EVs aren’t a sure-fire climate change solution, says one Harvard Law School researcher.
Shortly after his inauguration in 2021, President Joe Biden issued an executive order committing the United States to achieving net-zero emissions across the economy by 2050. With the transportation sector responsible for the largest share of greenhouse gas emissions in the U.S., tackling gas-powered automobiles would seem like a natural goal for the Biden administration. Indeed, as part of the Inflation Reduction Act of 2022, or IRA, Congress and the administration approved new and continued subsidies for electric vehicles, in the hopes of both keeping production onshore and making EVs more attractive to consumers.
But what seemed like simple solutions may not be, says Ashley Nunes, a senior research associate at Harvard Law School’s Center for Labor and a Just Economy. Nunes, who studies how innovation impacts markets, says that while some government policies have increased adoption of EVs, they aren’t always targeted equitably or effectively. In fact, as his research suggests, they can sometimes make the problem worse.
So how can the administration — and other national leaders — better reduce emissions from transportation? In an interview with Harvard Law Today, Nunes explains the Biden administration’s policies on EVs, what it’s getting right and wrong, and changes he says could lead to an even greater reduction in overall emissions.
Harvard Law Today: How did the Inflation Reduction Act impact the market for new electric vehicles?
Ashley Nunes: In my view, the Inflation Reduction Act changes little for consumers. What we are now calling the Clean Vehicle Motor Credit is still $7,500 — that’s the same amount that has existed for the better part of over 10 years before the bill. The difference is that previously, it was designed as a tax credit, which primarily benefited wealthy people. The Congressional Research Service estimated that nearly 80 percent of the total value of these credits was claimed by households that made over $100,000 a year.
The IRA did a few things, the most beneficial of which for middle- and low-income Americans was to effectively turn the credit into a rebate. It’s still structured as a credit, but what happens now is that when you go in to buy the car, it is turned into a rebate for the consumer at the point of sale. The credit essentially moved from the consumer to the dealership, which can now claim the credit. So as far as the consumer is concerned, if I buy an electric vehicle, I’m getting $7,500 off. That’s the good news, and I’ve been a huge proponent of that change. I think it’s really important to offer point of sale incentives for technology to go mainstream.
HLT: So, what’s the bad news?
Nunes: One problem with IRA, at least for electric cars, is that you now have requirements for the critical minerals needed to produce the cars, and this is a thorn in the side of people trying to spur widespread adoption. There are three main parts stemming from the law. The first is that the vehicle has to be assembled in North America, which is easy enough to meet. The larger problem is that what the bill effectively says is that as time goes on, half the credit, which is about $3,750, can be claimed if at least a certain percentage of the critical minerals that are used in the batteries come from the United States or a country that we are friendly with. The other half of the credit is pegged to the value of the battery components coming from the United States or a friendly country. And this is problematic, at least in the short term, because currently our batteries are constructed, and the minerals are processed, in China in large part. Reading these provisions as they are currently written suggests the intended goal is less about EV adoption and more about lessening our dependence on China. This makes IRA less of a climate bill and more of an energy security bill.
“Reading [the Inflation Reduction Act] provisions as they are currently written suggests the intended goal is less about EV adoption and more about lessening our dependence on China. This makes IRA less of a climate bill and more of an energy security bill.”
HLT: Are there other ways in which the Biden administration is trying to influence the adoption of electric vehicles? How successful do you think those efforts have been?
Nunes: The most recent piece of regulatory policy that we have seen related to EVs is the tailpipe emission standard that was proposed by the Environmental Protection Agency in April. The standard effectively says that the overall fleet produced by each automaker must have an average tailpipe emission of 82 grams of carbon dioxide per mile. An EV counts as zero. So, the more EVs you sell, the lower your average tailpipe emissions will be. This proposal is going to go to court, and will be the subject of many, many court battles. You can bet on it.
That’s because many people rightly argue that it is de facto means of spurring EV adoption. What they are saying – and we’ve done the modeling to show this — is that you need to have 60 to 62% of your fleet of sales be electric cars in order to comply with the standard. If you don’t have that, it’s going to be very difficult to comply with the standard. The administration won’t say the rule is designed to get manufacturers to sell EVs. The president and his allies want to appear to be impartial to specific decarbonization strategies. But widespread EV adoption is really what the president — and this proposal – aims to do.
HLT: In your view, what is the administration doing right? And where is it getting things wrong?
