the deal as part of the 2014 National Defense Authorization Act to trade Oak Flat for other land in the state. The Apache Stronghold, a nonprofit that includes members of the San Carlos Apache Tribe, indicated that the trade of Oak Flat will stop Apaches from being able to access the site to exercise their religious beliefs. Resolution Copper is a joint venture of Anglo-Australian firms Rio Tinto and BHP.
The ore deposit lies nearly 7,000 feet below the earth’s surface and it represents one of the most significant untapped copper deposits today, with an estimated copper resource of 1.787 billion metric tons. The mine has the potential to supply nearly 25 percent of U.S. copper demand and will create several thousand direct and indirect jobs, with an economic value of several billion dollars over the estimated mine life. According to Mila Besich, the Democratic mayor of Superior, a town of 2,500 that abuts the mine site, “Every time there’s another delay to this process means that investors in our community may decide this isn’t the place to invest because the federal government can’t make up its mind.” Endless delays equate to denial of projects in the capital-intensive mining business.
The BLM is the lead federal agency developing an EIS under the National Environmental Policy Act (NEPA) to evaluate whether or not to grant a right-of-way for the proposed Ambler Road across BLM-managed lands. The U.S. Army Corps of Engineers (USACE) and the U.S. Coast Guard (USCG) are cooperating agencies helping to prepare the EIS. The proposed project would construct a new 211-mile roadway on the south side of the Brooks Range, extending west from the Dalton Highway to the south bank of the Ambler River. The road would be open only to mining-related industrial use. Without access, the mineral assets associated with the Ambler Mining District would likely remain stranded.
The debt ceiling deal is a monument to the messiness of a divided government — and it might cast a shadow over climate politics in 2024.
Catch up fast: The tentative compromise between the White House and GOP leaders includes…
Approval of the Mountain Valley Pipeline, a major gas project in Virginia and West Virginia.
Efforts to speed permitting via new deadlines for environmental analysis under the National Environmental Policy Act, and some other changes.
A new study of boosting regional power transmission capabilities.
State of play: Groups on the left and allied Democratic lawmakers are furious over MVP, and what some activists call weakening of NEPA.
The Sierra Club called for rejection, while the Center for Biological Diversity’s Jean Su said President Biden made a “colossal error” on climate.
Others had softer takes. Groups like the League of Conservation Voters, which have close ties to Democratic leaders, bashed the energy provisions but didn’t urge votes against the debt package.
What we’re watching: The political fallout.
It’s one of several times the White House has recently angered climate activists over fossil fuel projects or policy, notably the March approval of ConocoPhillips’ Willow oil project in Alaska.
Activists want a much harder line against fossil fuels. But it’s tough to know whether their disappointment will cost Biden more than a relative handful of climate-minded voters in 2024.
Also in the political mix: MVP is a win for Sen. Joe Manchin (D-W.Va.). He faces a tough race next year — if he runs — in his conservative state.
Officials emphasize it omits GOP proposals to revoke climate law incentives.
They say it preserves NEPA’s strength while making it easier to build climate-friendly infrastructure like wind and solar projects.
The American Clean Power Association blessed the deal, but called it only a “down payment” on permitting and transmission needs.
The other side: Republicans face challenges preventing too many defections among conservatives, who say the deal fails to meaningfully restrain spending.
House Speaker Kevin McCarthy’s wider pitch includes touting the “first significant reforms to the environmental review process in more than 40 years.”
The American Exploration and Production Council, an oil and gas industry group, urged passage, too, praising the NEPA and MVP provisions.
What’s next: Votes in Congress are expected this week as the clock ticks toward the June 5 default date.
Further down the road, there could be efforts to reach a more sweeping deal on energy permitting.
But the hurdles are high when there’s no forcing mechanism like, say, the threat of an economically catastrophic default.
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Today’s Key Takeaways: Supply chain issues slow clean energy installations. Oil slides on debt ceiling and OPEC worries. 2022 Memorial Day gas demand lower than 2021. AI exploring for minerals? Permitting reforms included in debt ceiling deal.
Clean energy is still the country’s dominant new source of power, but the slowdown is concerning since climate goals demand record installations every year.
