Today’s Key Takeaways: Biden looks to increase refining capacity. Spike in global natural gas prices is creating new hope for Alaska’s elusive gas pipeline. Alaska uranium draws attention. AK Supreme Court rules special election can be certified.
NEWS OF THE DAY:
Calif. turns to natural gas to prevent blackouts
Anne C. Mulkern, Energywire, June 10, 2022
State officials confirmed that keeping plants online will constitute a large part of their reliability plan.
Natural gas plants will generate a large part of the electricity California will use to keep the lights on for the next five summers, state officials said yesterday.
The nation’s most populous state sees itself as a leader in fighting climate change, but it also faces an electricity supply crunch. Projections show that peak demand could exceed available supplies by as much as 3,500 megawatts. That would leave as many as 3.5 million homes without power (Climatewire, May 23).
The gap is caused by factors that include supply chain backups that have stalled generation projects. Gov. Gavin Newsom (D) has called for spending $5.2 billion to create an electricity reserve of 5,000 MW. The state’s grid manager, the California Independent System Operator, would be empowered to dispatch that electricity if it’s needed.
“It’s very fair to say a large portion of the 5,000 megawatts of strategic reserve will be gas,” Siva Gunda, vice chair of the California Energy Commission, said yesterday during a call with reporters.
The state will rely on natural gas plants because the electricity they make can be delivered quickly at a time of potential crisis, he said. The plan includes keeping plants online that otherwise would be due to retire and energy efficiency upgrades to get more power from those sites.
Gunda has previously said the state would seek to keep gas plants online, but he had not specified that gas would represent a large portion of the reserve. He added that the state also is seeking to get 100 to 300 MW of power as a result of paying consumers to cut their electricity use, known as demand response. That could also include locally based backup generators “that could potentially be decarbonized and enabled to serve as a strategic reserve,” he said.
California aims to make its grid carbon-free by 2045. Additionally, state law mandates California must generate 60 percent of its electricity from renewable sources by 2030. But supply chain disruptions have stalled generation projects.
Meanwhile, extreme heat, wildfires and drought threaten to cut supplies and drive up electricity demand. Rolling blackouts hit the state for two evenings in August 2020 during a West-wide heat wave.
“Extreme drought increased demand and the continued potential for widespread extreme heat events and other disruptions continues to leave the ISO grid vulnerable in being able to match supply with demand during the summer months,” said Elliot Mainzer, CEO of the California Independent System Operator. “The bottom line is that despite considerable progress, we continue to face risks to the reliability this summer and for the next several years, particularly on those very hot evenings in late August and September, when demand remains high.”
That situation will be worsened, he said, if there’s a West-wide extreme heat event.
“Short-term rotating outages are a possibility under these conditions, and we want people to be ready in case we call for conservation steps that need to be taken to balance supply and demand,” he added.
Officials yesterday pushed back against the idea the electricity reserve would significantly drive up greenhouse gas emissions. But they couldn’t quantify exactly how much additional emissions would result from creating the reserve and using more natural gas.
“In terms of the exact amount of emissions, it really depends on how often we will call … on these reserves and depends on the composition of the reserves,” Gunda said. “At this point, we are looking at needs of less than 50 hours a year under extreme conditions. So, we will have to look at exactly how many hours it is and the composition, and that will really kind of put us with the number.”
Environmental and clean energy groups have said the state should look for more clean energy options as well as upping incentives for consumers to cut their electricity consumption.
Karen Douglas, Newsom’s senior adviser for energy, said the system’s reliability is crucial.
“The most important thing to reducing emissions is to ensure that we have an electricity system that can handle that load growth that’s going to come with electrification from the transportation sector and from buildings and more and to be able to sustain reliability and affordability in light of the challenges that we face from climate impacts and extreme weather,” Douglas said. “And just in the face of bringing new projects online as fast as needed to meet our goals.”
Ted Craddock, deputy director of the California State Water Project, said the state has available 120 MW of existing generators that were installed last year, and there will be an effort to seek proposals for additional generation capacity. For next year, “we envision somewhere on the order of 180 additional megawatts added,” he said.
However, power plant retirements in California are expected to take away about 6,300 MW of supply by 2025. Those include the planned retirement of the Diablo Canyon nuclear plant’s two generators in 2024 and 2025. Asked about Diablo Canyon, Douglas reiterated the Newsom administration’s efforts to keep it running a few more years.
