Today’s Key Takeaways: Nuclear without the waste? Busy winter on Alaska’s North Slope! 10% jump in natural gas prices. Biden funds mining overseas instead of supporting American mines and American jobs. Failure to pass permitting reform will come back to haunt democrats – and the climate.
NEWS OF THE DAY:
Nuclear fusion “breakthrough” reportedly arrives
Ben Geman, Axios, December 12, 2022
Energy Secretary Jennifer Granholm is expected to announce a major step forward in nuclear fusion energy on Tuesday.
Why it matters: Decades of effort have gone into fusion energy, which promises almost limitless carbon-free power — without the dangerous waste from traditional fission reactors.
Driving the news: The breakthrough came in the past two weeks at the National Ignition Facility of the federal Lawrence Livermore National Laboratory in California, the Financial Times reported in a scoop.
- Granholm will announce scientists for the first time have produced “a fusion reaction that creates a net energy gain — a major milestone in the decades-long, multibillion-dollar quest to develop a technology that provides unlimited, cheap, clean power,” the Washington Post adds.
Reality check: Progress in showing conceptual viability would be just one stop on the long scientific, technical and financial road to commercializing this long-elusive holy grail.
What’s next: Granholm’s announcement tomorrow is billed as a “major scientific breakthrough.”
Go deeper: Axios’ Alison Snyder explored fusion energy earlier this year
OIL:
North Slope oil operators have a busy winter season planned
Tim Bradner, The Frontiersman, December 8, 2022
Alaska North Slope operators will have a slate of new, mostly small, projects underway in 2023 in addition to two large ones, Pikka and Willow, previously announced.
Pikka and Willow will produce substantial new quantities of oil by 2026 assuming both proceed – over 400,000 barrels per day – but smaller, near-term developments will add new oil in 2023.
Coyote, one undeveloped prospect in the producing Alpine field area, will see further appraisal drilling and initial production in 2023, according to ConocoPhillips.
No estimate of Coyote production was given.
Permitting is underway for a new production pad to support the project.
A second development, Nuna, located a few miles northwest of the Kuparuk field, will see construction of production facilities underway in 2023 with first production expected in early 2025.
Nuna, also a ConocoPhillips project, was first discovered originally by Texas-based independent Pioneer Natural Resources and layer sold to Caelus Energy, also an independent. It was acquired by ConocoPhillips in 2019.
Natural Gas Prices Surge 10% On Cold Temperatures
Alex Kimani, OilPrice.Com, December 12, 2022
U.S. natural gas futures have extended their rally, jumping nearly 10% on Monday’s session following forecasts for much colder weather as well as higher heating demand through late December than previously expected.
Colder weather is likely to force utilities to pull more gas from storage, with storage levels already ~1.5% below the five-year average for this time of year.
The cold snap is expected to start next weekend and peak right on Christmas in the bulk of the country.
Meanwhile, the deep freeze in Europe shows no signs of abating, although much of that may have already been priced in. The period from Dec 19 through Boxing Day is now tracking towards moderately higher-than-normal temperatures, which should offer some relief for TTF.
“The weekend weather data held a series of frigid cold shots advancing out of Western Canada and into the U.S. during this time frame, resulting in chilly low temperatures and strong natural gas demand nationally. What makes the pattern strongly to the bullish side is the end of the weather model runs teased cold Canadian air continuing to advance into the Lower 48, suggesting strong national demand will last through the end of the month,” NatGasWeather has said.
The January Nymex contract was up 62.7 cents to $6.872/MMBtu at around 8:50 a.m. ET. February was up 56.7 cents to $6.649. On the west coast, spot gas prices extended their recent surge to the highest in nearly two years as freezing temperatures and snow raised demand for scarce supplies of the fuel.
According to NaturalGasIntel.com, spot prices at Northern California’s PG&E Citygate reached as high as $36/MMBtu; on Friday, the highest price hit $55/MMBtu, with offers up to $60, the highest daily price since December 2000.
