by wp_sysadmin | Nov 30, 2023 | Home, News
Today’s Key Takeaways: Banks providing sustainability loans looking for legal cover. OPEC deepens supply cuts. Lots of gas in Cook Inlet – why aren’t more companies drilling? AK Energy Metals sells data on Alaskan property to Silicon Valley company. COP28 establishes climate aid fund – will “voluntary contributions” work?
NEWS OF THE DAY:
ESG loan bubble close to bursting
Oil and Gas 360, November 28, 2023
The first sustainability-linked loan was the work of Dutch ING Groep and was closed in 2017. Since then, sustainability-linked loans have become the second-largest ESG market in the world, after so-called green bonds.
The essence of SLLs is that the borrower can benefit from a slightly lower interest rate in exchange for undertaking commitments in the environmental department—a principle that’s pretty similar to how ESG investment funds operate. But just like ESG investment funds, regulators—and investors—have now started to question the validity of sustainability-related claims by bond issuers and bank borrowers.
In a recent article on the issue, Bloomberg noted that the situation has reached a point where banks that provide SLLs are looking for legal cover in anticipation of greenwashing lawsuits. This anticipation could prove legitimate because banks did not check their clients’ ESG commitments in detail before granting loans, nor did they check whether these clients were using the money for environmental, social, or governance improvements.
OIL:
OPEC+ TO DEEPEN SUPPLY CUTS: OPEC+ agreed to deepen their oil cuts by 1 million barrels per day today, matching Saudi Arabia’s production cut of the same size as they look to prevent a feared supply surplus in 2024.
Riyadh agreed to extend its voluntary supply cut of 1 million bpd, which it first announced in July, sources told Bloomberg. The news comes as OPEC members look to use their collective producers’ power to keep prices between $80 and $100 per barrel.
“If those numbers get confirmed it shows OPEC+ wants to keep their hands on the oil wheel,” UBS Group analyst Giovanni Staunovo told the outlet. The oil cartel, he added, is “continuing to apply a proactive stance considering likely seasonally weaker demand at the start of 2024.”
Oil prices edged higher on the news, with futures for international benchmark Brent crude rising past $84 per barrel as of mid-morning, a 1.4% jump, while futures for U.S-based West Texas Intermediate saw a 56-cent rise from the previous day of trading, rising to at least $78.42 per barrel.
…MEANWHILE, THE GROUP ADDS BRAZIL AS NEWEST MEMBER: OPEC+ confirmed today that it has accepted Brazil into its influential group of oil producers. Brazilian Energy Minister Alexandre Silveira said today that their membership had been approved by OPEC President Lula da Silva, and will begin next year.
It remains unclear whether Brazil would need to comply with the expected supply cuts agreed to today, as it will not join the cartel until January. Read more from CNBC here.
From the Washington Examiner, Daily on Energy, November 30, 2023
GAS:
There’s lots of gas in Cook Inlet. Here’s why some companies aren’t drilling. (substack.com)
Nathaniel Herz, Northern Journal, November 29, 2023
Leaders of Alaska’s biggest gas and electric utilities say they don’t want to risk customer money to invest in uncertain drilling efforts, when imported LNG appears reliable and competitively priced.
One way out of Alaska’s impending natural gas shortage could sit under the ocean floor, a few miles north and offshore of the Kenai Peninsula community of Anchor Point.
There, a company says it’s sitting on an enormous pool of natural gas, equivalent to years of supply for Alaska’s power plants and home heating systems.
In fact, the company, BlueCrest Energy, has already brought numerous, productive wells online there, using a rig that drills horizontally from land out under the water. But the wells have been used mostly to pump oil from deep below the seafloor; the big pool of gas, BlueCrest says, sits higher up, between the oil and the ocean bottom
BlueCrest says extracting the gas will require wells drilled vertically, from a new offshore platform it wants to build in the water. But even though Anchorage-area policymakers and utilities are girding for an impending crunch in natural gas supplies, the company has failed to find investors willing to front the money for what could be a $350 million project.
“This is a sure deal,” Benjy Johnson, BlueCrest’s chief executive, said in an interview. ““The issue is, simply, the funding for the development. We are literally, every day, talking to investors, to try to convince them that Alaska is a safe place to come back to.”