Nunes: It’s refreshing to see an administration that takes the threat posed by climate change seriously. If you look at the Inflation Reduction Act, for example, one of the things I think people should be very heartened by is a $4,000 credit that is available for purchasing secondhand electric cars on the market. We actually published a study about this. I think that’s something the administration and Congress in general should be commended for.
IRA also offers a production credit to manufacturers, though whether this will translate into lower prices for consumers remains unclear. Last year in the United States, we sold over 750,000 electric cars. That’s about a tenfold increase from a decade or so ago. But during that time, the price of EVs has actually gone up. So, I think the administration and Congress need to think more carefully about price points of technology and how these price points change. There is an argument that prices for technology decline over time — and they can, as happened with cell phones — but what’s true of one industry is not necessarily true of all. This is particularly relevant because this administration has set very aggressive targets for emissions reductions. A recent study showed that one out of every two Americans is seriously considering buying an electric car, yet only 750,000 out of close to 17 million cars sold last year were EVs. You can do the math — you’d expect to see 8 million electric cars sold, but something is holding people back. Price is arguably the most important reason why. Legislators need to address that in a way that makes sense. And current subsidies aren’t the answer. Knocking $7,500 off a $60,000 car matters little to middle and low income household because $52,500 is far more than these households ever could — or would — spend on a car.
“A recent study showed that one out of every two Americans is seriously considering buying an electric car, yet only 750,000 out of close to 17 million cars sold last year were EVs … Price is arguably [holding people back].”
HLT: What do you make of California’s ban on the sale of gas-powered vehicles beginning in 2035? And what do you think that impact will be?
#Oil & natural #gas are, by far, the key #energy sources in powering modern existence — and both are produced safely right here in America, supporting 10.8 million jobs! Washington must enact policies that encourage new investment in US energy leadership. https://t.co/aKB1heteLf
Today’s Key Takeaways: 151 executives predict where oil prices will end in 2023. ConocoPhillips on energy transition, net-zero emissions. More on AK importing LNG. Message to mining regulators – “we are urgently off course.” Auto makers to EPA – new vehicle emissions target isn’t “reasonable or achievable.”
Executives from 151 oil and gas firms have predicted where the West Texas Intermediate (WTI) price will end up this year as part of the latest Dallas Fed Energy Survey.
When asked in the second quarter survey what they expected the WTI crude oil price to be at the end of 2023, the average survey response was $77.48 per barrel. The low forecast in the survey came in at $60 per barrel, while the high forecast came in at $100 per barrel. The price of WTI during the survey was $69.89 per barrel, the survey highlighted.
In the previous first quarter Dallas Fed Energy Survey, which was released back in April, the average survey response to the same question, from executives from 145 oil and gas firms, was $79.64 per barrel. The low forecast in that survey was $50 per barrel and the high forecast came in at $160 per barrel. The WTI price during that survey was $68.51 per barrel, the first quarter Dallas Fed Energy Survey pointed out.
Superindie talks to Carbon Economist about the energy landscape.
ConocoPhillips is an official sponsor of the 24th World Petroleum Congress (WPC), which will take place from 17–21 September in Calgary, Canada. Here, Bij Agarwal, president of ConocoPhillips Canada, talks to Carbon Economist about the energy landscape as he sees it.
The theme of this year’s WPC is ‘transition’. Can you talk about what ConocoPhillips is doing on this front, in terms of scope one and scope two emissions?
Agarwal: ConocoPhillips’ ‘triple mandate’ is focused on meeting the energy transition pathway demand, delivering competitive returns, and achieving our net-zero operational emissions ambition by 2050. In 2021, we established a Low Carbon Technologies team to support our net-zero ambition, and in 2022, we published our Plan for Net-Zero Energy Transition. In April 2023, we announced an acceleration of our operational greenhouse gas (GHG) emissions-intensity reduction target for 2030 from 40–50pc to 50–60pc, using a 2016 baseline.
We have reduced our methane emissions intensity by approximately 70pc since 2015 and have exceeded our 2025 methane intensity reduction goal of 10pc, achieving a 13pc reduction in 2021 from a 2019 baseline. We set a new medium-term target to achieve a near-zero methane emissions intensity by 2030, and in 2022, based on flaring reductions to date, we committed to achieving zero routine flaring by 2025—five years in advance of the World Bank Initiative’s goal of 2030.
How important are individual and collective reduction targets for oil and gas producers as they approach the transition?
