Today’s Key Takeaways: Russia averages $977m per day in fossil fuel exports despite bans. How can the oil industry respond to the “Great Crew Change” and the Great Resignation”? Collapse of Chinese imports of U.S. LNG. Southcentral AK project shows high quality gold, zinc, copper and more! AK Supreme court decision keeps Sweeney off ballot.
NEWS OF THE DAY:
Who’s still buying fossil fuels from Russia?
Visual Capitalist, June 22, 2022
The largest importers of Russian fossil fuels since the war
Despite looming sanctions and import bans, Russia exported $97.7 billion worth of fossil fuels in the first 100 days since its invasion of Ukraine, at an average of $977 million per day.
So, which fossil fuels are being exported by Russia, and who is importing these fuels?
The global energy market has seen several cyclical shocks over the last few years.
The gradual decline in upstream oil and gas investment followed by pandemic-induced production cuts led to a drop in supply, while people consumed more energy as economies reopened and winters got colder. Consequently, fossil fuel demand was rising even before Russia’s invasion of Ukraine, which exacerbated the market shock.
Russia is the third-largest producer and second-largest exporter of crude oil. In the 100 days since the invasion, oil was by far Russia’s most valuable fossil fuel export, accounting for $48 billion or roughly half of the total export revenue.
OIL:
Attracting next generation of professionals is ‘tricky’
Mella McEwen, MRT.com/Midland Reporter-Telegram, June 25, 2022
Concerns about the ‘Great Crew Change’ that began as the shale revolution took off are combining with concerns about the “Great Resignation” of the pandemic era and how companies will meet their staffing needs.
Oil companies have an additional challenge of attracting the next generation of professionals as they work to overcome public perceptions about the environmental impact of fossil fuels.
“It can get tricky,” acknowledged Vince Dawkins, chief executive officer and president of Enertia Software.
Speaking with the Reporter-Telegram by telephone, Dawkins advised energy companies to “dive into” those concerns.
If the concern is about oil and gas “going away,” he suggested asking the applicant about their car, what appliances they have in their home and point out all the things that are dependent on oil and gas to emphasize that oil and gas isn’t going away soon.
“Ask questions, provoke thought,” he suggested.
Those just coming out of college or who are early in their careers have different viewpoints and ideas that can be valuable, he added. It’s not thinking outside the box, he said, but “hopefully start to widen the box.”
Enertia is a software company specializing in serving the upstream sector of the energy industry, and Dawkins said technical skills have become as important as reservoir engineering, a production foreman or accountant.
Adequate staffing is difficult now because the labor market is shrinking, Dawkins said. And he offered a warning for operators to prepare for the years ahead.
“I do see a cycle of the labor market shrinking and then beginning to expand again,” he said. “Oil companies would be smart to prepare – put things in place to be ready for the onslaught.”
Have the mindset of continually looking for the best talent rather than trying to hire in waves, he continued. And look for new hires that don’t necessarily have the best experience but fit into the corporate culture, challenge the system, and bring new ideas that will improve the company, he said.
Retaining staff is also super valuable, Dawkins said. Employers seeking to retain talented staffers must be competitive not just in salaries but in the challenges the jobs offer and the growth potential of those jobs. He said employers must make sure to have regular conversations with their staffs about what drives them in their position and what they want from the work.
GAS:
Why Chinese Imports Of U.S. LNG Collapsed
Tsvetana Paraskova, OilPrice.Com, June 25, 2022
- Chinese imports of LNG from the U.S. plunged by 95% between February and April.
- Most U.S. LNG spot cargoes were headed to Europe at the beginning of 2022.
- Russia could become too dependent on China for its gas sales.
As European LNG buyers are snapping up cargoes from the United States in a race to replace Russian pipeline deliveries, America has become a major supplier to Europe, and its sales to China have dwindled to just a few cargoes shipped so far this year. Chinese imports of LNG from the U.S. plunged by 95% between February and April compared to the same period in 2021. Meanwhile, Chinese imports of LNG from Russia jumped by 50%, according to Chinese customs data cited by The Wall Street Journal.
That’s a major shift in U.S. LNG shipments to China. The United States was the largest supplier of spot LNG volumes to China last year, the EIA said last month.
So far this year, the United States has sent the occasional LNG cargo to China, but most exports have headed to Europe, which is paying more for spot LNG supply.
In April 2022 alone, five European countries—France, Spain, the UK, the Netherlands, and Poland—accounted for 54.1% of total U.S. LNG exports, data from the U.S. Energy Department showed last week.
The European Union and the UK saw a record high level of LNG imports in April, as higher spot prices in Europe compared to Asia attracted suppliers with destination flexibility to ship LNG to Europe. Those suppliers were mostly from the United States, the EIA said earlier this month.
The Russian invasion of Ukraine and Europe’s resolve to kick its Russian energy addiction are changing global energy flows, not only in oil but also in gas.
Europe is pricing out Asia for spot deliveries and is turning to LNG, mostly from America, to cut its still heavy dependence on Russian gas. At the same time, China is buying more LNG from Russia, which the West doesn’t want to touch. High spot LNG prices and lackluster demand due to China’s zero-COVID lockdowns have significantly reduced Chinese appetite for U.S. LNG this year.
Yet, scarce LNG imports from the U.S. in China will not persist for years to come because Chinese state majors and other energy firms have been signing long-term deals with American exporters in recent months. Some of those LNG deliveries will begin as soon as 2022 and 2023.
Nevertheless, the global energy trade flows are changing, and they are changing for good. Europe will not return to Russian energy and is on an irreversible path to cut off dependence on Russia’s oil and gas, sooner for oil than for gas.