There’s plenty of gas left in Cook Inlet — the aging basin offshore of Anchorage and the Kenai Peninsula — where BlueCrest says an engineering firm has validated its discovery with at least 90% confidence, using data from a decade-old test well and other past drilling efforts. A second company with holdings in the Inlet, Hex, also says it has similar amounts of untapped natural gas.
State experts agree that the deposits are significant, even if their exact scale remains unknown.
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MINING:
Alaska Energy Metals sells exploration data to KoBold Metals
Jane Bentham, Global Mining Review, November 30, 2023
Alaska Energy Metals Corporation has announced the partial sale of its previously purchased exploration data to a subsidiary of KoBold Metals Company, an exploration and mining company out of Silicon Valley known for its innovative use of machine learning and artificial intelligence in mineral exploration.
The data pertains to KoBold’s Skolai Project, which runs adjacent to AEMC’s Nikolai Nickel Project in the Interior Alaska region.
Alaska Energy Metals Corporation President and CEO commented: “We are pleased to recover some of our costs from the large exploration data set we bought earlier this year. KoBold owns claims that neighbour our Nikolai Nickel Project and I am confident they will put the data to good use. With it, it should accelerate their exploration efforts. We wish KoBold success in their search for magmatic nickel-copper sulfide deposits on their claims. Any discovery success in this emerging nickel district will benefit Alaska Energy Metals and Alaska generally.”
Earlier this year, Alaska Energy Metals acquired an extensive data package produced by prior explorers of the district, some of which now pertains to claims held by KoBold. AEMC has sold the relevant data to KoBold for US$175 000. The data has been clipped approximately to the boundaries of KoBold’s Skolai claim block and includes:
- Rock sample assay results (>1000 samples).
- Soil sample assay results (>2300 samples).
- Stream sediment samples assay results (>250 samples).
- Drill core assay results and core logs (13 drill holes).
- ZTEM and VTEM airborne geophysical surveys.
- Geological maps.
KoBold Metals Chief Strategy Officer, Daniel Enderton, added: “We appreciate completing this data purchase with Alaska Energy Metals Corporation to further work on our Skolai Nickel Project. We similarly wish Alaska Energy Metals success in their search for magmatic nickel-copper sulfide deposits on their neighboring Nikolai Nickel Project.”
POLITICS:
Climate aid fund established on first day of COP28 after 30-year controversy
Andrew Freedman, Axios, November 30, 2023
COP28 climate summit head Sultan Ahmed al-Jaber notched a win on the first official day of talks in Dubai, with the adoption of an agreement to set up a “loss and damage” fund to help developing nations.
Why it matters: The fund has been highly contentious for decades, once thought of as the third rail of international climate talks. It would use voluntary contributions from mainly wealthier countries and direct those funds to developing nations to help them withstand climate impacts.
- “The responsibility now lies with affluent nations to meet their financial obligations in a manner proportionate to their role in the climate crisis,” said Harjeet Singh, head of global political strategy for the Climate Action Network International.
Details: The agreement establishes the “Climate Impact and Response Fund,” which will be housed within the World Bank on an interim basis.
- Many developing countries opposed this structure during multiple rounds of negotiations, in part because industrialized nations like the U.S. exert more influence over that institution.
- The U.S. has emphasized all contributions to the fund are voluntary and not an admission of legal culpability for causing climate-related damages.
Flashback: This move completes work conducted last year, at COP27 in Egypt.
- At the time, countries agreed to create a fund but did not make decisions about how it would be structured, where it would be located, who would contribute and other key details.
- The steps taken Thursday spell out those details, but leave the pledges, or deposits into the fund, left to each nation to decide.
State of play: Developing countries have said these pledges should total at least $100 billion per year, but what was initially offered Thursday fell well short of that figure.
- For example, Japan pledged $10 million. The U.S., which is the biggest historical emitter in the world, proposed $17.5 million. Germany offered $100 million.
- The European Union pledged €200 million for the fund, and the UAE said they would contribute $100 million.
by wp_sysadmin | Nov 29, 2023 | Home, News
Today’s Key Takeaways: After increasing two years in a row, U.S. emissions expected to drop 3 percent. Senator Merkley attempts to rein in LNG exports. USGS investing in critical minerals – including Alaska. ENGO’s fight ENGO’s over offshore wind. $1 billion confidence boost in refiner Phillips 66.
News of the Day:
U.S. Carbon Dioxide Emissions Expected to Decline by 3 Percent This Year
Institute for Energy Research, November 29, 2023
Key Takeaways
- Carbon Dioxide emissions are estimated to drop 3 percent this year as coal plants are idled and retired and natural gas mostly picks up the slack.