For the U.S. energy transition, 2022 was a year that contained multitudes.
On the one hand, the country passed a historic climate law that has already spurred billions in clean energy investment and inspired copycats around the world. On the other hand, U.S. utility-scale clean energy installations dropped for the first time in five years — a worrisome development when the world must set a new record for clean energy deployment every year to meet climate goals.
In 2022, the U.S. installed nearly 26 gigawatts of utility-scale wind, solar and battery storage capacity, according to a new report from American Clean Power, a trade group. That’s down about 15 percent from 2021’s record-setting total of 30 GW, making last year the third-best year for clean energy deployment in the U.S.
The slowdown was the result of a tangle of familiar challenges, including supply-chain bottlenecks, interconnection queues and permitting delays, per ACP. Solar deployment was also hampered by last spring’s solar tariff kerfuffle, which temporarily ground the industry to a halt.
Republicans speak out against US debt-ceiling deal
Saudi warns speculators of more pain as OPEC+ meeting looms
Russia leaning towards leaving oil output unchanged -sources
NEW YORK, May 30 (Reuters) – Oil prices fell by about 4% on Tuesday on concerns about whether the U.S. Congress will pass the U.S. debt ceiling pact and as mixed messages from major producers clouded the supply outlook ahead of the OPEC+ meeting this weekend.
Brent crude futures fell $3.09, or 4%, to $73.98 a barrel by 11:03 a.m. EDT (1503 GMT). U.S. West Texas Intermediate (WTI) crude was down $2.84, or 3.9%, from Friday’s close, to $69.83 a barrel. There was no settlement on Monday because of a U.S. public holiday.
U.S. gasoline demand over the Memorial Day weekend is estimated to be 1.1% lower than demand for the same weekend last year, despite the surging gas prices at the start of the driving season in 2022, data from fuel-saving app GasBuddy showed early on Tuesday.
“According to GasBuddy data, US gasoline demand over the Memorial Day weekend (Thur-Mon) so far is down 1.1% from 2022. Once Tuesday is complete, we’ll add it to see the total weekend,” GasBuddy’s head of petroleum analysis, Patrick De Haan, said.
On Memorial Day on Monday, gasoline demand in the United States was down by 3.6% compared to Memorial Day 2022, according to GasBuddy data, De Haan noted.
Researchers at the Carnegie Institution for Science and other universities and organizations across the US have developed a machine learning model that can predict the locations of minerals on earth—and potentially other planets—by taking advantage of patterns in mineral associations.
In a paper published in the journal PNAS Nexus, the scientists explain that, for a long time, finding occurrences of specific minerals has been both an art and a science, as the task relies on individual experience, along with a healthy dose of luck.
Their tool, however, uses data from the Mineral Evolution Database, which includes 295,583 mineral localities of 5,478 mineral species, to predict previously unknown occurrences based on association rules. The authors tested their model by exploring the Tecopa basin in the Mojave Desert, a well-known Mars analog environment.
“Mineral association analysis quantifies high-dimensional multi-correlations in mineral localities across the globe, enabling the identification of previously unknown mineral occurrences, as well as mineral assemblages and their associated paragenetic modes,” the article reads.
The deal between House Republicans and the White House to raise the debt ceiling includes changes to environmental permitting for energy projects, according to people familiar with the details.
Speaker Kevin McCarthy (R-Calif.), in remarks from the Capitol, said negotiators would finish writing the legislation by Sunday for a House vote Wednesday.
“I believe this is an agreement in principle that’s worthy of the American people,” said McCarthy. “It has historic reductions in spending, consequential reforms and will lift people out of poverty into the workforce, rein in government overreach.”
McCarthy did not provide details about the agreement, but people familiar with the provisions, who spoke on condition of anonymity, said the language includes review timelines and a lead agency charged with shepherding a project’s environmental review.
The deal includes a one-year deadline for producing environmental impact assessments and a two-year maximum for environmental impact statements. The legislation would also expand an existing program to expedite federal permitting for infrastructure projects.
The bipartisan agreement includes language to ease transmission deployment and address storage for renewable energy development, but the particulars remain under wraps.