Agarwal: We believe that individual and collective emissions reduction targets—near, medium, and long term—will help to keep companies and countries on track as we pursue our net-zero operational emissions by 2050 ambitions. We continue to position ConocoPhillips for the energy transition and are committed to reducing operational (scope one and two) emissions, over which we have ownership and control.
How is the renewed global focus on energy security changing the strategic thinking of firms involved in energy supply?
Agarwal: We believe North America is strongly positioned to continue serving as a stabilising force that strengthens global energy security. However, we need a regulatory atmosphere that promotes investment and the unrestricted trade of natural gas, crude oil and refined products between the US, Canada, and Mexico, as well as exports to the world market. This complementary market integration will support North America’s continued economic prosperity, security, and global energy leadership as we work to achieve the energy transition.
We focus on remaining resilient and competitive in any scenario by safely and responsibly providing low-cost, low-GHG-intensity oil barrels and natural gas molecules by asset type with continuously improving ESG performance. Our strategy uses a fully burdened cost of supply, including cost of carbon, as the primary basis for capital allocation. Providing low cost of supply also addresses a key component of a just and orderly transition—a secure and affordable energy supply that strengthens global energy security.
Imported liquefied natural gas, or LNG, appears to be the best near-term option for averting a pending natural gas shortage in Southcentral Alaska, where most Alaskans live, according to a group of electric utilities including Matanuska Electric Association and Enstar Natural Gas, the state’s major gas utility.
The utilities briefed the Regulatory Commission of Alaska Wednesday, June 28, on preliminary results of a study on averting the gas shortfall.
In a report issued earlier this year the state Division of Oil and Gas said that gas produced in the Cook Inlet Basin of southern Alaska will begin falling short of annual demand by 2027. In 2022 Hilcorp Energy, the major Cook Inlet gas producer, told utilities it will not be able to renew current gas supply contracts as they expire because of declines in reserves.
Concern for the shortfall is acute because natural gas produced from Cook Inlet fields is almost sole source of fuel for space heating in the region as well as for most power generation.
“Importing liquefied natural gas is likely the least cost, easiest option for the near term,” said Arthur Miller, CEO of Chugach Electric Association, the state’s largest electric utility. Although results of the joint utility study were presented to the state regulators Chugach had conducted its own assessment with Black & Veatch, a consulting group, and found its findings “in alignment” with the group study, which was facilitated by Berkeley Research Group.
Chugach is also doing a detailed assessment of bringing on more power from renewable energy like wind, solar and hydro.
Tony Izzo, CEO of Matanuska Electric Association, said: “We expect natural gas to be a component of MEA’s energy mix as we transition towards our diversification goals and the results of this study will be helpful in assessing options with our fellow utilities and other stakeholders.”
Other utilities participating include Golden Valley Electric Association in Interior Alaska; and Homer Electric Association on the Kenai Peninsula south of Anchorage.
“Cook Inlet supplies begin to taper off as early as 2027, meaning ‘railbelt’ (Southcentral and Interior Alaska) gas users face little time to assess potential solutions and make decisions to meet the eventual gap,” the utilities said in a joint statement.
“Timing in a critical component of any selected project to avoid a shortfall. The (utilities’ working group additionally focused on reliability as a key factor to ensure the project predictably meets area needs for several years,” the statement said.
Regulators urgently need to fast track approvals for new mines and the renewable energy projects to power them to ensure the supply of minerals essential to averting climate change, gold miner Newcrest’s interim head said on Thursday.
“We are urgently off course, and we need to course correct immediately,” Sherry Duhe, interim CEO of Australia’s top gold miner and a former oil industry executive, told a mining conference in Brisbane.
The mining industry needs to bring online the equivalent of 17 more Escondidas, the world’s biggest copper mine, by 2050, to meet demand projections, she said as an example of the scale of the problem.
Other metals, such as nickel, cobalt, and lithium, used in batteries and wind turbines, are also urgently needed for the energy transition.
Miners need to step up development by an order of magnitude and governments need to slash regulatory timelines and beef up regulatory staffing, as regulation is becoming more complex, including duplicated rules, Duhe said.
“The next five to 10 years are critical,” she said.
“The alternative is terrifying.”
Newcrest is relying on a wind farm to supply 40% of its electricity needs for its Cadia gold mine in New South Wales state, but that power project development is struggling with regulatory time frames.
