Today’s Key Takeaways: Plans for EV growth scaled back in the short term. 48 oil supertankers on their way to U.S. Gas pipeline shortage a threat to U.S. economy. Expansion targeted at AK’s Whistler Gold-Copper project. House passes Interior appropriations bill with significant cuts and efforts to reign in agencies powers and rulemaking.
NEWS OF THE DAY:
Bumps in the road for EVs | Wood Mackenzie
Ed Crooks, Wood Mackenzie, November 6, 2023
Manufacturers have been scaling back plans for growth. But the long-term trend is still towards electrification
The 1970s and 80s were brutal decades for the big American car companies. Between 1970 and 1990, General Motors, Ford and Chrysler’s combined share of the US car and light truck market fell from 82% to 71%. Over the same period, the combined market share for Toyota, Honda, Nissan, Mazda, and Mitsubishi rose from 4% to 22%.
The US manufacturers were caught with high costs and fuel inefficient models that fell out of favour as gasoline prices soared and struggled to respond to consumers’ demands. The average fuel economy of light vehicles sold in the US improved from 13.1 miles per gallon in 1975 to 22 MPG in 1987.
Now questions are being raised about whether the transition to electric vehicles might be a similarly bruising experience for incumbent manufacturers. The big car companies have committed to switching to EVs. General Motors said in 2021 that it had an “aspiration” to eliminate tailpipe emissions from its new light-duty vehicles by 2035. Ford said the same year that it expects 40%-50% of its global vehicle sales to be fully electric by 2030.
Since then, however, the problems have been piling up for EVs. In their third quarter earnings reports last month, both GM and Ford reported that EV sales had been disappointing. Mary Barra, GM’s chief executive, said in her letter to shareholders that the company was “moderating the acceleration of EV production in North America to protect our pricing, adjust to slower near-term growth in demand, and implement engineering efficiency and other improvements that will make our vehicles less expensive to produce, and more profitable.”
OIL:
More oil supertankers than ever are headed for the US to load up on crude for export as OPEC+ curbs supply
Aruni Soni, Yahoo!Finance, November 6, 2023
- A record 48 oil supertankers are making their way to the US, Bloomberg reported.
- US crude oil production and exports are booming, while OPEC+ countries have curbed oil supply.
- US oil exports hit 3.99 million barrels a day in the first half of 2023, according to the EIA.
US crude oil production is booming, reeling in a record-high number of supertankers to fill up at the Gulf Coast for export to markets around the world.
According to data compiled by Bloomberg, 48 vessels are bound for the US in the next three months — the most in at least six years.
That comes as top OPEC+ producers Saudi Arabia and Russia have been slashing production to inflate oil prices. Then last month, possible spillover effects of the Israel-Hamas war has had traders biting their nails over the risk of increased tightness in oil production.
Meanwhile, US crude production hit an all-time high of 13.2 million barrels a day last month, and exports are at the highest levels since restrictions were lifted in 2015.
According to a report from the Energy Information Administration in October, US oil exports clocked in around 3.99 million barrels per day for the first half of 2023.
An analyst who spoke with Bloomberg said that shipments from the US Gulf Coast are expected to rise to 4.1 million barrels a day next month, 100,000 barrels more than December last year.
The US has been exporting more of its “light, sweet” crude oil overseas, keeping the heavier grades for use back home.
The EIA report from last month pointed out that the US still imports more oil than it exports. Even though US crude oil production is booming, many US refineries are built to work with “heavy, sour” crude oil.
GAS:
Gas Pipeline Shortage Threatens U.S. Economy
Irina Slav, OilPrice.Com, November 6, 2023
- The United States became the world’s largest natural gas producer in a matter of years.
- Daley Capital: U.S. LNG exports could double to 26 billion cu ft daily by 2030.
- The industry has been complaining of obstacles being put in the way of new gas pipelines for years.
The United States became the largest natural gas producer in a matter of years, also turning into one of the top three LNG exporters. Gas production and demand are both on the rise, and the EIA projects that output will hit a record high this year.
At the same time, however, the infrastructure necessary to bring this gas from the producer to the consumer has been slow to catch up with demand. The reason: political opposition that, the industry says, could have a negative impact on the U.S. economy.
Last month, a senior executive from Williams, the natural gas transport major, told Energy Intelligence that regulatory rules are stifling the necessary expansion of the nation’s gas pipeline network. And he wasn’t the only one.
MINING:
U.S. Goldmining Targets Expansion At The Whistler Gold-Copper Project, Alaska
Junior Mining Network, November 7, 2023
U.S. GoldMining Inc. (NASDAQ: USGO) (“U.S. GoldMining” or the “Company“) is pleased to provide an update on the Company’s 2023 Phase 1 drilling program (the “Program“), which commenced in August this year. The objectives of the Program are to expand and increase confidence in the existing gold-copper deposits at the 100% owned Whistler Gold-Copper Project (“Whistler” or the “Project“) in Alaska, USA, and to test prospective exploration targets in close proximity to known resources.
Phase 1 Drilling Program Highlights:
- Three drill holes have been completed for a total of 1,674 meters at the existing Whistler Deposit (as defined below), the namesake and the largest resource within the overall Project.
