OIL: From the Washington Examiner, Daily on Energy:
THE COMING OIL PRICE BOOM: If history is a guide, an oil price boom is coming after the pandemic-generated crash.
While the near-term demand picture is highly uncertain, as people reconsider their travel and work habits, this latest bust, the worst of them all, is unlikely to hasten the demise of oil, Josh reports in a story posted this weekend.
“The only way to get away from the boom-bust cycle is to get off of oil,” said Bob McNally, president of Rapidan Energy Group and the author of a book on the topic called Crude Volatility. “That’s really tough because there are no scalable substitutes. As a result, we expect a thirstier world will collide into insufficient supply, and crude prices will have to rise sharply to balance the market.”
The reason: Oil supply will take longer to return than demand as drillers shut-in a record amount of production, companies cut spending on new investments, and the U.S. shale revolution slows.
“As demand rises and it becomes clear that producers over-cut, a roaring oil market will develop,” said Dan Eberhart, CEO of the drilling services company Canary and Trump donor.
How high: Few are expecting $100 per barrel oil, a level that was commonly reached during previous economic recoveries but hasn’t been met since summer 2014.
Joe McMonigle, president of the Abraham Group, an international strategic consulting firm, said he expects oil prices to reach around $45 per barrel as early as the third quarter of this year as economies are freed from stay-at-home orders.
He noted oil prices approached $80 per barrel as recently as last year.
“I hesitate to talk about $100 oil,” said McMonigle, a former Energy Department chief of staff in the George W. Bush administration. “But when the economy comes back, you will eventually get to that bust to boom cycle.”
GAS
DOE proposes regulation to keep NEPA reviews limited for LNG exports
S & P Global Platts, May 8, 2020
Citing efforts to “improve the efficiency” of its decision-making, the Department of Energy has proposed to limit National Environmental Policy Act reviews of LNG exports. The proposal could impact future proposed LNG facilities, those in the early review stages at the Federal Energy Regulatory Commission or future expansions of facilities. But the impact may be blunted because 11 of the 12 major LNG projects that recently cleared the FERC process already have DOE’s signoff for exports to countries that lack free trade agreements with the US.
Our Take: Limiting NEPA review to improve efficiency…this concept could and should be applied to many different projects.
MINING
Demand for battery metals to jump 500% by 2050
Cecilia Jamismie, Mining.Com, May 11, 2020
Production of battery metals such as graphite, lithium and cobalt will have to increase by nearly 500% by 2050 to meet the growing demand for clean energy technologies, the World Bank reported Monday. According to the global lender, over 3 billion tonnes of minerals and metals will be needed to deploy wind, solar and geothermal power, as well as the energy storage required to transition to a low-carbon economy. Many of the critical minerals used to make batteries for electric vehicles are found in developing nations. The World Bank’s goal is to help those nations to mine those commodities in a sustainable manner to avert major ecological damage.
POLITICS
America’s Coming Conservative Climate Offensive
Drew Bond & John Hart, Real Clear Energy, May 7, 2020
Earlier this year, Republicans made a subtle but significant shift on climate change. Rather than doubling down on the argument that man-made CO2 emissions pose zero risk, the GOP effectively decided it is a risk worth mitigating. In his State of the Union address, President Trump proposed planting a trillion trees. House Minority Leader Kevin McCarthy soon followed by announcing a series of proposals that treat carbon reduction as a worthy goal. This shift could not have come soon enough. Among younger Americans, the debate about climate change is essentially over. Polls consistently show that more than two-thirds of Americans believe humans are contributing to global warming with younger generations expressing the most concern.
COVID 19
Feds Announce First Arrests In Country Linked To PPP Loan Fraud
Kelly Phillips Erb, Forbes, May 11, 2020
It appears that two New England businessmen took the concept of “free money” way too far. David A. Staveley (a/k/a Kurt D. Sanborn) of Andover, Massachusetts, and David Butziger of Warwick, Rhode Island, have been accused of conspiring to illegally obtain funds through the Paycheck Protection Program (PPP). The PPP offers billions of dollars in potentially forgivable loans to keep workers on the payroll, guaranteed by the Small Business Administration (SBA). Staveley and Butziger claimed to have dozens of employees earning wages at four different business entities when, in fact, there were no employees working for any of the businesses. They allegedly sought more than a half-million dollars in loans.