Shareholders in Newcrest, which has gold and copper projects in Australia, Canada, and Papua New Guinea, are due to vote later this year on a A$26.2 billion ($17.3 billion) takeover offer from Newmont Corp.
POLITICS:
AUTO GROUP MAKES CASE: A top U.S. automotive trade group is taking aim at the Biden administration’s new vehicle emissions targets, saying in a new memo that the proposal is “neither reasonable nor achievable” and risks limiting consumer choice, disadvantaging the auto industry, and triggering “substantial” price hikes for all types of vehicles.
In a draft memo, slated to be sent to the EPA July 5, the Alliance for Automotive Innovation outlined five of its top concerns with the EPA’s 2027-2032 vehicle emissions targets, which seek to cut emissions by 56% compared to the existing 2026 requirements.
AAI, which represents GM, Volkswagen, Hyundai, and others, called the proposal a “de facto battery electric vehicle mandate,” and pushed for the administration to make several key changes to its current proposal. Among them:
Don’t write off plug-in hybrids: AAI notes that the EPA’s expected emissions rules project that 60% of all new vehicle sales in 2030 will be battery electric vehicles (BEVs)—an amount that increases to 67% by 2032. That’s a sharp uptick from the 50% of EV sales by the end of the decade that the administration had targeted in 2021—a goal that crucially also included plug-in hybrid vehicles, which were taken out of the equation under the EPA’s new rules.
From the Washington Examiner, Daily on Energy, June 29, 2023
Joe Biden promised green energy would create 'millions of jobs.'
In reality, Ford just announced it will cut at least 1,000 jobs due to the cost of transitioning to green tech.
Today’s Key Takeaways: Climate advocates pushing net zero not making much progress – global demand for fossil fuels remains strong. Who hires in low oil & gas price environments? NASA: mining the moon within 10 years. Opinion: Republicans must embrace CCUS.
In 2022, fossil fuels accounted for 82 percent of global energy consumption, up 1 percent from 2021, as record renewable energy growth did not shift the dominance of fossil fuels, according to the UK-based Energy Institute, who, with consultancies KPMG and Kearney, put together what was BP’s statistical review of world energy since the 1950s. Renewable capacity increased by a record 266 gigawatts led by solar, greenhouse gas emissions increased by 0.8 percent reaching a new high of 39.3 billion metric tons of carbon dioxide equivalent, coal made up 35.4 percent of power generation, and renewables, including hydroelectric, accounted for about 7.5 percent of global energy consumption and 12 percent of global power generation, taking away from nuclear, which fell 4.4 percent, despite not emitting greenhouse gases.
Oil Production and Demand
Global oil consumption increased in 2022, rising by 2.9 million barrels per day to 97.3 million barrels per day, a smaller increase than was seen between 2020 and 2021, but remained 0.7 percent below 2019 pre-COVID levels. Most of the growth in oil consumption came from jet fuel and kerosene, which grew by 0.9 million barrels per day, and diesel, which grew by 0.7 million barrels per day. Diesel and gasoline made up over half of total global oil demand. Demand for gasoline in 2022 was similar to pre-pandemic levels, while demand for naphtha, diesel, fuel oil and other oil products were above their pre-pandemic levels. Although aviation-related oil demand exhibited the strongest pre-pandemic recovery relative to 2021, it remained more than 1.7 million barrels per day below 2019 levels. Regionally, OECD and non-OECD consumption increased by roughly same amount–1.4 million barrels per day for OECD consumption and 1.5 million barrels per day for non-OECD consumption, as China was in its zero COVID status, dampening its demand.
Global oil production increased by 3.8 million barrels per day in 2022, with OPEC+ accounting for more than 60 percent of the increase. Among all countries, Saudi Arabia (1,182,000 barrels per day) and the United States (1,091,000 barrels per day), saw the largest oil production increases. Nigeria reported the largest decline in production (184,000 barrels per day) with production in Libya declining by 181,000 barrels per day.
Refining capacity increased slightly by around 534,000 barrels per day in 2022 driven by an increase in capacity in non-OECD countries.
Oil prices rose by about 40 percent, with Brent oil ending the year averaging around $101 per barrel in 2022, its highest level since 2013.
Chad Spencer, the CEO of Houston headquartered Hazeltine Executive Search Partners (HESP), a member of the Sanford Rose Associates Network, has outlined which companies “tend to thrive and actively hire during low oil and gas price environments” in a statement sent to Rigzone.
Integrated oil businesses are one example, Spencer highlighted, dubbing them “a beacon of resilience”.