- Carbon dioxide emissions increased in 2021 and 2022 as the impact of forced COVID closures that hammered energy consumption and economic growth faded.
- Global carbon dioxide emissions are going in the opposite direction, with a predicted 1 percent increase in emissions led by China, the world’s largest emitter by far.
- U.S. coal consumption will reach its lowest level since 1973 despite an economy over 3.4 times larger in real terms.
- President Biden has promised the United Nations that the United States will reduce carbon dioxide by 50 to 52 percent of 2005 levels by the end of 2030, but this year they are expected to be only at a 20 percent reduction from 2005 levels.
- Biden plans on spending hundreds of billions of taxpayer dollars subsidizing renewable energy and other “green technologies” to produce almost 150 percent of the reductions in the last 18 years over the next 7 years.
- China is benefiting from Biden’s plan, as it allows them to burn over half the world’s coal to make products Biden is demanding Americans buy.
READ MORE
OIL:
Activist Investor Elliott Buys $1-Billion Stake in U.S. Refiner Phillips 66
Charles Kennedy, OilPrice.Com, November 29, 2023
Elliott Investment Management, an activist investment group, said on Wednesday it had amassed a $1-billion stake in one of the largest U.S. refiners, Phillips 66, and expressed dissatisfaction with the company’s underperformance in recent years.
Apart from disclosing its $1 billion investment in Phillips 66, the activist investment firm sent a letter to the Board of Directors of Phillips 66, in which it outlined its ideas of how the refiner could regain trust with investors and unlock significant and sustainable value for its shareholders.
“Elliott sees approximately 75% upside to the current stock price,” the activist investor said today, sending the stock price of Phillips 66 (NYSE: PSX) up by 5% in pre-market trade in New York.
According to Elliott, Phillips 66’s performance has declined in recent years “as it has shifted its focus away from its Refining segment.”
“As a result, operational execution has suffered, and the Company was poorly positioned to take advantage of the refining super-cycle in 2022 and 2023,” Elliott said in the letter.
During the same period, Phillips 66 peers such as Marathon Petroleum and Valero Energy “were far better prepared,” according to the activist investor.
Phillips 66’s refining operating expenses per barrel have increased the gap with the same metric at Valero, undermining confidence among Phillips 66 investors that the company has the ability to run its refining operations efficiently, Elliott said.
“At present, we believe Mr. Lashier and the rest of the management team deserve investor support so long as they demonstrate meaningful progress against these targets,” the investor wrote.
Phillips 66 missed analyst expectations for the third-quarter earnings, despite stronger refining margins compared to the second quarter.
To compare, for the same quarter, Valero Energy, the second-largest U.S. refiner by capacity, booked higher-than-expected profits amid continued strong product demand in the United States.
GAS:
MERKLEY RENEWS CALL TO REIN IN LNG EXPORTS: Sen. Jeff Merkley of Oregon criticized U.S. LNG exports yesterday, voicing his strong opposition to the construction of additional LNG export facilities to help supply the EU as both Europe and the U.S. look to deliver on their emissions reduction targets.
Merkley said that exporting gas, even though it helped Europe avoid an energy disaster last year, is a “lose-lose” situation that risks significantly worsening climate change.
While Russia’s invasion of Ukraine upended the global commodities market, he said, the U.S. should bear in mind how long the EU will need additional LNG exports from the U.S.—especially as it looks to meet its own climate goals.
The question is therefore, “Does Europe need this forever?” he asked, speaking at an event last night hosted by Canary Media. “And the answer is no.”
“Europe is trying to dramatically reduce their reliance on fossil gas because they know, as we know … that we can’t possibly reduce the impact on climate if we’re continuing to use fossil fuels,” Merkley said. “So we have to phase them out.”
He also criticized the way that DOE and FERC currently assess the environmental effects of LNG, accusing them of essentially using a “rubber stamp” to broadly approve new projects and export terminals.
“In the worst case, it’s about twice as bad or more than twice as bad as locally produced coal,” Merkley said of the LNG facilities and planned export terminals.
“We like to pretend that this is somehow better for the world and that we’re some kind of stellar example, when it’s false,” Merkley said. “We can’t afford, with an issue of this magnitude, to be trotting out falsehoods to make ourselves look good.” Read more from the event here.
