Today’s Key Takeaways: 25th Cook Inlet lease sale opens December 12th. Oil could break $100 when Russian embargo goes into effect. Jack Daniels and 3 Rivers Energy partnering on renewable natural gas and commercial fertilizer project. Minerals are highly efficient use of space with tiny environmental footprint compared to agriculture. G20 nations spent $693B in 2021 supporting fossil fuels.
NEWS OF THE DAY:
Bidding In The Special Cook Inlet Oil & Gas Sale Opens Dec. 12
KSRM, October 31, 2022
The Alaska Division of Oil and Gas is formally noticing an oil and gas lease sale for the available State acreage in the Cook Inlet region. Bidding will open Dec. 12, 2022, and bid results will be published on Dec. 30.
This sale is the 25th State Cook Inlet Areawide sale and will overlap with the federal Cook Inlet outer continental shelf oil and gas lease sale from the U.S. Department of the Interior’s Bureau of Ocean Energy Management.
“We are offering this special State Cook Inlet lease sale at the end of the year to coincide with the federal sale for the benefit of potential bidders and in accordance with our constitutional duties,” said DNR Deputy Commissioner John Crowther. “The basin still holds significant potential and an important step to unlocking it is to consistently offer open acreage to explorers.”
The State Cook Inlet Areawide sale will make available 2.8 million acres on 721 tracts. This includes leases that are adjacent to the federal government’s Lease Sale 258 blocks in the offshore waters of lower Cook Inlet. Industry lessees currently hold 424,000 acres on 207 leases within the State’s Cook Inlet Areawide. One hundred and six leases, encompassing more than 65,000 acres, are currently in production and paying royalties to the State.
Further details are available on the Division of Oil & Gas website.
OIL:
IEF: EU Embargo Could Send Oil Prices “Well Above $100”
Tsvetana Paraskova, OilPrice.Com, November 1, 2022
- The International Energy Forum believes the price of Brent could easily break above $100 when the EU embargo on Russian oil comes into effect.
- The IEF believes the oil market could lose anywhere between 1 million and 3 million barrels per day when the sanctions take effect.
- The secretary general of the IEF emphasized that physical markets are very tight while paper markets are pricing in bad economic news.
Brent crude prices could easily break above $100 per barrel again if losses of supply from Russia are close to 3 million barrels per day (bpd) when the EU embargo on Russian crude imports by sea enters into force next month, the Riyadh-based International Energy Forum (IEF) thinks.
The IEF and many consuming countries, not only the United States, are concerned about what will happen to the oil market when the EU sanctions kick in, Joseph McMonigle, secretary general of the IEF, told Bloomberg TV in an interview on the sidelines of the ADIPEC energy conference in Abu Dhabi.
According to the IEF, the world’s largest international organization of energy ministers, the oil market could lose anywhere between 1 million bpd and 3 million bpd of oil supply from Russia when the sanctions take effect.
In recent months, there have been many predictions and a lot of speculation about what might happen with the embargo, but “This is when you’ll actually see Russian barrels come off the market,” IEF’s McMonigle told Bloomberg.
“Maybe Russia will figure a way around it, but not at first,” McMonigle added.
If 3 million bpd of Russian oil is lost, Brent Crude will easily break $100 a barrel, he said.
There will be a lot of volatility as the embargo begins because there will not be much transparency about the actual number of Russian barrels coming off the market, according to McMonigle.
So Brent prices could go “well above $100” with a lot of volatility, which is not good for the market, he said.
Early on Tuesday, Brent was up by 2% at $94.74 as of 8:55 a.m. ET as the U.S. dollar weakened today.
Commenting on the current market situation, McMonigle told Bloomberg, “The physical markets are very tight. The paper markets are pricing in bad economic news and a recession.”
GAS:
LYNCHBURG, Tenn., Nov. 01, 2022 (GLOBE NEWSWIRE) — 3 Rivers Energy Partners is launching a new sustainability project with Jack Daniel’s that represents a significant leap into the future of both the distiller and renewable energy industries.
The project is expected to produce between 900,000 – 1,100,000 mmbtus of RNG annually while simultaneously lowering the overall energy usage of the Jack Daniel Distillery.
3 Rivers Energy Partners has partnered with TC Energy to utilize the Jack Daniel Distillery’s spent distillers grains to create an immense amount of renewable natural gas (RNG) and natural commercial fertilizer by feeding the spent distillers grains from the distillery into anaerobic digesters.
