Today’s Key Takeaways: Biden admin throws “large jurisdictional blanket” over entire Arctic. Texas company moves to buy Chevron’s Alaska assets. Natural gas appliances are better than electric in terms of emissions and cost. AK mining industry is on cusp of major breakout. Crucial legislation passes Senate.
NEWS OF THE DAY:
Biden Administration ‘Walking Thin Line’ in Alaska Waters Claim
Bobby Magill, Bloomberg Law, September 16, 2024
- Army Corps hints at ‘significant nexus’ test revival
- Agency accused of ignoring high court’s Sackett ruling
The Biden administration’s assertion last week that it has jurisdiction over most wetlands on Alaska’s North Slope is inflaming tensions over the scope of federal power.
More legal battles are likely because the Army Corps of Engineers is suggesting that wide regions of the country that include wetlands can remain under Clean Water Act jurisdiction even after the Supreme Court in 2023 drastically narrowed the law’s scope in Sackett v. EPA, environmental attorneys say.
The Biden administration “is walking a thin line here,” said Steven Miano, a shareholder at Hangley Aronchick Segal Pudlin & Schiller PC. “They are throwing a very large jurisdictional blanket over the entire Arctic area.”
The justices ruled that for wetlands to receive federal protections as waters of the US, or WOTUS, they must be “relatively permanent,” and have a continuous surface connection with larger waterways to such a degree that the wetlands must be “indistinguishable” from them.
The ruling effectively lifted federal protections for numerous wetlands and waterways, especially in arid states such as Colorado, where state officials say that about 90% of the state’s wetlands are no longer federally protected.
‘Staggeringly Broad Authority’
The Biden administration has argued in court filings that any “physical” connection between a wetland and a navigable water is sufficient to establish the continuous surface connection required for the wetland to fall under federal jurisdiction.
The Army Corps is applying that thinking to a Utah-sized region of Alaska’s North Slope, which is made up mostly of moist permafrost that stays frozen most of the year, Emma Pokon, commissioner of the Alaska Department of Environmental Conservation, testified at a Sept. 11 congressional hearing on WOTUS regulations.
Nearly all wetlands and other waters on Alaska’s Arctic Coastal Plain have a continuous surface connection to a larger waterway, making it “safe to assume that the vast majority of aquatic resources in this region will be considered waters of the US,” Army Corps spokesman John Budnik said in an email.
That interpretation of the justices’ ruling shows that the agency is “continuing to assert staggeringly broad authority over many types of isolated wetlands and other dry land features,” said Charles Yates, an attorney at the Pacific Legal Foundation, which represented the plaintiffs in Sackett.
“They continue to rely upon various asserted ‘connections’ that are not ‘continuous’ under any plausible understanding of that word,” he said.
OIL:
In sign of North Slope evolution, privately owned Texas company targets Chevron’s Alaska assets • Alaska Beacon
Nathaniel Herz, Northern Journal/Alaska Beacon, September 17, 2024
A little-known Texas company is buying a share of a key North Slope pipeline and asked to buy all of Chevron’s oil interests in the region — reviving questions about the Alaska oil industry’s capacity to decommission aging infrastructure and pay damages in the event of a spill
A little-known Texas company is proposing to buy a share of a key North Slope pipeline from Chevron — a bid that’s reviving questions about the Alaska oil industry’s capacity to decommission aging infrastructure and pay damages in the event of a spill.
The executives behind Pontem Alaska Midstream, the firm that wants to make the acquisition, have a long track record in finance, and parent company Pontem Energy Capital has access to cash through “institutional pools of capital” and “ultra-high net worth” families, Pontem and Chevron have told regulators.
But they’ve revealed few details about the assets currently owned by Pontem, which wants to buy a stake in the North Slope pipeline that connects the Kuparuk and Alpine oil fields with the Trans Alaska Pipeline System.
And the companies say that because Pontem is a new business, it has no audited financial statements to share with the Regulatory Commission of Alaska, or RCA. That’s the state agency that Pontem and Chevron are asking for expedited approval to transfer Chevron’s 5% interest in 37 miles of pipeline that move as much as 175,000 barrels of oil a day and are poised to carry even more, as new projects come online.