It was unclear until Saturday evening whether any permitting changes would make the deal. One person familiar with the discussions said Sen. Kyrsten Sinema (I-Ariz.) got involved in the issue.
Both sides of the aisle are now looking to convince their members to vote on the legislation. Many lawmakers on both the right and left are unlikely to approve.
McCarthy, who held a conference call with House Republicans after his remarks, is looking to sell the deal as forcing Democrats into making tough concessions.
Democrats, for their part, are circulating talking points about the White House not giving in on judicial reviews for energy projects and protecting key portions of the National Environmental Policy Act and other landmark laws.
The deal would raise the debt ceiling into 2024. It would mean roughly flat spending for the next fiscal year.
“The agreement represents a compromise, which means not everyone gets what they want,” said President Joe Biden in a statement. “That’s the responsibility of governing.”
As we remember and honor those who made the ultimate sacrifice for America, we share a portion of the first Memorial Day Address, from May 30, 1868. It was given by General James Garfield, then 36 years old, as he memorialized those Union soldiers interred at the National Cemetery in Arlington, Virginia.
“I am oppressed with a sense of the impropriety of uttering words on this occasion. If silence is ever golden, it must be here beside the graves of the 15,000 men whose lives were more significant than speech and whose death was a poem, the music of which can never be sung.
“We do not know one promise these men made, one pledge they gave, one word they spoke; but we do know they summed up and perfected, by one supreme act, the highest virtues of men and citizens. For love of country they accepted death, and thus resolved all doubts and made immortal their patriotism and their virtue.
“What other spot so fitting for their last resting place as this, under the shadow of the Capital saved by their valor?
“Here, where the grim edge of battle joined; here, where all the hope and fear and agony of their country centered; here let them rest, asleep on the nation’s heart, entombed in the nation’s love.”
Alaska gold explorer Contango ORE (NYSE American: CTGO) has completed a technical report summary on the Manh Choh project, confirming the results of the feasibility study (FS) and subsequent updates prepared by KG Mining (Alaska), its joint venture partner and an indirect subsidiary of Kinross Gold.
Contango has a 30% interest in the JV, which is leasing approximately 675,000 acres of exploration and development from the Tetlin Tribe through future production royalties. The lease is also subject to a 3% net smelter royalty in favor of Royal Gold, the JV’s former partner prior to Kinross.
Commenting on the technical report summary, CEO Rick Van Nieuwenhuyse said: “The results of the report are consistent with prior guidance including the estimated all-in sustaining cost (AISC) of $1,116 per gold equivalent ounce and the initial capital costs of $64.6 million for Contango’s 30% portion.”
The Manh Choh project is represented by the Peak gold deposit, located in the northern part of the Tetlin lease. A well-defined skarn-type mineral deposit contains 1.3 million ounces of measured and indicated resources averaging 4 g/t gold.
In June 2022, Contango announced that a construction decision was made by the Kinross board after the Manh Choh project FS was released ahead of schedule. The FS outlined a plan to batch process the high-grade ore of approximately 8 g/t through Kinross’ Fort Knox mill.
By utilizing the existing facilities at Fort Knox, the Manh Choh project could proceed without having to permit, capitalize, and construct a mill or tailings facilities, the FS report showed. The project has received the federal permits needed for road construction, and early work construction is already underway.
Earlier this year, Contango arranged a $70 million senior secured loan facility to fund its portion of the pre-production construction and operating expenditures for the JV.
Based on Kinross’ updated resource model, Contango would have an initial reserve of approximately 300,000 ounces gold and over half a million ounces of silver, net its 30% ownership.
Production is expected to commence at Manh Choh in the second half of 2024, with a mine plan that consists of two small open pits that will be mined concurrently over 4.5 years.
"I think everybody does, in their heart, know that #gold is the ultimate currency and what will eventually win out." – Rick Van Nieuwenhuyse, President and CEO of $CTGO.
Supreme Court weakens EPA power to enforce Clean Water Act Ann E. Mari mow, Timothy Puko, Robert Barnes, The Washington Post, May 25, 2023 Justice Samuel A. Alito, writing for the majority in the 5 to 4 opinion, said the EPA’s interpretation went too far.