Banned, sanctioned, and shunned in the West, Russia is now looking East to sell its energy. Analysts warn, however, that Russia—having no other choice—could become too dependent on China, especially for its gas sales. Moreover, the pipeline and LNG volumes Russia is sending to China are just a fraction of Russian pipeline exports to Europe, even as Russia has slashed gas supply to Europe in the past weeks.
Russia is already sending natural gas via pipeline to China through the Power of Siberia pipeline, which became operational at the end of 2019. There are plans for another major gas pipeline to deliver gas from Russia to China, but this will take years to complete and commission.
The European gas market remains far bigger and far more lucrative, says Nikos Tsafos, the James R. Schlesinger Chair in Energy and Geopolitics at the Energy Security and Climate Change Program at the Center for Strategic and International Studies (CSIS).
“Russia could eventually build a sizable business geared toward Asian markets, but the shift will be neither immediate nor easy, and it will depend critically on foreign partners, including China,” Tsafos wrote in an analysis last month.
“To secure a contract with China, Russia had to offer a bargain deal: China pays far less for Russian gas than Europe does,” he added.
MINING:
Testing shows good JT metals recovery
Shane Lasley, North of 60 Mining News, June 24, 2022
HighGold Mining Inc. June 22 reported that testing shows that conventional metallurgical techniques yield very high-quality copper, zinc, lead, and gold concentrates from the JT deposit on its Johnson Tract project in Southcentral Alaska.
According to a calculation completed prior to the start of 2020 drilling, the JT deposit hosts 2.14 million metric tons of indicated resource averaging 6.07 grams per metric ton (417,000 ounces) gold, 5.8 g/t (397,000 oz) silver, 5.85% (275.3 million pounds) zinc, 0.57% (26.8 million lb) copper, and 0.71% (37.6 million lb) lead.
Using a composite sample of the dominant JT deposit mineralization, Blue Coast Research Ltd. completed the metallurgical work.
HighGold reports that locked cycle flotation tests with a coarse primary grind yielded very high-quality copper, zinc, lead, and gold concentrates with very good metal recoveries. These concentrates have very low impurities and negligible penalty elements.
Highlights include:
• Gold recovery of 97.2% combined total of payable gold to concentrates and leaching of tails.
• Zinc recovery of 92.3% to a concentrate grading 52.6% zinc.
• Copper recovery of 84.5% to a concentrate grading 30.6% copper.
• Lead recovery of 72.4% to a concentrate grading 62.1% lead.
• Gold pyrite concentrate grading 64.3 g/t gold.
POLITICS:
Alaska Supreme Court Ruling Keeps Sweeney off House Ballot
Associated Press, June 25, 2022
The Alaska Supreme Court on Saturday upheld a lower court’s ruling that will keep Republican Tara Sweeney off the ballot for the August special election in Alaska’s U.S. House race.
In a brief written order, the high court said it affirmed the decision of Superior Court Judge William Morse, who agreed with a decision by Division of Elections Director Gail Fenumiai to not advance Sweeney, the fifth-place finisher in the June 11 special primary, to the special election after the third-place finisher suddenly dropped out.
The court did not elaborate on its reasoning but said a full opinion will follow at a later date. Morse on Friday ruled in favor of the elections division. The decision was appealed by the plaintiffs in the case.
Forty-eight candidates ran in the special primary for Alaska’s House seat, which was left vacant by the death in March of Republican Rep. Don Young, who held the seat for 49 years.
The special primary was the first election held under a system approved by Alaska voters that ends party primaries and institutes ranked choice voting in general elections.
In this case, the top four vote-getters due to advance to the special election were Republicans Sarah Palin and Nick Begich, independent Al Gross and Democrat Mary Peltola. That changed when Gross abruptly withdrew Tuesday.
Fenumiai had said that because Gross withdrew less than 64 days before the scheduled Aug. 16 special election, state law did not permit the division to put the fifth-place candidate on the ballot in his place.
On Thursday, three voters sued to have Sweeney put on the ballot, claiming elections officials misinterpreted the law and that the timeline to withdraw did not apply to special elections.
Messages sent to three attorneys representing the plaintiffs were not immediately returned to The Associated Press on Saturday.
“The law was clear, and I’m pleased the courts affirmed such. Now, it’s time to take our campaign to the voters in the general election and earn their support,” Begich said in an email to the AP.
Peltola said her campaign was “focused on our own race.”
“We’ll let the Republicans sort themselves out,” she said in an email to the AP.
Sweeney said in a statement that she was disappointed not to be among the four to advance in the special election to serve the remainder of Young’s term, but she was still running in an August regular primary and November general election to determine who will serve a new, two-year term, starting in January.
“Alaska politics has a history of comeback stories, and I look forward to writing the next chapter by fighting to represent Alaska,” she said.
The Palin campaign did not immediately return a request for comment.
The division will finalize the ballot design this week, as scheduled, said Department of Law spokesperson Patty Sullivan. Judges saw that the law allows only the top four candidates to advance unless someone withdraws by the deadline, she said, and Gross “simply withdrew too late.”
Attorneys for the state said in court filings that while the division was “sympathetic to the public expectation” that under the new system four candidates would advance, “it lacks the discretion to relax an unambiguous statutory deadline to effectuate this goal.”
Morse in his written order said the timeline under which a substitution could occur in this situation “could hardly be briefer.” But he wrote, “that is the period set by statute and the one the Division must apply.”
Sweeney’s campaign did not sue over the issue, but she had said that she believed she should be moved into fourth place and that voters should have four candidates to choose from.