Two weeks ago, U.S. nat gas prices fell sharply following Freeport LNG’s announcement that the planned restart of its export plant in Texas was postponed from mid-December to the end of the year.
MINING:
Exclusive: Behind Biden’s overseas mining funding
Kaleb Holzman, Axios, December 12, 2022
The Biden administration is looking at funding roughly a dozen mineral projects overseas in a bid for more resources used in lower-carbon technologies.
Why it matters: Supporting more mining overseas could ease a raw material squeeze hurting electric vehicles, but it could also have a side effect: giving Biden’s foes fodder against him for rejecting mines at home.
Driving the news: Jose Fernandez, Under Secretary of State for Economic Growth, Energy, and the Environment, said in an interview the administration is mulling “around a dozen” mineral projects around the world for potential federal financing.
- It’s one way the administration is responding to the rapidly rising demand for EV battery minerals like lithium — an issue that’s raising prices.
How it works: This money may be distributed through the Mineral Security Partnership, a Biden program leveraging international relations to address U.S. mineral supply concerns.
- The partnership includes Australia, Canada, Finland, France, Germany, Japan, South Korea, the United Kingdom and the European Commission.
- Part of its work will include mineral projects around the world “potentially receiv[ing] financing from the U.S. and/or other MSP partners,” a State Department spokesperson confirmed.
- This includes mining, mineral processing and recycling projects.
- Federal funding will be available via two agencies: the Export-Import Bank and the Development Finance Corporation, which is already funding a nickel mining project in Brazil.
The big picture: Unless something drastic changes, the world would need to mine a lot more to rid itself of fossil fuels.
- EVs and solar panels rely on unique metals produced in only a few places. Most of the supply is currently controlled by China.
- Tech innovation and recycling won’t be enough to resolve this — at least not as fast as scientists recommend we cut carbon emissions.
- Some of these minerals, like graphite, are hard to find in the United States, per E&E News.
What they’re saying: Fernandez said the program “is what we believe is the best way to address” the problem that “we’re going to need an exponential amount of rare earths and critical minerals, above what we have today.”
- The program’s success will mean “raising the level of investment and [doing] it in a way that benefits these countries and would be sustainable.”
Of note: The partnership is talking with American carmakers, including Ford, General Motors, Rivian and Tesla.
POLITICS:
The biggest missed opportunity of the lame-duck Congress so far
Colin Mortimer, Vox, December 12, 2022
Why Congress’s failure to pass permitting reform could come back to haunt Democrats — and the climate.
The current Democratic trifecta is coming to a close, and Republicans will be taking back power in the House this January. The lame-duck Congress looks to be productive, but one item that has been dropped from its to-do list may come back to haunt Democrats.
Permitting reform — a push by Sen. Joe Manchin (D-WV) to change the way big infrastructure projects that involve federal dollars are approved — was a notably divisive proposal that supporters had hoped would pass in the lame duck. But after progressives who opposed the bill, along with top Republicans, united to torpedo it, Democrats decided to pull the proposal out of a must-pass defense bill, essentially killing it. It was a personal loss for Manchin but a potentially bigger one for a key Democratic priority: building out a clean energy infrastructure, and fast.
Federal permitting reform’s defeat takes place in the shadow of the passage of the Inflation Reduction Act (IRA), perhaps this Congress’s signature achievement. Passed in August, the IRA is the largest clean energy investment in American history. On paper, the bill will help cut American emissions by 40 percent from 2005 levels by the end of the decade, through a suite of tax provisions such as credits for people getting solar panels, incentives for electric vehicles, and federal loans to help construct clean energy sources.
But as it stands, the IRA will be hard-pressed to accomplish its stated goals — and that’s thanks primarily to a 50-year-old law called the National Environmental Policy Act (NEPA), the “Magna Carta’’ of federal environmental laws.