At issue was the reach of the landmark, 51-year-old Clean Water Act and how courts should determine what count as “waters of the United States” under protection of the law. Nearly two decades ago, the court ruled that wetlands are protected by the Clean Water Act if they have a “significant nexus” to regulated waters. Property rights and business groups wanted to narrow regulations to wetlands and other areas directly connected to “navigable waters” such as rivers and lakes.
But Justice Samuel A. Alito, writing for the majority in the 5 to 4 opinion, said the EPA’s interpretation of its powers went too far.
“We hold that the CWA extends to only those wetlands with a continuous surface connection to bodies that are ‘waters of the United States’ in their own right, so that they are ‘indistinguishable’ from those waters,” Alito wrote, quoting from past court opinions.
Justice Elena Kagan wrote for the court’s liberals, comparing the ruling to last term’s decision limiting the EPA’s ability to combat climate change.
“The vice in both instances is the same: the Court’s appointment of itself as the national decision-maker on environmental policy,” she wrote, joined by Justice Sonia Sotomayor and Ketanji Brown Jackson.
Justice Brett M. Kavanaugh wrote separately to object to the majority’s reading of the law.He wrote that the majority’s new test “departs from the statutory text, from 45 years of consistent agency practice, and from this Court’s precedents” and will have “significant repercussions for water quality and flood control throughout the United States.” Kagan, Sotomayor and Jackson joined Kavanaugh.
All of the justices thought the lower court got it wrong regarding the couple who brought the case.
The justices were reviewing for a second time the plans of Michael and Chantell Sackett, who want to build a home on their property near Priest Lake, one of the Idaho’s largest. The EPA says there are wetlands on the couple’s 0.63-acre lot, which makes it subject to the Clean Water Act and allows the government to require permits and impose penalties for violations.
Environmental advocates asked the court to retain the government’s authority to protect and regulate waterways that significantly affect downstream water quality and warned that developers would take advantage of weaker regulations. Under the Sacketts’ proposed definition of the law, they said, about half of all wetlands and roughly 60 percent of streams would no longer be federally protected.
The Sacketts, backed by the conservative Pacific Legal Foundation, obtained a local building permit 15 years ago to begin construction on their land, about 300 feet from the lake. Their plot is bounded on two sides by roads and separated from the lake by a row of homes.
The EPA put the plans on hold, threatening fines of more than $40,000 per day if the Sacketts did not stop construction. The couple went to court to block the EPA order and asked the justices to narrow the definition of “waters of the United States” so that their land is not covered by the Clean Water Act.
The Biden administration and environmental groups have argued for preserving broader federal authority over such matters. Narrowing the reach of the law would undermine the government’s ability to protect wetlands that, for instance, are separated from a river by a small dune but still affect that river’s chemical, physical and biological integrity.
Four presidential administrations have now been mired in the fight over what constitutes a wetland. The George W. Bush administration first issued guidance limiting the reach of the Clean Water Act in 2003 and 2008, after earlier Supreme Court decisions.
In 2015 the Obama administration widened the scope of the law to cover even ephemeral streams and ponds. North Dakota, Wyoming, Alaska and other states immediately sued in federal court, resulting in a nationwide stay from a federal appeals court in Ohio. As the challenges dragged on and led to a slew of different rulings, the Trump-era EPA repealed the rule and in 2019 created a new, weaker rule.
The Biden administration has tried to strike a balance by undoing the Trump-era rule and redefining EPA oversight as covering “traditional navigable waters,” including interstate waterways and upstream water sources that influence the health and quality of those waterways. The definition is based on a legal framework established before 2015 — attempting to avoid going as far as the Obama-era rule — with adjustments based on court rulings and newer science, the EPA has said.
Attorney Rafe Petersen, who represents miners, offshore wind developers and others seeking EPA permits, said the court decisions and rule changes over the years have made the water rules some of the most difficult for businesses to deal with.
A court decision against the EPA, he added, likely leaves the Biden administration to start all over again from scratch.
“I don’t see how they get away from that,” Petersen said. “The Biden administration is really boxed into the corner.”
The case is Sackett v. Environmental Protection Agency