From the Washington Examiner, Daily on Energy, November 29, 2023
MINING:
USGS invests millions in critical minerals
Shane Lasley, Metal Tech News, November 29, 2023
In 2023 alone, the federal geological survey invested $51M into Earth MRI scans of 35 states as part of a nationwide critical minerals search.
From rare earths in Northern Maine to lithium in Southern California and titanium in Florida to 29 critical minerals in Alaska, the United States Geological Survey is investing heavily in strengthening domestic supply chains for the 50 minerals and metals critical to every sector of the American economy.
This nationwide search for critical minerals is being carried out under the Earth Mapping Resources Initiative, or Earth MRI, a clever moniker that reflects the earth penetrating scans carried out under the program that are providing geoscientists with data needed to diagnose the best places in America to find critical minerals.
To efficiently and effectively carry out these Earth MRI scans, USGS is partnering with geologists at the state level to help identify the best places to look and to carry out the groundwork.
In fiscal year 2023 alone, the USGS distributed more than $51 million across 35 states and Puerto Rico to fund geoscience data collection and mapping in partnership with state geological surveys to identify areas of the country with potential for critical minerals.
“Investments from President Biden’s Investing in America agenda are already helping us better understand our domestic critical mineral resources, a key step in securing a reliable and sustainable supply of the critical minerals that power everything from household appliances and electronics to low-carbon energy technologies like batteries and wind turbines,” said U.S. Geological Survey Director Dave Applegate.
POLITICS:
Environmentalists Face Off Against Environmentalists Over Offshore Wind Projects
Ken Wells, The Wall Street Journal, November 28, 2023
Supporters insist that, when done properly, projects can avoid harming marine species
Offshore wind turbines are pitting environmentalists against environmentalists—threatening to impede progress toward an ambitious U.S. goal for such projects.
The Energy Department estimates offshore wind turbines could produce as much as 20% of regional power needs along the densely populated Eastern Seaboard from Florida to Maine by 2050.
To reach that goal, the Biden administration had hoped to green-light 30 gigawatts from utility-scale offshore wind farms by 2030—enough to power nine million homes. That now seems wildly ambitious, as billions of dollars in projects have been canceled amid staggering cost overruns, soaring interest rates and supply-chain delays.
Added to these economic woes are persistent environmental concerns, as attested to by some recent federal lawsuits. In September, for example, Cape May County, N.J., and a coalition of regional environmental, fisheries and tourism groups sought to stop development of two utility-scale projects off the New Jersey coast.
READ MORE (subscription)
by wp_sysadmin | Nov 28, 2023 | Home, News
Today’s Key Takeaways: Markets not mandates for oil and gas under new Argentinian President. OPEC drops IEA as data source. Innovation makes LNG industry safer. Car dealers ask Biden to pull back EV mandates as vehicles stack up on lots. Overreacting to fossil fuel presence at COP28.
News of the Day:
What Does Milei’s Presidential Win Mean for Oil and Gas in Argentina?
Andreas Exarheas, Rigzone, November 28, 2023
Dominika Rzechorzek, a senior oil and gas analyst at BMI, a Fitch Solutions company, told Rigzone that BMI recognizes “upside risks” to its long-term crude oil and natural gas production forecast under Argentine President-elect Javier Milei, “as his pro-business agenda is set to raise attractiveness of Argentina’s upstream sector and spur investment”.
“During the presidential campaign, Milei was vocal about planned reforms, including efforts to lift capital and currency controls, which continue to be the key challenge for upstream companies operating in Argentina,” Rzechorzek said.
“He also promoted market-based pricing instead of price setting and the removal of oil and gas export taxes that would benefit primarily crude oil exporters and to a smaller extent gas exporters amid limited cross-border pipeline capacity,” the BMI analyst added.
Rzechorzek also highlighted that Milei is supportive of the expansion of LNG export capabilities, which the analyst said, “would likely result in a favorable regulatory framework for this sector”.
“Milei also plans to privatize YPF, the largest oil and gas producer in Argentina, over the next two years according to some of the media reports,” the BMI analyst noted.