“Given the scale of the reliability challenges in front of us over the next years, we need to have all options on the table, and that includes understanding what it would take and how we would go about extending Diablo Canyon,” Douglas said. “We have made an effort to understand, for example, would Diablo Canyon qualify for federal grant funding and what would be the processes that would be necessary to extend it?”
The Newsom administration has asked the Department of Energy for help in getting federal funding that could delay the plant’s closure (Energywire, May 25).
OIL:
President Biden Looks For Ways To Increase U.S. Refining Capacity
Juliann Lowe, OilPrice.Com, June 10, 2022
U.S. President Joe Biden continues to look for ways to bring down the high cost of gasoline—and the latest efforts have him taking a hard look at U.S. refinery capacity.
According to White House economic advisor Cecelia Rouse who spoke to CNN in an interview on Friday, the President is looking to see what the administration can do, “whether that’s working with oil companies and refineries asking them, ‘We recognize your back capacity challenges – what can we do to help you maintain your refining capacity and bring more oil online?'”
Rouse did not elaborate on what this could entail beyond enquiring how they might be of help to the industry.
Meanwhile, the idea of effecting a windfall tax on the profits of oil and gas companies remains on the table, according to Rouse.
Refiners are running at 94.2% of their operable capacity at present, producing 10 million barrels per day of gasoline and 5 million barrels per day of distillates. Adding additional refining capacity is both a long-term endeavor and a capital-intensive one—such projects could span a decade.
So daunting is the task of building new refineries that a new one hasn’t been built in the United States since the ’70s. According to Chevron CEO Mike Wirth, there are unlikely to be any additional refineries added in the United States—ever—with companies having to commit capital today for something that wouldn’t return to shareholders for decades—at a time when the rise of the ESG movement is signaling to oil and gas companies that their products may no longer be needed that far into the future.
According to Wirth, the signals that the industry is getting are mixed.
GAS:
As energy markets spiral up, a gas pipeline could be closer than ever, Alaska politicians say
Nathaniel Herz, Anchorage Daily News, June 12, 2022
A war-driven spike in global natural gas prices is creating new hope for Alaska’s long-sought gas pipeline, elected leaders say, even as the $38 billion project still lacks binding promises from customers and a clear picture of who would build it.
Gov. Mike Dunleavy and U.S. Sen. Dan Sullivan, both Republicans, spent time in Japan last week drumming up demand for the project, which would span 800 miles from Alaska’s North Slope oil fields to Cook Inlet, not far from Anchorage.
“If we’re ever going to get a gas line, we will know within the next few months,” Dunleavy said in an interview Wednesday. “All the conditions are there.”
Dunleavy pointed to prices that have more than doubled since governments around the world swore off Russian energy exports in response to that country’s invasion of Ukraine in February.
But Alaska’s state-owned gas pipeline agency isn’t expected to make a final decision on construction until 2024, officials said this week. And analysts point out that prices are expected to fall toward prewar levels long before then, as other export projects come online and governments cut fossil fuel consumption to hit emissions reduction targets.
“It’s almost like a race to fill the gap,” said Al Salazar, vice president at Texas-based energy analysis firm Enverus. “These are the uncertainties that, if I was funding the Alaska LNG project, I’d be wondering about.”
“Markets correct,” he added.
Still, Alaska’s most powerful politicians are putting new energy into the project, which they’ve sought for decades even as the state has invested hundreds of millions of dollars into research, design, and promotion.
Those recent efforts have yielded at least incremental successes.
Alaska’s congressional delegation got language into the Biden administration’s infrastructure package that newly allows federal loan guarantees for an export project, not just one that sells gas in the U.S.
MINING:
Alaska uranium deposit attracts interest
Shane Lasley, North of 60 Mining News, June 8, 2022
As Washington lawmakers seek to ban uranium imports from Russia, Ucore’s Ross-Adams mine at Bokan draws attention
With renewed interest in nuclear to generate zero-carbon electricity for the clean energy future, coupled with Russia’s ongoing war in Ukraine, the past-producing Ross-Adams uranium mine on Ucore Rare Metals Inc.’s Bokan Mountain project in Southeast Alaska has caught the attention of unnamed parties interested in this potential domestic source of nuclear fuel.
While Ucore says it is entertaining the unsolicited offers to investigate Bokan’s uranium potential, any efforts on this front could not interfere with the company’s primary objective – delivering the much needed rare earths into America’s supply chain through the development of its Alaska Strategic Metals Complex, a REE and critical minerals separation facility the company plans to build near the town of Ketchikan about 35 miles from Bokan Mountain, and eventually mining the Dotson Ridge deposit at Bokan.