- Drilling at the Whistler Deposit was designed to test the southern extents of the porphyry mineral system, improve the geological model, and collect new geometallurgical and geotechnical information.
- Assays are pending for all drill holes. The Company expects to release assay results as they become available. Core from the first three drill holes has been logged and sampled on-site by the geological team and samples sent to an independent laboratory for analysis. Estimated laboratory turnaround times are approximately six weeks upon receipt of samples.
- The Company has recently commenced drilling of the Rainmaker South target, a new potential porphyry mineral system located approximately 1 kilometer southeast of the Whistler Deposit. The Rainmaker South target was developed by reprocessing geophysical data and from compilation of historic drilling.
Tim Smith, Chief Executive Officer of U.S. GoldMining, commented: “We are excited to have a drill turning on the Whistler Project. Our technical team is rapidly developing our geologic understanding of the Project, which is allowing us to better target extensions and delineate higher-grade zones within the existing Whistler Deposit. Along with the known deposits, we have also identified multiple look-a-like exploration targets within our large 100% owned package of State mining claims. I am proud of the ongoing hard work by our team as we continue our inaugural drilling program and look forward to providing results as they become available.”
POLITICS:
REVIEWING THE GOP AMENDMENTS: The House passed the Interior and Environment appropriations bill on Friday with over 100 amendments added to the bill – a number of them being controversial riders that aim to make even further cuts than what the bill originally proposed, while also reining in the agencies’ powers and rulemaking.
The $34.8 billion bill – which funds the Interior Department, the Environmental Protection Agency, and a number of related agencies – would already make a 39% funding cut to the EPA, slash Inflation Reduction Act act programs meant to help fight pollution and climate change and cut the National Park Service budget by 13%. But the bill’s amendments take it a step further with deeper cuts and targets the agencies’ rules.
If you blinked and weren’t able to catch some of those riders, here’s a rundown of a few that caught our eye:
- Several amendments aim to decrease funding for specific agencies. One provision from Virginia Republican Rep. Morgan Griffith cuts the Bureau of Land Management’s Wild Horse and Burro program by $74.2 million – bringing funding back to fiscal 2019 levels. Another amendment from GOP Reps. Scott Perry and Jeff Van Drew would reduce funding by $28 million for the Bureau of Ocean Management’s Office of Renewable Energy Programs. A rider from Republican Reps. Bruce Westerman and Rep. James Moylan would decrease funds for the Council on Environmental Quality by $2.75 million.
- A number of provisions would prevent agencies from issuing new rules without congressional approval. For example, Republican Rep. Randy Feenstra’s amendment would require the agency to not promote any new rules affecting over 50% of American farmland without congressional approval. Another amendment from GOP Rep. Garret Graves would prevent the use of the bill’s funds to issue new major rules, if the Office of Management and Budget determines the rule would have a negative impact on the economy or interfere with U.S. international competitiveness.
- A number of amendments would reverse the Biden administration’s rulemaking in various agencies. For example, one amendment from Republican Rep. Lauren Boebert would prevent officials from implementing the Biden administration’s rules under the Endangered Species Act that would expand further protections to species. The proposed rules – which were announced back in June – would extend the same protections given to endangered species to those listed as threatened, remove language allowing agencies to weigh economic factors when determining whether to list a species, and streamline the federal interagency consultation process.
- Another amendment from GOP Rep. Andrew Clyde would prohibit the BLM from implementing a rule creating protections for more than 13 million acres in the National Petroleum Reserve in Alaska, and prohibits the cancellation or suspension of oil and gas leases.
- A rider from conservative Reps. Chip Roy, Kat Cammack, Josh Brecheen, Ralph Norman, and Troy Nehls would reverse any of President Biden’s executive orders on climate change. Another amendment from Norman would prohibit funding for the administration’s newly-created American Climate Corps, an initiative that aims to employ tens of thousands of young people to fight climate change.
- An amendment from Rep. John Rose would prohibit the implementation of any plastic straw prohibitions. Read more about that from our own Cami Mondeaux.
As for the amendments that didn’t make it in…: During last week’s debate on the bill and its amendments, appropriations subcommittee ranking member Rep. Mike Simpson objected to a number of provisions from conservative members of his own party that would propose even further cuts to the bill.
In one instance, Rep. Harriet Hageman proposed an amendment that would reduce BLM funding by 50% – to which Simpson stood up in opposition, saying that it would “put the agency in a position where they cannot carry out critical activities to address their most pressing issues in Western states.”
The measure failed by a recorded vote 144-280.
Simpson also advised against amendments from Perry that would eliminate funding for the National Endowment for the Humanities and National Endowment for the Arts, both of which failed during a floor vote. Another measure that Simpson opposed was from Rep. Mike Collins, which would defund the Council on Environmental Quality and transfer the money to the National Parks Service for construction activities. (This measure also failed.)
“I believe that the CEQ has a valuable role to play in leading efforts to strike a balance in ensuring our environment is protected while also promoting economic development and job growth,” Simpson said during his floor remarks.
From the Washington Examiner, Daily on Energy, November 6, 2023