READ MORE
OIL:
OPEC head accuses IEA of vilifying fossil fuel industry | Reuters
Maha El Dahan, Reuters, November 27, 2023
- OPEC dropped IEA as a source for data on oil market last year
- OPEC, IEA have disagreed on demand outlooks, energy transition
- IEA called carbon capture an illusion
- COP28 climate summit begins Nov. 30 in Dubai
DUBAI, Nov 27 (Reuters) – OPEC Secretary General Haitham Al Ghais on Monday accused the International Energy Agency (IEA) of vilifying the oil and gas industry, in the latest clash between the groups over climate policy.
Al Ghais was referring to a note published by the West’s energy watchdog on Thursday that said the fossil fuel industry was facing a “moment of truth” where producers had to choose between deepening the climate crisis or shifting to clean energy.
“This presents an extremely narrow framing of challenges before us, and perhaps expediently plays down such issues as energy security, energy access and energy affordability,” Al Ghais said in a statement.
“It also unjustly vilifies the industry as being behind the climate crisis.”
The Organization of the Petroleum-Exporting Countries (OPEC) and the Paris-based IEA have repeatedly clashed in recent years over issues such as long-term oil demand prospects and investment in new hydrocarbon supplies.
READ MORE
GAS:
Technology Making Today’s Liquefied Natural Gas (LNG) Industry Safer
Sarah Martin, Forbes, November 28, 2023
Today’s rapidly evolving energy ecosystem offers diverse ways to power the industries that keep the global economy running. Liquified natural gas (LNG) is one power source gaining increased attention, though it has been around for decades. The world’s first LNG carrier traveled from Louisiana to the U.K. in 1959.
Today, natural gas accounts for roughly 25% of global electricity generation. LNG can be used to fuel homes, commercial buildings, industrial plants, container vessels and cruise ships. To make LNG, natural gas is cooled until it becomes liquid (liquefaction), which shrinks its volume by 600 times; this makes it easier to store and transport. Most LNG is transported by sea in carriers using cryogenic tanks, though it can also be transported by rail, truck or barge. It must then be warmed back into its gaseous form.
Solutions Enhancing Safety In LNG Operations
Advanced safety technologies for the LNG sector—especially when layered together—can increase worker safety and reduce the likelihood of a fire or explosion.
Fixed gas and flame detectors that use infrared sensors, mounted in strategic locations throughout an LNG facility, enable operators to respond quickly to a leak, protecting both assets and people. Infrared technology within the gas detectors gives the devices a long operating life and enables fast detection and response in the event of a leak.
READ MORE
MINING:
Car Dealers Press Biden to Ease US Electric Vehicle Mandates
Keith Laing, Bloomberg Green, November 28, 2023
- Battery vehicles already ‘stacking up on our lots’: dealers
- Customers cite prices, lack of chargers, weather limitations
A group of US auto dealers is calling on the Biden administration to pull back on federal regulations that will mandate that two out of every three vehicles sold in the US in 2032 will be battery electric.
The car dealer group, calling itself EV Voice of the Customer, wrote in a letter to President Joe Biden released Tuesday that most US car buyers are not now interested in buying battery electric vehicles — even with government incentives — and the US should not force them to do so.
“The reality,” the letter said, “is that electric vehicle demand today is not keeping up with the large influx of BEVs arriving at our dealerships prompted by the current regulations. BEVs are stacking up on our lots.”
READ MORE
POLITICS:
Fossil fuel lobbying in the spotlight at COP28
Rebecca Falconer, Axios, November 27, 2023
Fossil fuel lobbying at COP28 is facing scrutiny after a report alleged host country the UAE planned to discuss striking oil and gas deals with other governments at the climate summit, which starts Thursday.
Why it matters: The report — which COP28 organizers categorically deny —includes allegations that a UAE team prepared “talking points” to further the interests of ADNOC, a state oil firm that COP president-designate Sultan Ahmed al-Jaber heads.
Zoom out: Environmental groups criticized the agreement reached at last year’s COP27 meeting in Egypt for not calling for the phasing down of all fossil fuels.
- Fossil fuel industry representatives have attended UN climate talks more than 7,200 times in the past 20 years, according to a report released by a coalition of advocacy groups last week.
- Sandrine Dixson-Declève, co-president of The Club of Rome, a nonprofit in Switzerland that works on climate change, who wrote last year that she feared the event was “becoming little more than a circus, with the petrostates as the ringmasters,” told NPR this week that the number of lobbyists who attend the COPs had surged.
- A COP28 team spokesperson declined to comment on the lobbying concerns.