“Integrated oil companies, with their diversified operations spanning exploration, production, refining, and marketing, have consistently displayed resilience during challenging times,” Spencer told Rigzone.
“While cost-cutting measures may be implemented, these companies often prioritize strategic hiring in areas such as research and development, refining, and technological advancements,” he added.
“By investing in innovation and leveraging their long-term vision, integrated oil companies fortify their competitive advantage and position themselves for sustained growth even in low-price environments,” he continued.
National Oil Companies (NOC) were another example highlighted by Spencer, who noted that NOCs play a vital role in the oil and gas industry, “acting as stewards of their nation’s resources”.
“Despite the downturns, NOCs maintain a strategic focus on developing domestic reserves. Their hiring priorities typically revolve around critical roles related to field development, reservoir management, and infrastructure projects,” Spencer said.
“By nurturing and investing in local talent, NOCs ensure energy security and bolster economic stability, making them key players in times of industry volatility,” he added.
Spencer also flagged service companies as businesses that tend to thrive and actively hire during low price environments, describing them as “enablers of operational efficiency”.
“During low-price periods, exploration and production companies often seek cost-effective solutions to streamline their operations,” Spencer noted.
The US space agency (NASA) is looking to operate a pilot processing plant for lunar resources by 2032, as part of its planned Artemis missions, which will also take the first woman and first person of colour to the Earth’s natural satellite for the first time.
According to Gerald Sanders, a NASA scientist, the government body will initially look to quantify potential resources, including energy, water, and lunar soil, as a goal to attract commercial investment.
Exploring for minerals and metals, including iron ore and rare earths, as well as planning a trip to Mars will come later, Sanders told a mining conference in Australia.
NASA plans to build a permanent moon-orbiting base called Gateway, similar to the International Space Station (ISS). From there, the agency hopes to build a base on the lunar surface, where it can mine the resources required to fly the first astronauts to other planets.
The first customers are expected to be commercial rocket companies that could use the moon’s resources for refueling.
NASA will send a test drill to the Moon’s surface by the end of next week, with large-scale excavation activities scheduled for 2032.
No longer science fiction
After being considered mostly a science-fiction tale, governments have started implementing programs and legislation to join the race for space mining.
In 2015, former US President Barack Obama signed a law that grants US citizens rights to own resources mined in space. The ground-breaking rule was touted as a major boost to asteroid mining because it encourages the commercial exploration and utilization of resources from asteroids obtained by US firms.
Private initiatives to mine celestial bodies, including the Moon, have come, and gone in the last decade. Planetary Resources and Deep Space Industries were perhaps the most touted, but neither company arrived on any asteroids and were eventually acquired and rerouted to other endeavours.
Most recently, California-based AstroForge unveiled plans to test its own technique for refining platinum from a sample of asteroid-like material.
Louisiana is known for its vibrant energy sector and vast industrial infrastructure and is uniquely positioned to lead the charge in carbon capture utilization and storage (CCUS) technology implementation. As CEO of Canary LLC, a drilling and production company in the energy sector, I know this firsthand, and I am incredibly proud of the jobs, services, and people at our locations in Lafayette and Shreveport. By supporting CCUS projects, Republicans can continue to support the oil and gas industry, economic growth, and energy independence.
Investing in CCUS technology fosters energy security. Louisiana has an abundance of natural resources, particularly natural gas, which powers our state and nation. By developing carbon capture infrastructure, the state can reduce dependence on foreign energy sources, strengthening America’s energy independence in the process.
That’s why the upcoming Environmental Protection Agency (EPA) hearing in Baton Rouge is so important. The EPA is considering granting our state permanent primacy over new Class 6 CCUS projects. Having primacy would mean Louisiana can join other states, like Wyoming and North Dakota, that regulate and maintain new CCUS projects and use the technology to grow their economies and support jobs. It would also allow Louisiana to continue its over 40-year history of primacy of underground storage projects instead of leaving it to a government agency in Washington.
As Republicans, we need to support CCUS projects in Louisiana and ensure that the EPA grants us permanent primacy. Not only will we support the oil and gas industry – including our national security – but Louisiana has proven that the state can oversee these projects.
We must embrace CCUS projects because they will strengthen energy security, drive technological innovation, and create well-paying jobs. This is an opportunity for Republicans to take the lead on economic growth, cleaner energy, and sovereignty for our state.