Attorneys working with the companies also asked Republican Gov. Mike Dunleavy’s administration earlier this year to transfer Chevron’s minority interests in three major North Slope oil fields to Pontem — including Chevron’s stake in the massive Prudhoe Bay deposit.
GAS:
GAS BETTER ON COST & EMISSIONS THAN ELECTRIC, TRADE GROUP CLAIMS: The American Gas Association released a study today claiming that natural gas for appliances, rather than electric, provides greater savings for homeowners while lowering greenhouse gas emissions over the course of 15 years.
The details: AGA estimated that in new homes using natural gas appliances like furnaces, heat-pumps, or stoves, homeowners spend around $1,132 less than they would if they powered appliances using electricity.
The trade group also found that installing a condensing natural gas furnace can cut 15-year emissions by 17% compared to an electric furnace. Even installing a gas-electric heat pump hybrid in a home has been found to reduce installation and usage costs as well as emissions for the entire home. Using efficient gas appliances throughout the home is further predicted to lower greenhouse gas emissions by 40% by 2040, AGA said.
AGA said that incorporating the use of renewable natural gas can provide even more savings for homeowners – upwards of $600 every year. The trade group recommended blending RNG into natural gas as a cost-effective and emissions-reducing alternative to electric-households.
“When you include RNG, the emissions reductions continue to increase, and that is really essential, as we are all committed to very ambitious greenhouse gas emissions reductions in the future,” Karen Harbert, the President, and Chief Executive Officer of the American Gas Association, told reporters.
For the study, the trade group used publicly available data from organizations like the Department of Energy and the Energy Information Administration to compare the cost and emission reductions of gas and electric heating appliances in newly built homes, while considering regional climates, ventilation, building design, and cooling systems.
From the Washington Examiner, Daily on Energy, September 17, 2024
MINING:
The Future of Alaska’s NEXT Big Mining Boom
Yahoo! Finance, September 12, 2024
Alaska’s mining industry is on the cusp of a major breakout. With its over 7,400 documented prospects, Alaska ranked as the fifth most attractive mining jurisdiction globally (out of approximately 80 worldwide jurisdictions).
Today, the state is poised to rise even higher thanks to its rich geological landscape and untapped mineral resources. Investors and industry experts alike are turning their attention north as Alaska’s potential to become a leader in both precious and critical metals production becomes increasingly clear.
With gold and prices climbing and demand for critical minerals such as zinc, copper, and lead growing, Alaska’s vast, underexplored terrain could hold the key to the next major mining boom.
Alaska’s geological advantage lies in its diverse metallogenic provinces, boasting rich deposits of gold, silver, zinc, and other valuable minerals. In addition to its world-class reserves, the state’s stable political environment and pro-mining regulations make it an attractive destination for exploration and development.
As more projects gain momentum, the stage is set for Alaska to solidify its role as a global mining powerhouse. The real question is: how high can Alaska climb?
POLITICS:
‘Crucial’ Legislation Passes Senate
Andreas Exarheas, Rigzone, September 18, 2024
The Royalty Resiliency Act, also known as H.R. 7377, passed the Senate without amendment by unanimous consent last week, the Congress.gov website showed.
The bill is sponsored by Congressman Wesley Hunt, was introduced in the House in February, and was received in the Senate in July, the site highlighted. It must now go to the president to become law, the site outlined.
A summary statement on the Congress site notes that the bill modifies the process under which oil and gas leaseholders who have entered into certain joint drilling agreements to drill wells on leased land pay royalties to the Department of the Interior under the Federal Oil and Gas Royalty Management Act of 1982.
“Under current law, Interior must issue a determination of allocations of royalty payments for oil and gas production under a joint agreement within 120 days of a request for determination,” the summary states.
“Generally, the first leaseholder to drill must pay any royalties due to Interior for all oil and gas production on the land subject to the agreement until Interior determines the royalty allocations of each leaseholder,” it adds.
“If Interior fails to issue the determination by that deadline, then it must waive interest due on royalty obligations until the end of the month following the month in which the determination was made,” it continues.
Under the bill, a leaseholder must pay royalties on oil and gas production based on the lessee’s proposed allocation of production under the joint agreement until Interior issues a determination of royalty allocations, the summary statement on the Congress site notes.