Recent events, however, make the uranium resources also found at Bokan Mountain a compelling proposition.
The U.S. relied on imports for 86% of its uranium needs during 2020 – roughly 16% of this uranium came from Russia, 22% from Kazakhstan, 22% from Canada, 11% from Australia, 8% from Uzbekistan, and 5% from Namibia – according to the U.S. Energy Information Administration.
In the wake of Russia’s invasion of Ukraine, many U.S. lawmakers are calling for the Biden administration to stop importing Russian nuclear fuel.
During a June 5 hearing before the U.S. Senate Natural Resources Committee, Sen. John Barrasso, R-Wyo., asked U.S. Secretary of Energy Jennifer Granholm if President Biden would ban imports of Russian uranium.
“I’ll let the President make that statement, but I can say that this is a point on which I think we have a lot of agreement. We should not be sending any money to Russia for any American energy or for any other reason,” Granholm replied.
Following the hearing, Bloomberg News reported that the Biden administration is seeking $4.3 billion to buy enriched uranium from domestic producers so that the U.S. can cut its dependency on imports from Russia.
Washington’s desire for more domestic uranium and a willingness to invest billions of dollars into making that happen makes a compelling case for revisiting the uranium potential at Bokan.
Ross-Adams Mine history
While Bokan Mountain has been explored by Ucore for its rare earths and critical minerals potential over the past 15 years, the property originally served as a domestic source of uranium for America’s nuclear energy ambitions.
The Ross-Adams uranium deposit on the Bokan property was discovered in 1955 by prospectors Don Ross and Kelly Adams using airborne radiometrics. From 1957 to 1971, this deposit was intermittently mined to fulfill sales contracts with the U.S. Atomic Energy Commission. According to U.S. Bureau of Mines records, 1.3 million pounds of uranium was produced from ore averaging 0.76% U3O8 during three periods of mining over this 14-year span.
This uranium ore was mined from a steeply dipping pipe-like orebody with a combination of a small open pit mine, which looks like a trench, and an underground mine.
The ore mined at Ross Adams was not processed on the Bokan property. Instead, the material was shipped by barge to facilities in Washington and Utah for beneficiation and processing.
The uranium pipe at Ross-Adams is known to extend below the lowest level of underground mining and is interpreted by Ucore to extend to depth but further exploration is needed to confirm the downward extent.
A study carried out by the U.S. Bureau of Mines in the 1980s estimated that Bokan hosts at least 11 million pounds of uranium, along with healthy quantities of niobium, zirconium, and rare earths.
Two critical deposits
While Ucore had some interest in the uranium potential at Ross-Adams when it acquired Bokan in 2007, its efforts have focused primarily on the rare earths and critical minerals found at Dotson Ridge, which is about 500 meters away from the historic uranium deposit.
According to the most recent calculation, Dotson Ridge hosts 4.79 million metric tons of indicated resource containing 31,722 metric tons of total rare earth oxides – 14 lanthanide elements, yttrium, and scandium – plus 1.05 metric tons of inferred resource with 6,979 metric tons of total rare earth oxides.
In addition to rare earths, Dotson Ridge hosts appreciable amounts of niobium, zirconium, beryllium, hafnium, titanium dioxide and vanadium – all considered critical to the U.S.
Due to recent enquiries, Ucore says it is exploring the possibility of a transaction that involves the Ross-Adams deposit but leaves Bokan-Dotson Ridge and seven other mineralization zones unaffected.
Any such deal would need to take into account some important environmental reclamation work required in and around the historically mined area at Ross-Adams, which primarily involves the consolidation of some mine rock on the surface and any remaining previously mined material that exists in secondary transit areas.
Newmont USA Limited and Dawn Mining Company, which carried out historical mining at Ross-Adams, have assumed responsibility for a US$7 million on-site environmental reclamation project that will deposit the rocks and previously mined material into an on-site repository in the historical open pit.
This remediation plan has been approved by the U.S. Forest Service, which is overseeing the work.
Continued rare earth plans
While considering a deal that could leverage the historic Ross-Adams mine to provide a domestic supply of the uranium that is becoming increasingly critical to generate low-carbon energy in the U.S., Ucore continues to advance its plans to supply the rare earths equally critical to the electric vehicles that will be charged with that energy.
In May, the company announced the start of a five-week field program focused on upgrading a portion of the Dotson Ridge resource to the measured category and collecting a roughly 50-metric-ton bulk sample to support a mill flowsheet pilot-scale testing program as part of a prefeasibility study for developing a mine at the deposit.