Zoom in: The Centre for Climate Reporting and the BBC allege that briefing notes were prepared for UAE team meetings with “at least 27 foreign governments” ahead of the conference that’s due to run until Dec. 12.
- Among them was a “talking points” plan for China that allegedly said UAE state oil firm ADNOC was “willing to jointly evaluate international LNG opportunities” in Mozambique, Canada, and Australia,” per the report.
- The COP28 team spokesperson said in an email on Monday night: “The documents referred to in the BBC article are inaccurate and were not used by COP28 in meetings. It is extremely disappointing to see the BBC use unverified documents in their reporting.”
- Representatives for ADNOC did not immediately respond to Axios’ request for comment.
the UAE does “chart a practical but ambitious path to move the world off of fossil fuels,” per NPR.
Of note: UN officials announced in June that fossil fuel lobbyists would for the first time have to publicly disclose their role when registering for COP in Dubai.
What we’re watching: The world is on course to exceed 2°C of warming by the end of the century at current levels and UN Secretary-General António Guterres warned earlier this month: “Governments are literally doubling down on fossil fuel production.”
- But the UAE presidency has said it is committed to keeping to the 1.5°C goal despite the challenges.
- Al-Jaber, who is also the United Arab Emirates’ top renewable energy official and climate envoy, has described the phasedown of fossil fuels as “essential” and “inevitable.” He’s sought to convey that he can use his oil and gas experience to his advantage at COP28.
- Dixson-Declève said it would be “the perfect scenario” if the UAE does “chart a practical but ambitious path to move the world off of fossil fuels,” per NPR.
by wp_sysadmin | Nov 27, 2023 | Home, News
Today’s Key Takeaways: Virgin Atlantic transatlantic flight with sustainable aviation fuel. “American Oil – Good to the Last Drop?” China allows small amount of critical minerals to be exported. Media outlets are not trusted as sources of climate information.
NEWS OF THE DAY:
In a first, a major airline will cross the Atlantic without fossil fuels
Maria Gallucci, Canary Media, November 27, 2023
Virgin Atlantic will use 100% sustainable aviation fuel on a flight from London to New York. It’s an important step toward slashing emissions from planes.
A Virgin Atlantic flight taking off this week from London to New York City will last about eight hours, span around 3,500 miles — and emit only a fraction of the planet-warming gases associated with a typical transatlantic flight.
On Tuesday, the British airline is set to pluck a Boeing 787 Dreamliner from its fleet and run the two powerful engines on 100 percent sustainable aviation fuel, or SAF, during the journey from Heathrow Airport to John F. Kennedy International Airport. If all goes to plan, Virgin Atlantic will be the first commercial airline to fly a passenger plane across the Atlantic Ocean by burning only fossil-free jet fuel, marking an important milestone for the CO2-intensive industry.
The flight will demonstrate “the longer-term potential of SAF to decarbonize aviation,” said Joey Cathcart, a senior aviation associate in the Climate-Aligned Industries Program at RMI, a clean energy think tank. (Canary Media is an independent affiliate of RMI.)
“This is really critical because SAF is the most readily available decarbonization mechanism that aviation has today,” he added. Cathcart, who is based in Salt Lake City, is slated to board the ocean-crossing plane tomorrow in London with a select group of passengers. “Confidence is high,” he replied when asked if he had any preflight jitters.
READ MORE
OIL:
American Oil—Good to the Last Drop?
JinJoo Lee, The Wall Street Journal, November 27, 2023
Exxon and other companies have devised ways to squeeze more oil out of U.S. fields as some of the best ones near exhaustion, but it could be costly
How low can they go?
U.S. shale developers have been on a relentless chase to drill for oil as cheaply as possible. With plenty of cash in their pockets and a hunch that they might soon exhaust their best inventory in the prolific Permian Basin, some companies have been shifting their focus to making sure they get every last drop of crude they can get out of what they have. That could mean higher costs today.
Producers have done a great job of maximizing initial production. U.S. land and offshore productivity—measured as the amount of oil produced in the first 12 months per foot drilled—has been on a steady upward trajectory since 2007, according to data from Enverus.
U.S. onshore and offshore wells that have been producing for 12 months since August 2022 were 59% more productive compared with those that were drilled five years earlier, the data show. Those gains have been driven by improvements in seismic technology and mapping, longer wells and the amount of fracking fluid used, according to Jason Brown, economist at the Kansas City Fed.
