Today’s Key Takeaways: Small refineries big court win. Doubling down on LNG while renewables slip. Court overturns authorization of LNG project. Graphite One makes a deal with Lucid Motors. Alaska’s primary is NOT a ranked choice election.
NEWS OF THE DAY:
A Court of Appeals Win for Small Refineries
Institute for Energy Research, August 7, 2024
- The D.C. Court of Appeals has told the Biden-Harris Administration’s EPA to revisit their decision to deny small refiners legal waivers under the Renewable Fuels Standard program.
- Small refiners have been struggling to stay open while paying for ever-increasing costs of buying credits for biofuels required by EPA.
- EPA estimated consumers will pay an additional $23 billion over 3 years under this program, with refiners passing on the cost of compliance.
- The amount of required corn-based ethanol in gasoline has remained steady, but EPA is increasing the requirements for all other kinds of biofuels, many of which are considerably more expensive.
A federal appeals court in Washington D.C. rejected the Environmental Protection Agency’s (EPA’s) decision in 2022 to deny small oil refineries temporary waivers from the nation’s biofuels blending program and sent the matter back to the agency for review. The Renewable Fuel Standard (RFS) provides a provision where EPA can award exemptions to small refiners if they prove the obligations cause them undue harm. But, in 2022, the EPA rejected a slew of their requests, triggering the legal battle that was led by the Sinclair Wyoming Refining Company and joined in by small refineries.
OIL:
Big Oil Doubles Down on LNG as Renewables Falter
Irina Slav, OilPrice.Com, August 6, 2024
- Supermajors are scaling back renewables projects and investments due to poor returns compared to LNG.
- Big Oil prioritizes growing its LNG business, seeing strong demand for natural gas in the medium to long term.
- Renewables commitments falter as European oil and gas firms focus on energy security amid the energy crisis and skyrocketing prices.
The supermajors continue to bet on LNG while scaling back renewables projects and investments as oil and gas returns continue to trump the poor profits from renewables.
The world’s top international oil and natural gas firms are sanctioning new LNG projects and buying stakes in new developments as they see demand for natural gas growing in the medium to long term.
Bound by the pledges to return more cash to shareholders, Big Oil is betting on growing its much more lucrative LNG business than on wind, solar, or biofuels, where returns have been poor for years and haven’t really taken off despite soaring global capacity additions.
In recent years, LNG trading has reaped a lot of profits for the European majors, while nearly all of them have had to take impairment hits on renewables projects in Europe and the U.S.
GAS:
U.S. court overturns FERC’s authorization for NextDecade’s Rio Grande project
Reuters, August 6th, 2024
A U.S. court has overturned the Federal Energy Regulatory Commission’s (FERC) authorization for NextDecade’s (NEXT.O), opens new tab Rio Grande LNG project for not issuing a supplemental environmental impact statement, the company said on Tuesday.
The facility has been in development for several years, suffering repeated delays, and phase 1 is now expected to reach completion by early 2029 at an expected cost of about $18 billion.
NextDecade said it was “disappointed in the court’s decision and disagrees with its conclusions.”
“At this time, construction continues on the first three liquefaction trains and related infrastructure (Phase 1)” the company said, adding it “is evaluating the impact of the court’s decision on the timing of a positive final investment decision (FID) on Train 4”.
Earlier this year, Abu Dhabi National Oil Company (ADNOC) acquired an 11.7% stake in phase 1 of the project and NextDecade signed a non-binding agreement with Saudi Aramco (2222.SE), opens new tab to supply 1.2 million tonnes per annum (MTPA) of LNG for 20 years.
MINING:
Graphite One links Alaska to EV industry
Shane Lasley, North of 60 Mining News, August 1, 2024
A graphite supply agreement struck with Lucid Motors provides a key link to forging a mine-to-EVs supply chain.
Graphite One Inc. has struck a battery materials supply agreement with California-based electric vehicle manufacturer Lucid Motors that is expected to forge a complete mine-to-EVs graphite supply chain with links in Alaska, Ohio, and Arizona.
Alaska’s delegation in Washington, D.C., is hailing this battery materials agreement as a win both for America’s 49th State and for building a secure domestic supply chain to support the nation’s energy transition.
“I’m pleased that Graphite One and Lucid Motors are partnering to create a domestic supply chain for electric vehicles made in America from materials mined in Alaska,” said Sen. Lisa Murkowski. “These companies represent the start and the end of the supply chain, and they have the right vision to help strengthen our economy, our competitiveness, our security, and our commitment to true sustainability.”
Lucid Motors, a Silicon Valley-based company that has drawn accolades and awards for the exceptional performance and range of the four versions of its Lucid Air electric sedan, has entered into an agreement to buy domestically produced synthetic graphite anode material for the batteries powering its electric vehicles from a processing and recycling plant to be built by in Ohio.
“We are committed to accelerating the transition to sustainable vehicles and the development of a robust domestic supply chain ensures the United States, and Lucid, will maintain technology leadership in this global race,” said Lucid Motors CEO and Chief Technical Officer Peter Rawlinson. “Through work with partners like Graphite One, we will have access to American-sourced critical raw materials, helping power our award-winning vehicles made with pride in Arizona.”
This partnership is a key milestone along Graphite One’s path to establishing an all-American graphite supply chain that begins at the company’s Graphite Creek mine project in western Alaska.
“This is a historic moment for Graphite One, Lucid and North America: the first synthetic graphite supply agreement between a U.S. graphite developer and U.S. EV company,” said Graphite One President and CEO Anthony Huston. “G1 is excited to continue pushing forward developing our 100% U.S. domestic supply chain.”
POLITICS:
Early voting starts for Alaska’s Aug. 20 primary election
Sean Maguire, Iris Samuels, Anchorage Daily News, August 6, 2024
Early voting started Monday for Alaska’s Aug. 20 primary election.
Alaska’s sole seat in the U.S. House of Representatives will be on the primary ballot, alongside all 40 seats in the Alaska House of Representatives. Half of the state Senate’s 20 seats will also be on the ballot.
In 2020, Alaska voters narrowly approved a ballot initiative that implemented ranked choice voting and open primaries. Alaskans first used the new voting system in the 2022 election cycle. This year, voters will again pick one candidate per race in the primary election.
The top four vote-getters, regardless of political affiliation, will advance to the Nov. 5 general election.
Lauri Wilson, the Region 1 elections supervisor, reiterated in a Monday interview that voters need to remember the primary is not a ranked choice election, unlike the November general election.
“It’s a pick-one primary. Vote for one (candidate) and move to the next race,” she said.