Dan K. Eberhart is CEO of Canary oilfield services and Managing Director and founder of Eberhart Capital.
Today’s Key Takeaways: New BLM rule “sneaky, detrimental,” Saudi Aramco bullish on 2023 oil demand. New record set for U.S. LNG. Pebble gains more time. Offshore wind forecast scaled back – again.
NEWS OF THE DAY:
Proposed federal land conservation rule sneaky, detrimental Rachel Gable, Colorado Politics, June 26, 2023
The House Committee on Natural Resources’ hearing on H.R. 3397, sponsored by Rep. John Curtis (R-Utah) to require the Director of the Bureau of Land Management to withdraw the proposed conservation rule was tense. Tense also describes most conversations among cattlemen in states were permittees graze public lands, including this one. The BLM’s Conservation and Landscape Health proposed rule lacks the congressional oversight dictated by the Federal Land Policy Management Act (FLPMA). If the rule goes into effect, it will be the first time FLPMA would be rewritten without congressional action, exactly what the Act is designed to prevent.
FLPMA is the BLM’s “organic act” that establishes the agency’s multiple-use and sustained yield mandate to serve present and future generations. This proposed rule flies in the face of FLPMA by elevating conservation to a use and removing extraction — grazing, oil and gas, minerals, etc. — from public lands and thereby removing opportunity for sustainable yield from those lands.
Sigrid Johannes, director of the Public Lands Council, said the Conservation Land Use Rule is a major change to multiple use land management and one that would normally carry a 12-month scoping period with extensive opportunities for stakeholder engagement.
This rule has been rushed through a short comment period and only three public meetings have been held, none of which offered comments or questions from attendees. Further, the meetings were in Denver, Reno, and Albuquerque, far from the majority of permittees across the western states. This was glaring enough South Dakota Gov. Kristi Noem testified nearly 98% of BLM surface lands in South Dakota are grazed by permittees; her state hosts 76 actively producing oil and gas leases that cover 36,762 acres; and the acres managed by the BLM provide recreation opportunities. Noem said the proposed rule overemphasizes conservation rather than the economic needs of Americans; lacks an economic analysis, fails to provide data to indicated better outcomes for conservation practices if implemented; and the BLM claims the rule does not have a “significant economic effect” or that it does not affect “a significant amount of small entities,” a claim Noem called ridiculous.
Wyoming Gov. Mark Gordon said, “This proposed rule was rushed forward without material input from Wyoming or other states,” Gordon said. “It did not have the benefit of the views of impacted public land users. The proposed rule mischaracterizes conservation, seeks to preempt wildlife management from the States, and oversteps the Bureau’s statutory authority. The best solution is to rescind the rule.”
One of the major facts — not talking points, but facts — is that livestock grazing is conservation. Period. Well-managed grazing reduces invasive species, cultivates healthy rangelands, maintains wildlife habitat, serves as fire mitigation, and grazing on public lands is closely monitored.
Johannes said the title of the proposed rule is disingenuous, as the livestock community is certainly committed to conservation. One of the fears of the grazing community is “the BLM has created a system under their so-called conservation leasing system where it’s up to third parties to come in and say what they think is a use that is compatible with conservation.” There are gobs of anti-livestock and anti-agriculture groups licking their chops anticipating the chance to claim the cessation of grazing is the best conservation practice.
If public lands are placed in conservation leases, that could mean all multiple uses are precluded from that land. This includes hiking, photography, hunting, bird watching, and the like.
J.J. Goicoechea, former Nevada state veterinarian and current director of the Nevada Department of Agriculture said in a hearing the agency has failed to define what is considered a “compatible” use or an “incompatible” use with an underlying conservation lease.
“While the BLM has previously stated they believe grazing is a conservation tool, the rule contains no text that would make the industry confident that this rule is not targeted to remove grazing access. Further, the rule makes clear that uses like hunting, fishing, and recreation, when done with a commercial component — like outfitting, guiding, and other conservation activities — would not be defined as a “casual use” and could be precluded due to the presence of a conservation lease. In sum, the BLM has proposed a system that will be rife for abuse and litigation without consistent standards and application.”
Rife is right.
This rule is likely to spell disaster if users are forced off the land. From an agricultural standpoint, this could drive protein prices far above the reach of families on a budget and put families out of business. The process has been rushed, sneaky, and is a thinly veiled attempt to remove the uses the Biden administration finds unpleasant from public lands.
