Today’s Key Takeaways: Backlash building against clean energy push. Construction on Willow Project is underway. Fast tracking mining for development of clean energy assets. Alaska’s tax proposal “disastrous idea for any economy.”
NEWS OF THE DAY:
‘Over Our Dead Bodies’: Backlash Builds Against $3 Trillion Clean-Energy Push
Jennifer Hiller, The Wall Street Journal, May 8, 2023
The federal government has ignited a green-energy investment spree that’s expected to reach as high as $3 trillion over the next decade. The road to spending that money, though, is increasingly hitting speed bumps from the likes of Gerry Coffman.
About an hour southwest of Kansas City, she turned down a wind lease last year on a farm that has been in her family since 1866. Someone knocked on her door a few months later, paperwork in hand, and offered $6,000 to hang a wind-power transmission line across her land. If she agreed to store construction equipment, she stood to make an additional $4,000. Ms. Coffman said no.
Ms. Coffman rotates corn and soybeans and has cattle pasture on her part of the family farm, which includes a wooded ribbon of water called Eight Mile Creek. Ms. Coffman doesn’t want to see native forest or prairie disturbed and thinks the industrial nature of towering wind turbines would change the community for the worse if a proposed project were built.
“A year ago we were a nice, quiet neighborhood,” said Ms. Coffman, who has attended a series of contentious public meetings over several months as the county considers revising regulations for wind-energy development.
County-by-county battles are raging as wind and solar projects balloon in size, edge closer to cities and encounter mounting pushback in communities from Niagara Falls to the Great Plains and beyond. Projects have slowed. Even in states with a long history of building renewables, developers don’t know if they can get local permits or how long it might take.
In Kansas, wind power grew rapidly for two decades and supplies around 45% of the electricity generated in-state, ranking it third in the nation. But at least five counties in more-populous eastern Kansas have recently placed moratoriums or bans on new wind or solar projects, joining 18 others that already restricted wind development to preserve the tallgrass prairie ecosystem. Kansas lagged behind nearly every state in large project construction and new clean power capacity last year, according to the American Clean Power Association, an industry group for wind, solar and battery storage.
President Biden’s signature legislative accomplishment, the Inflation Reduction Act, aims to make the nation’s electric grid and fuel industries cleaner. Companies have already announced plans for $150 billion in investment in renewables and battery storage in the eight months following the law’s passage, according to the American Clean Power Association.
OIL:
Construction on Willow Oil Project in Alaska Underway, an Industrial Info News Alert
Business Wire, May 9, 2023
Researched by Industrial Info Resources– Raising its guidance for full-year production, ConocoPhillips Company added that it started construction on the controversial Willow oil project in Alaska, some two months after plans were approved.
Ryan Lance, the chairman and chief executive at Conoco, touted what he said was a record level of production over the first quarter at around 1.8 million barrels of oil equivalent per day (BOE/d), compared with 1.74 million BOE/d during the same period last year, a 2.6% increase.
When adjusting for closed acquisitions, the company said production during the first quarter was actually 4% higher than during the first quarter of 2022.
Elsewhere, the company said it was pleased to have received a positive decision for its Willow oil project in Alaska, where it acquired oil and gas leases in the late 1990s.
In announcing first-quarter figures, Conoco added that it “commenced construction on the Willow project after receiving a positive record of decision from the U.S. Department of the Interior approving a development plan with three core pads.”
The federal government signed off on Willow on March 13, though its scope was scaled down significantly. Conoco had pursued five drilling sites, though the government signed off on three of those. Another 68,000 acres were erased in the government’s record of decision.
Willow will be complex. The government outlined details for everything from infield roads, an ice bridge, and an airstrip in its decision. Each of the three well pads, meanwhile, will have as many as 50 wells each.
MINING:
US to speed up South32’s Hermosa manganese-zinc project
Editor, Mining.Com, May 8, 2023
outh32’s (ASX, LON: S32) Hermosa manganese and zinc project has become the first mining asset added to the FAST-41 process, US government legislation aimed at promoting faster development of clean energy assets and other infrastructure.
Located in a historic mining district in the Patagonia Mountains of southern Arizona, the project is the only advanced mine development project in the US as of 2023 that can produce two federally designated critical minerals, South 32 says.
“The inclusion of Hermosa as the first mining project added to the FAST-41 process is an important milestone that recognizes the project’s potential to strengthen the domestic supply of critical minerals in the US,” South32 chief executive officer Graham Kerr said in a statement.
Construction and mine development at Hermosa, made up of the Taylor and Clark deposits, can now start with approvals from the State of Arizona, the company said.
POLITICS:
Devastating Alaska’s Oil & Gas Industry Won’t Help Taxpayers
David Williams, Real Clear Energy, May 8, 2023
Alaska is at a crossroads. The state is facing a challenging budget situation that has been exacerbated by inflation, COVID, and the Biden administration’s failed economic policies. Which road it chooses now will determine its economic future. One road leads to renewed prosperity. The other leads to more economic pain for consumers and taxpayers.
The Taxpayers Protection Alliance (TPA) has seen successful models for how to grow a state economy out of fiscal challenges. TPA has also seen how bad ideas can make a difficult situation much worse. A state like Alaska doesn’t always want the advice of groups from the lower 48 states. However, the currently proposed 40 percent tax on oil and gas production in Alaska is one of the most extreme examples of a disastrous idea for any state’s economy.
On paper, this tax hike might raise substantial revenue, but in the real world it would backfire and create economic and fiscal devastation. At a time when the oil and gas industry is under daily assault from the Biden administration and green activists, Alaska’s energy industry would be driven to other states and countries. The jobs, businesses, and revenue it generates – including threatening the future of critical oil drilling projects like Willow and Pikka on the North Slope – would go along with it.
Worse, the proposed tax hikes unfairly target small and medium-sized businesses that are the backbone of Alaska’s economy. These companies have been particularly important to Alaska’s economy in recent years because they are less susceptible to pressure from outside environmental groups. As larger corporations have pulled back from Alaska to avoid attacks from activists, these small and medium-sized businesses have increasingly picked up the slack and powered Alaska’s economy.
It makes no sense why Alaska would consider this act of self-sabotage. Extreme environmental activists are working to capitalize on Alaska’s budget problems and deal a major blow against energy producers in the state, eliminating critical Alaska jobs in the process. With the Biden administration already doing their bidding at the federal level, states like Alaska are the last refuge for responsible energy production.