This process allows Jack Daniel’s to utilize their corn to its fullest potential, completing the nutrient life cycle of the corn used to make whiskey by producing a nutrient-rich natural commercial fertilizer that can be used to replenish the surrounding farmland.
According to the US Energy Information Administration, the expected volume of renewable natural gas is enough to heat over 10,000 homes in Tennessee. The fertilizer created from this project could potentially support up to 43,000 acres of farmland, primarily in Moore, Coffee, and Franklin counties.
We expect this to benefit over 400 Tennessee small family farms and for those benefits to ripple throughout the rural economy. Our discounted natural fertilizer avoids about $220 per acre of commercial fertilizer cost at today’s prices which results in nearly $7 million annually of direct regional economic benefit created from fertilizer cost savings for local crop farmers.
“Our goal is to help Jack Daniel’s create a sustainable future for their company, community, and the planet. With this process, we can reduce operational energy consumption, create renewable energy, help sustain local agriculture, and benefit the families of rural Tennessee. It is truly a full circle sustainability approach,” said John Rivers, CEO of 3 Rivers Energy Partners.
MINING:
It’s Better to Mine the World’s Rainforests Than Farm Them
David Fickling, Bloomberg, October 30, 2022
Minerals are a highly efficient use of space, and represent a tiny environmental footprint compared to agriculture.
As if the world’s rainforests didn’t have enough problems to contend with, even the transition to zero-carbon power is threatening to level them.
Industrial mining ate up 3,265 square kilometers (1,260 square miles) of tropical forest between 2002 and 2019, according to a recent study in the Proceedings of the National Academy of Sciences. Some 80% of that total happened in just four countries: Indonesia, Brazil, Ghana, and Suriname.
With the COP27 climate conference in the Egyptian resort of Sharm El Sheikh next week expected to increase the focus on the climate needs of developing countries, that’s raised concerns that there isn’t enough land to manage a shift away from fossil fuels.
Much of the world’s reserves of nickel, an essential metal for making electric-vehicle batteries, lie under the rainforests of Southeast Asia. Some 6,732 sq km of Indonesian forest has been granted to nickel mining concessions, a coalition of environmental groups wrote in a July letter to Tesla Inc.
An “honest and comprehensive evaluation of the entire life cycle of clean energy” cars would show a “negative societal and environmental impact” on land, Michael Heberling, an academic at Michigan’s Baker College, noted this year.
POLITICS:
G-20 Spent Nearly $700B Supporting Fossil Fuels In 2021
Aaron Clar, Rigzone/Bloomberg, November 1, 2022
The Group of 20 nations spent $693 billion supporting the fossil fuel industry last year, slowing progress towards global climate goals, according to a report released by Bloomberg Philanthropies and BloombergNEF on Tuesday.
The money from governments and state-owned institutions “distorted prices, encouraged potentially wasteful use and production of fossil fuels, and resulted in investment into long-lived, emission-intensive equipment and infrastructure,” BNEF analysts Victoria Cuming and Maia Godemer wrote in the Climate Policy Factbook: COP27 Edition.
The aid for oil, gas, coal, and fossil-fuel power rose 16% from 2020 and was the highest since 2014, according to the provisional estimates.
Setting a carbon price that forces companies and consumers to pay for their emissions is a crucial step toward meeting Paris Agreement commitments, but most efforts haven’t been effective because prices are too low or concessions offered to polluters too generous, according to the report. Governments must also enforce climate-risk disclosure from companies and financial institutions.
The increased funding was driven by retail energy price subsidies, tax breaks and budgetary transfers. Although the share of G-20 support for the dirtiest fossil fuel, coal, is shrinking — it fell to 2.9% last year from 4.1% in 2016 — it still attracted $20 billion worth of aid in 2021. China accounted for the largest share of G-20 fossil fuel support in 2020, a trend that probably extended into last year, according to BNEF, which hasn’t yet released country-level data for this year.
Despite announcing a range of ambitious commitments to phase out fossil fuel subsidies G-20 and G-7 members “always seem to include imprecise language and caveats, giving governments wiggle room to interpret these pledges as they wish,” Cuming said in a separate statement. Bloomberg Philanthropies is the philanthropic organization of Michael Bloomberg, the founder and majority owner of Bloomberg LP, which owns Bloomberg News and BNEF.
The analysis comes ahead of the global climate summit COP27 that starts Nov. 6 in Egypt. Negotiations there are expected to focus on how to meet emissions pledges and targets announced at the previous year’s conference in Glasgow last year.