The PLC requested a 150-day extension of the comment period based on the scope of the rule. BLM announced a 15-day extension, with all public comment due prior to July 5.
OIL:
SAUDI ARAMCO SAYS CHINA AND INDIA WILL PROP UP OIL DEMAND IN 2023: The head of Saudi Arabia’s state-owned oil company said he remains bullish on oil demand projections for the rest of 2023, noting an expected uptick in demand from China and India in the second half of the year.
“We believe that oil market fundamentals remain generally sound for the rest of the year,” Saudi Aramco CEO Amin Nasser said in Malaysia today, according to CNBC. The assessment comes even as demand growth in China has remained below expectations, prompting several cuts to its key lending rates.
“Despite the recession risks in several OECD countries, the economies of developing countries, especially China and India, are driving oil demand growth of more than 2 million barrels per day this year,” Nasser added.
His assessments appear to bolster IEA projections that global oil demand will rise by 2.4 million bpd in 2023, outpacing 2022’s growth of 2.3 million bpd. In its report earlier this month, IEA cited Chinese demand as accounting for 60% of the gains.
The U.S. is set to add a total of 5.1 billion cubic feet per day (Bcf/d) of LNG export capacity in the first half of 2023, beating the full-year record of approved volumes from 2014.
Despite cost inflation concerns and higher interest rates, long-term deals are on the rise, especially in Europe, following the Russian invasion of Ukraine and subsequent energy supply disruptions.
With the approval of two projects and a third nearing final investment decision, U.S. export capacity will increase significantly, retaining its position as the world’s top LNG export capacity holder.
Northern Dynasty Minerals (TSX: NDM)(NYSE: NAK) will have to wait until the end of the week to hear the US Army Corps of Engineers’ (USACE) comment on future plans regarding the company’s Pebble copper project in southwest Alaska.
The Canadian miner said the body’s Alaska district had requested a second extension of 45 days to June 29 to decide whether or not the miner can proceed with permitting its copper-gold-molybdenum project.
President Joe Biden has openly expressed its opposition to the project, taking steps as soon as he took the post in 2021 to permanently protect Alaska’s Bristol Bay.
As part of the administration’s measures against Pebble, the US Environmental Protection Agency (EPA) blocked the company in January from storing mine waste in the state’s watershed, home to the world’s largest sockeye salmon fisheries.
Northern Dynasty has since raised doubts about its ability to continue if it is unable to raise the necessary capital for the project and continue the permitting process for the mine.
The Pacific Ocean Division of the Army Corps agreed in April to take another look at its refusal in 2020 to approve the project, after Northern Dynasty successfully appealed the decision.
For decades, explorers and developers have been attracted to resource-rich southwestern Alaska, known for holding significant deposits of gold, copper, molybdenum and other minerals near the headwaters of two rivers flowing into Bristol Bay.
But conservationists, local activists, fishermen and federal regulators have argued that industrial, open-pit mining operations to extract the lode threatens the region’s thriving sockeye salmon fishery.
If and when the mine moves into production, it would be the largest in North America.
Forecast installation of floating offshore wind energy in 2030 and 2035 has been adjusted downward for the second time in 12 months.
Forecast installation of floating offshore wind energy in 2030 and 2035 has been adjusted downward for the second time in 12 months, according to the latest market intelligence report by TGS and 4C Offshore, representing a 25% downgrade year-on-year for the 2030 outlook.
The twice-yearly Floating Offshore Wind Report forecasts that 12.4 GW of potential floating wind capacity will be operational or under construction globally by 2030, rising to 39 GW by 2035.
These figures are down 1.8 GW and 6.4 GW, respectively, to the previous analysis from fourth-quarter 2022.
According to TGS, the main cause is the slowing of the process of attaining offtake contracts and permits, which has led to greater volume being shifted post-2030. Of the forecast 12.4 GW by 2030, 6-7 GW now looks set to be operational, with the remainder under construction.
The report also finds that the UK remains the world’s most attractive market for floating wind, followed by Norway, South Korea, the US, and Japan.
Analysis of floating offshore wind’s levelized cost of energy (LCOE) and capex for existing and future projects suggests that LCOE will fall over time but at a slower rate than expected due to rising supply and capital costs.
TGS and 4C Offshore expect energy costs for floating wind to be about €85-100/MWh by 2030 (for projects starting offshore installation), €70/MWh by 2035 and €50/MWh by 2040.