It is unclear how long productivity gains can continue at this pace. There may be a limit on how long lateral wells can get, for example. Not only does the lengthening of a well require more contiguous land, but the longer wells get, the trickier it is to service them, according to Mark Chapman, senior vice president of oil-field services intelligence at Enverus.
Meanwhile, efficiency gains have stalled. Speed of drilling has peaked at around 1,400 feet a day in the Midland side of the Permian Basin, according to Chapman. And capital efficiency over the life of a development has been somewhat stagnant in recent years and has declined more recently because of rising oil-field service costs.
READ MORE
MINING:
China Allows Export Of Small Amounts Of Critical Minerals
Alex Kimani, OilPrice.Com, November 26, 2023
- Back in July, China announced export restrictions of germanium, gallium and their chemical compounds used to make parts for chips, telecommunications equipment, and electric vehicles.
- After a two-month hiatus, China has now resumed export of the minerals, albeit half-heartedly.
- It’s likely that there will be some improvement in strained relations between the two countries after presidents Xi Jinping and Joe Biden met in San Francisco last week.
Back in July, China announced export restrictions of germanium, gallium and their chemical compounds used to make parts for chips, telecommunications equipment, and electric vehicles. Graphite, a key material for EV batteries, is also set to come under export controls on Dec. 1. Although Beijing has claimed that the export ban of these critical minerals was done on national security grounds, observers have cried foul play and claim China has just escalated its tit-for-tat trade war with the U.S. and Europe.
After a two-month hiatus, China has now resumed export of the minerals, albeit half-heartedly. Chinese traders looking to export germanium and gallium are now required to apply for licenses from the government and also provide information on the identity of their customers and how the minerals are used. Chinese traders exported small quantities of germanium and gallium in October after exporting almost nothing in the preceding two months. Just 0.65 tons of germanium was exported in October compared to 8.78 tons in July while the numbers for gallium were 0.25 tons vs. 7.58 tons. China exported 44 tons of germanium and 94 tons of gallium in 2022.
READ MORE
POLITICS:
The know-it-all problem
Craig Medred, November 26, 2023
News as propaganda kills trust
Sometimes it is hard to tell whether scientists or journalists are most responsible for the pervasive global warming skepticism in the world’s largest and most powerful democracy.
A Pew Research survey in October found only about a third of U.S. citizens greatly concerned about the future climate, and after the Pew Research Center conducted in-depth interviews with 32 skeptics, it concluded that “climate scientists are valued for their expertise, but also seen as potentially having an agenda; media outlets are not trusted sources of climate information.”
Surprise, surprise.
Case in point: Alaska Public Media, which just days ago reported that “Anchorage broke its November snowfall record halfway through the month after repeated storms. Climatologists say the city could see more heavy snowfall like this in the future.”
This is the same Anchorage that went through a series of extremely snow-short winters in the 2010s that by 2013 had Smithsonian Magazine reporting the Iditarod Trail Sled Dog Race, the 49th state’s biggest and best-known sporting event, was destined to become a victim of climate change.
“Rain has been falling in place of snow, and the annual snowfall has been just 29 percent of what it was last year,” it was written there. “Though such a drastic year-over-year change is down to the weather, scientists are attributing a long-term drop in snowfall to climate change.”
This long-term drop in snowfall due to climate change became the theme for the rest of the decade with the New York Times in 2019 cutely headlining “The Mush in the Iditarod May Soon Be Melted Snow.”
Almost magically, the snow and cold returned shortly thereafter, and Anchorage winters have been a pretty snowy normal since. The only real difference between this year and last year is that the snow season has begun in earnest a month prior to the official first day of winter on Dec. 21.
At least Mother Nature had the courtesy to wait until closer to that date before dumping on Alaska’s largest city in 2022. It wasn’t until December 12 last year that Rick Thoman with the Alaska Center for Climate Assessment and Policy at the University of Alaska Fairbanks declared an “Anchorage Snowpocalypse, 2022 Edition.”
“For the first 12 days of December,” he reported in his Alaska and Arctic Climate Newsletter, “the National Weather Service (NWS) office near the Anchorage Airport has reported nearly 30 inches of snow, including a seven-day total of 27.8 inches between December 6 and December 12. Other places in the urban area have already exceeded 40 inches for the month.”
By the time Iditarod 2023 rolled around on the first Saturday of March with the official first day of spring fast approaching, Anchorage was a snow-covered winter wonderland primed for sled-dog racing with still more snow then falling.
