Today’s Key Takeaways: Oil prices steady after inventory draws. Arctic LNG 2 halts operations. Exploring for geological hydrogen in AK. Alaska Miners say “no” to Ballot Measure 1.
OIL:
Oil Steady After EIA Confirms Draw in Crude, Gasoline Inventories
Irina Slav, OilPrice.Com, October 30, 2024
Crude oil prices remained largely unchanged today, after the U.S. Energy Information Administration reported an inventory draw of a modest half a million barrels for the week to October 25.
At the time of writing, Brent crude was trading at $72.25 per barrel, with WTI at $68.29 per barrel.
The change in oil stocks compared with a build of 5.5 million barrels for the previous week, which pressured oil prices additionally at the time.
The American Petroleum Institute, meanwhile, on Tuesday reported estimated inventory draws across crude and fuels, helping prices move higher for a time, although they remained subdued on the back of expectations of a ceasefire in the Middle East.
GAS:
Sanctions Force Russia’s Arctic LNG 2 Project to Halt Operations
LNG Journal, October 30, 2024
Novatek has suspended operations at its Arctic LNG 2 project due to Western sanctions limiting cargo transport and sales. The halt, reportedly effective since 11 October, reflects difficulties in securing ice-class vessels and finding buyers. The setback threatens Russia’s ambition to capture 20pct of global LNG market share by 2030.
Russia’s Novatek has recently halted operations at its Arctic LNG 2 project as Western sanctions restrict its options to ship and sell cargoes, according to reports by Reuters and Bloomberg. The Russian LNG specialist reportedly has no plans to recommence operations this winter, marking a significant setback for Russia’s gas ambitions. The project, situated on the Gydan Peninsula in the Arctic and majority-owned by Novatek, was meant to expand Russia’s share in the global LNG market to 20pct by 2030.
Export Challenges
According to the reports, commercial liquefaction at the facility was halted on 11 October owing to high inventories the plant cannot freely export. The suspension reflects the mounting difficulties Arctic LNG 2 faces in finding buyers and securing specialised ice-class vessels required for winter operations. The restrictions imposed by Western sanctions following Russia’s invasion of Ukraine have limited the project’s access to South Korea-built ice-class tankers and made foreign buyers reluctant to purchase the affected cargoes. According to our data, no Arctic LNG 2 cargo had been delivered to facilities outside Russia. At the time of writing, all cargoes were either still at sea or had been parked on one of Novatek’s giant FSUs in the Murmansk and Kamchatka regions.
MINING:
Exploring Alaska for geological hydrogen
Shane Lasley, Metal Tech News, October 28, 2024
Granite Creek assembles the catalyst-rich projects, scientific expertise to become a first mover in the geological hydrogen space.
A belt of rocks spanning the Southeast Alaska Panhandle hosts at least a dozen prospects and deposits enriched with nickel, copper, and platinum group metals (PGM) needed for the energy transition. Could these projects also host hidden stores of geological hydrogen that could offer a clean-burning fuel for the 21st century? Granite Creek Copper Ltd. believes they could and has acquired two Southeast Alaska PGM projects with “white hydrogen” potential.
An element that only emits water vapor when burned, hydrogen is seen by many as a game-changing clean energy fuel of the 21st century. However, hydrogen has the paradoxical distinction of being the most abundant element in the universe, yet very rare in its pure form here on Earth.
Being the lightest of elements on the periodic table, any pure hydrogen on Earth tends to escape the atmosphere. Most of the hydrogen that remains is locked up with other elements in water, hydrocarbons, and other forms.
Splitting hydrogen from water or natural gas, however, requires a lot of energy that comes with both financial and carbon emissions costs.
The grey hydrogen currently being split off natural gas for fertilizers, chemicals, and steel production costs about $2 per kilogram to produce and has a significant carbon footprint that cuts into its clean energy fuel potential.
Green hydrogen, which is split off of water molecules using renewable, does not come with inherent CO2 emissions but costs around $7/kg to produce – way too expensive to be a practical solution to fueling global commerce.
“If you get hydrogen at a dollar a kilo, it’s competitive with natural gas on an energy-price basis,” said Douglas Wicks, a program director at the U.S. Department of Energy’s Advanced Research Projects Agency-Energy (ARPA-E).
Geological hydrogen, a process that involves iron-rich rock formations producing hydrogen naturally, could be the solution.
The U.S. Geological Survey estimates there are potentially billions of tons of geologic hydrogen, also known as white hydrogen, buried in the Earth’s crust.
Granite Creek believes that PGM projects in Alaska and British Columbia have the right conditions to host hidden deposits of geological hydrogen and has acquired two such projects on the Southeast Alaska Panhandle – Duke Island and Union Bay.
POLITICS:
Alaska Miners Oppose Ballot Measure 1
“Like so many other ballot measures, AMA believes that this is bad policy with no opportunity for public input to improve the harmful provisions and retain the good. Ballot Measure 1 presents itself as a law to increase the minimum wage in Alaska, but also includes unclear provisions requiring mandatory paid sick leave for businesses of any type and size, and prohibiting employers from sharing “political matters” and religious information with employees
AMA is proud of our industry’s average annual wage of $122,000 and is a firm believer in training Alaskans to be skilled workers in our mines. Mining remains one of the top wage providers in Alaska. In fact, the majority of employers in the State of Alaska are paying far above what the wage would be raised to in 2027 should this measure pass. We certainly applaud efforts to help Alaskans cover the increased costs of living, but that concept is merely a façade to promote a full package containing separate, harmful provisions.
Ballot Measure 1 contains a mandatory sick leave provision that, in AMA’s opinion, is the most threatening part to Alaskan employers. It is a “one size fits all” application that ignores Alaska’s industries that are seasonal and industries that have rotational work schedules. Should the measure pass, all businesses that provide paid sick leave must alter their current policy to meet the minimum standards set by this initiative for how the sick leave can be used, and who it applies to. Employers would be required to pay sick leave for the mental and physical care of the employee, a family member, OR “someone whose close association is the equivalent of a family relationship.” The policy is poorly written, lacking clarity and giving broad definitions that will lead to employer-employee disputes, and will certainly increase the cost of doing business in our state.
Finally, AMA is gravely concerned with the section in the Ballot Measure that restricts an employer’s ability to share “political matters” with its employees. The ballot measure broadly defines “political matters” to include “matters relating to elections for political office, political parties, candidates, proposed legislation or regulation, and the decision whether or not to join or support any political party or political, civic, community, fraternal or labor organization.” Again, with more lack of clarity, the way this provision is written makes it possible that sharing this very statement with employees would be prohibited. Employers must be able to communicate attacks on business to their workforce, period.”