The mineral concentrate produced from the bulk sample material during the pilot-scale testing will be processed through a demonstration plant being developed at Ucore’s RapidSX Commercialization and Development Facility in Ontario.
RapidSX – which is basically a modernization and technological upgrade to the conventional solvent extraction technique that has been the standard for separating rare earths for more than 40 years – is the separation technology to be used at Ucore’s Alaska Strategic Metals Complex.
“Continued execution of the company’s long-term Bokan Mountain development plans, coupled with our near-term plan to construct the Alaska SMC 35-miles to the northeast of Bokan in Ketchikan, represents a unique opportunity for Ucore, the communities of Southeast Alaska and the State of Alaska,” Ucore Rare Metals Vice President and COO Mike Schrider said in May.
Further details on the development of RapidSX for the Alaska SMC and other applications can be read at Ucore regroups and advances Alaska SMC and Testing confirms Ucore rare earths tech in the April 22 and April 29, 2022 editions of North of 60 Mining News, respectively.
The development of a mine at Bokan and the nearby Alaska SMC are part of Ucore’s strategy to develop a North American rare earth elements supply chain that is particularly focused on the REEs needed for the magnets going into electric vehicle motors.
While not high-grade overall, Dotson Ridge is particularly enriched in heavy rare earth elements, including the terbium and dysprosium oxides often used in the powerful permanent magnets in EV motors and wind turbines.
As a result of the rapid transition to electric mobility, over the past two years, the price of terbium has rocketed from US$700 per kilogram to US$4,070/kg, and dysprosium has climbed from US$348/kg to US$631/kg.
With global EV sales forecast to climb to around 30 million per year by 2030 and more than 80 million per year by 2040, the demand for these magnet rare earths is only expected to increase over the next two decades.
By spinning out Ross-Adams, Ucore has the potential to benefit from both ends of the envisioned clean energy future – the generation of low-carbon electricity and the EVs that will require even more power to be generated by microreactors, small modular reactors, wind turbines, solar power generating facilities, and other sources.
POLITICS:
Palin, Begich, Gross and Peltola lead in special U.S. House election
James Brooks, Alaska Beacon, June 11, 2022
Former Republican Gov. Sarah Palin is leading the early results in Alaska’s special primary election for U.S. House.
Palin, who had about 30% of the vote counted by 10:40 p.m. Saturday, was followed by Republican Nick Begich III with 19%, third is independent Al Gross at 12% and Democratic candidate Mary Peltola at 7%.
Additional votes will be counted until June 21, but the results are unlikely to change the order of the first through third candidates.
The four are among 48 candidates seeking a temporary seat in the U.S. House of Representatives. The four people who receive the most votes in the primary will advance to a special ranked-choice general election on Aug. 16.
The winner of that election will serve in Congress until January, when the winner of November’s general election will be sworn in. Palin, Begich, Gross and Peltola have all registered as candidates for the full term.
During the campaign preceding the election, Palin earned the endorsement of prominent national Republicans, including former President Donald Trump.
Begich had been the leading Republican challenger to incumbent Congressman Don Young before Young’s death in March triggered the special election. Gross unsuccessfully ran for U.S. Senate in 2020 and Peltola is a former state legislator who would be the first Alaska Native elected to Congress if she were to win.
Outside the top four, Republican Tara Sweeney had 5% of the vote, followed by North Pole independent Santa Claus at 4%.
As of 10:40 p.m., elections officials had counted 108,981 ballots, and it wasn’t immediately clear how many remain to be counted. By the end of the day Saturday, about 139,000 ballots had been received, the vast majority by mail, but more ballots could arrive by mail through June 21.
The Alaska Division of Elections has said that additional results will be published June 15, June 17 and 21.
Because many voters made their choice before the final day of voting, many candidates kept a quiet schedule on election day, preferring household chores or yard work instead of campaigning.
There were exceptions — Al Gross waved signs with supporters in Juneau before boarding a plane to Petersburg, Sarah Palin walked with signs in Palmer’s Colony Days parade and other candidates hit the phones to reach potential voters.
The biggest drama of the day came from the Alaska Supreme Court, which said the election may be certified according to the schedule set by the Division of Elections.
The Supreme Court overturned a lower-court judge who had said that elections officials failed to properly accommodate blind and visually impaired voters.
The lower-court ruling came in response to a lawsuit brought by the State Commission on Human Rights. Had that ruling stood, it could have delayed the results of the election.
Elections officials plan to certify the result on June 25.