READ MORE
by wp_sysadmin | Nov 22, 2023 | Home, News
An effort to prepare West Texas students to work in the oil and gas industry is expanding
Carlos Nougeras Ramos, The Texas Tribune, November 21, 2023
When Giovanni Parra’s instructor asked the class to weld the opposite ends of a wire during a lesson on soldering, the 16-year-old sprinted to the nearest workstation.
Parra is among dozens of students in a technical education program offered by the Midland school district that is preparing students to work in their own backyard, the oil-rich Permian Basin.
Unlike other classes at his high school, this one makes Parra feel connected to his family’s legacy.
“My whole family works in the oil fields,” Parra said. “I’m trying to see what I’m good at.”
Parra, a sophomore, is one of a few students who have access to this sort of hands-on learning. Within the 55 counties making up the Permian Basin between Texas and New Mexico, just four school districts offer classes that directly prepare students for work in the oil fields — a highly competitive market always short of workers. And two programs are fully enrolled.
In Odessa, hundreds of students are on a waitlist to take classes that teach them the basics of oil and gas.
An effort to expand access to oil and gas production courses to other high schools in Texas and New Mexico is underway, led in large part by energy companies. The region’s education leaders say the support helps both the schools and the industry.
“From the energy industry’s perspective, they are developing the next generation of workers,” said Scott Muri, superintendent of the public school district in Ector County, which includes Odessa.
Working with the state’s education department, the Permian Strategic Partnership, an organization made up of the leading energy companies including Chevron, ConocoPhillipps and ExxonMobil, is helping two schools in the Permian Basin and two in New Mexico put in place similar coursework that Parra is learning today.
Despite the fact that the West Texas economy has long run on the extraction business, this is one of the first modern attempts to prepare high school students to work in the fields before they graduate.
It’s part of a shift in public education to work closely with local business leaders to provide students with specific employable skills. The partnership plans to foot the cost of classroom supplies, teacher training and marketing.
“The oil and gas industry in the Permian Basin is going to be around for decades to come,” said Tracee Bentley, president of Permian Strategic Partnership. “We want the region to be successful. We know we are missing out on so much talent right here at home.”
A heated statewide debate over how to teach climate change in schools serves as the backdrop to the industry’s efforts to expand vocational instruction in the Permian Basin. Last week, the State Board of Education, a 15-member body controlled by Republicans, voted to reject seven of 12 proposed science books.
The board rejected textbooks containing policy solutions for climate change, as well as those published by companies that advocate for certain policies to combat climate change.
Human activities, especially emissions of greenhouse gasses from fossil fuel use, are the leading cause of climate change, according to the National Climate Assessment, a federal report requested by Congress in 1990 and signed into law by Republican President George H.W. Bush.
School districts aren’t obligated to exclusively use state-approved titles, but most will since those books are guaranteed to comply with state standards.
The Permian partnership, which led the $4.5 million effort to put the class in place, declined to specifically address how climate change is addressed in Texas classrooms. In a statement, the partnership said it would follow all state standards.
However, in New Mexico, the partnership said, the curriculum specifically addresses “energy efficiency and renewable energy, in addition to oil and natural gas.”
The program is one of several industry-specific classes being taught in Texas classrooms. More than 100 courses in Texas schools are offered to educate students on jobs from farming to dentistry to pharmacy.
Establishing and maintaining these skills-specific courses is difficult, said Jeff Horner, executive director of the Career and Technical Education Center in the Midland school district. Getting courses green-lit for the classroom requires exhaustive administrative upkeep to meet requirements, a time and resource-intensive commitment schools can’t always afford.
The state’s education agency calls for sponsors, a pilot program that lasts at least a year, and a renewal every two years. Horner said that fulfilling the state’s requirements while keeping up with an industry that changes frequently makes the program difficult to maintain with limited resources.
“It’s hard to keep the students up to date,” Horner said.
In Midland, classes are outsourced in the local college, and two instructors who belong to the faculty divvy the workload. One instructor commutes to the high school two times a week, while a second instructor waits for the students to commute from school to attend classes at the college.
More staff is always ideal but not feasible, said Anthony Cummins, assistant professor of energy at Midland College. Teachers are in short supply, and it can take anywhere from six months to a year before the college secures a qualified instructor, he said.“It can be difficult to hire instructors because we can make more in the oil fields,” Cummins said.