The pathway to €50/MWh, the companies added, can be secured via scale economies, decreasing capital costs, technology innovations and longer lifetimes.
Director of Research Richard Aukland said, “Floating wind holds a lot of promise, but delivery is challenging. Offtake visibility is currently limited, and regulatory uncertainty is high in key emerging floating markets. There are many countries whose processes have not yet been tested and matured through bottom-fixed wind. Consequently, we don’t expect the build-out of floating wind to scale significantly until after 2030.”
Today’s Key Takeaways: Automakers look for non-Chinese graphite; Why aren’t oil prices higher? Qatar ready to sign 27-year LNG deal with China. AK Graphite One project has a new partner. Senate budget committee focus on fossil fuels.
Automakers, including Tesla and Mercedes, are rushing to lock in graphite supply from outside dominant producer China, as demand for electric vehicle (EV) batteries outpaces other uses for the mineral for the first time due to soaring EV sales.
Auto firms have been slow to plan for graphite shortages, focusing mainly on better-known battery materials lithium and cobalt, even though graphite is the largest battery component by weight. READ MORE
Why aren’t oil prices higher despite the expected market tightening?
That’s the question Rystad Energy Senior Vice President Jorge Leon outlined in a new market update, which was sent to Rigzone on Monday.
“Despite expectations of a looming oil market deficit, prices have remained surprisingly low,” Leon stated in the update.
“According to Rystad Energy, the oil market is projected to face a significant deficit, averaging 2.4 million barrels per day for the remainder of the year,” he added.
Looking at reasons for the phenomenon in the update, Leon noted that Rystad Energy suggests a combination of non-fundamental factors, lagging demand, and stronger than expected supply are at play.
Despite the price trend however, Leon said in the update that Rystad believes that, at some point in the coming weeks, market fundamentals will drive the oil market.
“Upside price pressure will materialize soon,” Leon stated in the update.
The Rystad representative conceded in the update that downside risks include a potential failure to stimulate the Chinese economy and lower than expected discipline by OPEC+ in adhering to production cuts. However, Leon stated that, “despite these risks, we remain confident that significant upside price pressure will materialize in the second half of the year”.
China is seeking increased imports of LNG from Qatar, the world’s top LNG supplier, in part to reduce dependence on LNG imports from the United States.
The 27-year agreement allows China to purchase 4 million metric tons of LNG per year from QatarEnergy.
In April, China’s Sinopec signed a deal to become a “value-added” partner in Qatar’s North Field expansion project.
Seeking a domestic source of quality graphite that it can transform into the super 2D material known as graphene, Vorbeck Materials Corp. is teaming up with Graphite One Inc., a company developing an all-American graphite supply chain that will begin at the world-class Graphite Creek Mine in Alaska.
“Vorbeck Materials is excited to team with Graphite One to meet unique defense and commercial requirements with Graphite One’s high-grade, U.S.-sourced graphite for advanced graphite and graphene applications,” Vorbeck Materials CEO John Lettow said.
THE BUDGET COMMITTEE’S FOCUS ON CLIMATE: Budget Chairman Sheldon Whitehouse held his 10th climate change-related hearing of the Congress this morning as he shapes the committee into the Senate’s fossil fuel watchdog.
Whitehouse has been using the committee’s jurisdiction over budgetary matters to scrutinize oil and gas companies’ business and political strategies, carrying over the “dark money” themes he has explored on other committees, including on Judiciary with respect to the nomination of judges.
“Collectively, fossil-fuel aligned trade organizations and dark money groups have spent tens of billions of dollars—again, that we know of—on ads, lobbying, campaign contributions and dark money front groups,” Whitehouse said this morning, adding that spending by fossil fuel interests is delaying decarbonization around the world and increasing climate-related economic risks to the U.S. budget.
Keeping up the momentum: Previous hearings have explored the risks associated with continuing to build fossil fuel assets only to see them left stranded by a green energy transition. The committee has also held a hearing on the “budgetary perils of dependence on fossil fuels” and another looking at how climate change is affecting insurance markets.
Earlier this month, the committee opened an investigation into how insurance companies calculate climate-related risk and decide whether or not to underwrite fossil fuel projects.
“Any new fossil fuel expansion is incompatible with our climate goals and economic stability. By underwriting and investing in new and expanded fossil fuel projects, U.S. insurers are helping Big Oil bring us closer to the worst runaway climate scenarios, which threaten lives, livelihoods, and the federal budget,” Whitehouse said at the time.
