Today’s Key Takeaways: Senate to AKLNG: Show me the money! A look at Alaska’s natural gas system. Hedge fund recommends more investments in fossil fuels, move away from renewables. Alaska’s next gold producer. “Dirty-fossil-fuels” stigma keeping young people from high-paying jobs.
NEWS OF THE DAY:
Alaska’s State-Sponsored LNG Project Is Struggling To Find Investors
Alex Kimani, OilPrice.Com, January 28, 2024
- For decades, elected leaders have dreamed about building a natural gas pipeline akin to ConocoPhillips’ 800-mile-long trans-Alaska oil pipeline.
- A 800-mile gas pipeline would run south to the Kenai Peninsula, where a LNG plant would liquefy the gas before loading onto tankers bound for Asia.
- Currently, the project is trying to find investors or partners to provide the $150 million that AGDC needs to finish the engineering and design work required before a final investment decision (FID) can be made.
Last year, the Biden administration issued the green light for ConocoPhillips’ (NYSE:COP) $8 billion Willow project in Alaska, ending the company’s long wait much to the consternation and chagrin of environmentalists. ConocoPhillips is the largest crude producer in Alaska and also the largest owner of exploration leases, with extensive holdings in Prudhoe and the National Petroleum Reserve-Alaska (NPR-A).
Whereas the Willow project has frequently garnered the lion’s share of attention and media coverage, another, even bigger, Alaskan energy project has been flying under the radar: the $43B state-led Alaska LNG project. Skeptics have been quick to point out that 2023 was yet another dry year for the ambitious project with no major deals or investments announced by the Alaska Gasline Development Corp., or AGDC. Things came to a head on Monday after Alaska Republican Gov. Mike Dunleavy’s administration presented the Senate Finance Committee with a $4.5 million budget request for the project, only to be met with pushback and sharp questions by three members of the committee.
“In my eight years of being a legislator, I don’t think they’ve inked one investment. And so is this a good use of those funds? Or do we need a change in leadership over there?” posed Wasilla Republican Sen. David Wilson.
For decades, elected leaders have dreamed about building a natural gas pipeline akin to ConocoPhillips’ 800-mile long trans-Alaska oil pipeline, that could export gas to markets outside of the state, provide cheaper heating fuel for Alaska residents and generate thousands of construction jobs.
Hedge fund calls on bp to increase oil and gas investment, cut renewable spending
Nishant Kumar, Laura Hurst, Bloomberg/World Oil, January 29, 2024
Hedge fund Bluebell Capital Partners called on bp Plc to bolster investments into oil and gas and cut spending on renewable energy, saying the company’s shift away from fossil fuels is misguided and weighing on the share price.
bp should spend $1.5 billion a year more through 2030 on oil and gas production and halt any further investment in renewables and power, the London-based investment firm said in an October letter to Chairman Helge Lund that was seen by Bloomberg. It reiterated its demands in another letter on Jan. 26.
Amid cold snap, equipment failure stresses Alaska’s natural gas delivery system
Nathaniel Herz, Northern Journal, January 27, 2024
I interviewed the president of Enstar, which runs urban Alaska’s gas utility, about problems with a storage facility and how they connect to long-term energy challenges facing the region.
If you’re reading this, chances are good you’re inside today, because with an intense cold snap in Southcentral Alaska, it’s a little too chilly to be sitting on a park bench scrolling Northern Journal with your phone.
And if you’re inside, and you’re warm, you are almost certainly in a space that’s heated with natural gas sold by Enstar. That’s the utility that delivers the fuel to more than 150,000 customers in Anchorage, the Mat-Su, and the Kenai Peninsula, and transports it for electric utilities in the region, which depend on gas to generate the vast majority of their power.
As it turns out, Enstar is seeing record demand during the cold snap — at a time when it’s also experiencing some equipment failures that stress its ability to deliver the gas needed by its customers. So far, Enstar and other utilities have been able to manage the problems without asking consumers to change their behaviors, like by lowering their thermostats. But that could change fast, and the cold weather is expected to run for at least several more days.
To hear more about this, I interviewed John Sims, Enstar’s chief executive, last night. Sims has been an increasingly vocal presence in the ongoing public discussion about Alaska’s dependence on natural gas, and how, amid decreasing production from the Cook Inlet basin near Anchorage, the state can continue to meet demand for home heating and electricity generation. Enstar, which is owned by Canadian pension funds through parent company TriSummit Utilities, is exploring the possibility of importing liquefied natural gas from outside Alaska, as well as resurrecting a dormant but pricy proposal to pipe natural gas to the Anchorage area from the North Slope.
Contango ORE: Alaska’s next gold producer
Shane Lasley, North of 60 Mining News, January 17, 2024
The first high-grade gold ore from the Manh Choh Mine in Alaska fed into the Kinross Alaska mill at the Fort Knox Mine near Fairbanks is elevating Contango Ore Inc. from a unique Alaska focused mineral exploration company to the newest gold producer in the state.
“We are indeed excited to report that mining operations have commenced at Manh Choh and that the construction phase has been achieved on budget and on schedule,” Contango ORE President and CEO Rick Van Nieuwenhuyse said during the August groundbreaking ceremony at Alaska’s newest metal mine.
Being developed under a joint venture between Kinross Gold Corp. (70%) and Contango (30%), Manh Choh is expected to produce roughly 1 million gold-equivalent oz, which includes the value of both the gold and silver, over an initial 4.5 years of mining slated to begin around mid-year.
Stigma of ‘dirty fossil fuels’ drives young people away from lucrative careers in oil and gas work
Kevin Killough, Just The News, January 22, 2024
“Dirty Jobs” host Mike Rowe said a message came down over the decades to young people that a four-year degree was the path to success and trades were the dead-end career choice.
Petroleum engineering is the highest paying bachelor’s degree in the United States, according to a report by Payscale, but despite an average annual salary of $97,500, oil companies struggle to fill positions.
The industry faces a number of challenges. Employees often face cyclical layoffs whenever commodity prices collapse, and that makes the jobs appear unstable. Young people today are also concerned about working in an industry they’re taught is destroying the planet.
Some of the respondents on the latest “Dallas Fed Energy Survey” remarked on the labor shortages in the industry. “Labor is hard to find. Dirty-fossil-fuels stigma drives younger talent away,” one respondent said.