Today’s Key Takeaways: Biden’s BLM locks up AK land – again. ExxonMobil’s view of energy supply and demand through 2050. Small Cook Inlet producers have gas, need help. AIDEA permit for Ambler road suspended.
NEWS OF THE DAY:
Biden administration will keep 28 million acres in Alaska closed to drilling and mining
Alex DeMarban, Anchorage Daily News, August 27, 2024
Interior Secretary Deb Haaland will keep in place protections against potential oil and gas development and mining claims on 28 million acres of federal land across Alaska, the federal government said Tuesday.
The lands were protected from such development in the 1971 Alaska Native Claims Settlement Act. The Trump administration took steps to remove the protections, an effort supported by Republican Gov. Mike Dunleavy and U.S. Sens. Lisa Murkowski and Dan Sullivan.
But the Biden administration said it found legal flaws in the previous administration’s effort, leading to a new environmental review to determine the best use of the lands.
Haaland signed the decision Friday, following an environmental review and public input. A new public land order will retain the protections.
“Continuing these essential protections, which have been in place for decades, will ensure continued access and use of these public lands now and in the future,” Haaland said in a statement from the Bureau of Land Management, which oversees the lands.
Dunleavy said on social media Tuesday that the decision is “the latest sanction against Alaska by the Biden-Harris administration.”
“They are attempting to turn Alaska into one big national park,” Dunleavy said. “Alaska is still owed five million acres of land under the Statehood Act. Every one of these sanctions harms Alaska’s ability to prosper.”
OIL:
ExxonMobil Global Outlook: Our view to 2050 | ExxonMobil
Key takeaways
| 1. | All energy types will remain in the mix. |
| 2. | Renewables will grow the fastest. |
| 3. | Coal will decline the most. |
| 4. | Under any credible scenario, oil and natural gas remain essential. |
| 5. | Lower-carbon technology needs policy support to grow rapidly but ultimately must be supported by market forces. |
| Download the 2024 Executive Summary |
GAS:
Small Cook Inlet producers say they need state government help before drilling for new natural gas
Nathaniel Hertz, Northern Journal/Alaska Beacon, August 27, 2024
One company, Bluecrest, said it will need more support even after a state agency agreed to forgive some $7 million in loans. Another company, HEX, says it needs the state to agree to a royalty reduction before it will drill a well.
With time running out before a shortfall in local natural gas production forces Alaska’s urban utilities to import more expensive supplies from outside the state, two small companies say they have reserves that could help fill the gap.
But executives from the two privately owned oil companies, BlueCrest Energy and HEX, say they won’t be able to drill wells to access the gas on their state-leased lands without government help.
While Bluecrest’s plans are longer-term, Anchorage-based HEX is scrambling to prepare for a drilling effort from its Julius R platform, in Cook Inlet offshore of the Kenai Peninsula, before winter sets in.
But that $12 million expense will only be worthwhile, according to HEX President John Hendrix, if officials from the Alaska Department of Natural Resources, or DNR, grant his company’s request for concessions.
Hendrix said he needs the department to reduce the 12.5% share of HEX’s production that the company is required to pay to the state — what’s known as a royalty. HEX has been pushing for that reduction for months, and Hendrix said he needs an answer by Sept. 3 for the company to proceed with drilling this year.
“DNR’s smart — I think they can put numbers together and be realistic about this. I hope politics doesn’t get involved,” Hendrix said. He added: “I’m trying to save Alaskans.”
Meanwhile, Texas-based Bluecrest isn’t planning to drill before winter. But in the next few years, it hopes to build a new offshore platform in the inlet that could produce huge amounts of gas — if it can secure state loans to match the money it hopes to raise from private investors, said Benjy Johnson, the company’s president.
A previous Bluecrest project went south when Alaska lawmakers slashed the budget for an oil and gas tax credit program — forcing the state agency that loaned Bluecrest $30 million to renegotiate the debt more than a dozen times, and ultimately to agree to forgive millions of dollars in public money that the company owed.
The decision by lawmakers to cut the tax credit payments, nearly a decade ago, has scared off potential investors, Johnson said in an interview.
“No one is going to do a penny unless the state, somehow, is involved,” he said.
Johnson has not yet made a formal application for state support.
MINING & POLITICS:
Army Corps suspends permit for Alaska mining road – E&E News by POLITICO (eenews.net)
Miranda Wilson, E & E News, August 20, 2024(subscription required)
The permit would allow a state-owned development agency to fill in over 1,400 acres of wetlands.
The Biden administration has suspended a water and wetlands permit for the proposed Ambler mining road in Alaska, a month and a half after the Bureau of Land Management rejected the contentious project.
In a letter sent this month, the Army Corps of Engineers informed the Alaska Industrial Development and Export Authority that a previously issued permit to fill in approximately 1,400 acres of wetlands was suspended, “effective immediately.” The authority is a state-owned development bank pursuing the project.
A 211-mile industrial access road, the Ambler Road Project is intended to support the development of new mines for minerals like zinc and copper in northwestern Alaska and benefit the area’s economy.