Buyer Beware Venture Global? Willow Wins!! Nuclear’s Bad Day

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Today’s Key Takeaways:   Alaska Willow project to be produced under more stringent environmental protections than elsewhere in the world. Oil demand competing views. Venture Global LNG accused of reneging on contracts. Demand for Alaska graphite growing. Death of small micro nuclear reactors over-exaggerated.    


Alaska judge sides with company on new $7.5 billion oil project
Jennifer Dhlouy, Bloomberg, November 10, 2023

A federal judge upheld the Biden administration’s approval of ConocoPhillips’ 600-million-barrel Willow oil development in Alaska, a blow to environmentalists who argued it would imperil wildlife and exacerbate climate change.The ruling by Alaska-based U.S. District Judge Sharon Gleason means ConocoPhillips can continue developing the $7.5 billion project in the National Petroleum Reserve-Alaska that promises to eventually yield some 180,000 barrels of oil per day.

While equipment is being fabricated at Gulf Coast facilities, ConocoPhillips is preparing to resume on-site work during Alaska’s short, winter-operating season that could begin as soon as December 2023.

At issue is the Interior Department’s March approval of the controversial Willow project following a fierce lobbying battle, an opposition campaign that went viral, and fraught deliberations inside the administration, where the issue was seen as testing President Joe Biden’s campaign commitments to combat climate change.



OPEC Says Demand Concerns Are Overblown As Fundamentals Stay Strong
Tsvetana Paraskova, OilPrice.Com, November 13, 2023

Oil Prices Fall As Traders Focus On Demand Concerns
Irina Slav, OilPrice.Com, November 13, 2023


Venture Global Accused of Reneging on LNG Contracts for Europe
Akshat Rathi, Bloomberg/Rigzone, November 13, 2023

European oil majors have asked a cross-Atlantic government task force to intervene in a dispute with Venture Global LNG Inc., warning that the US supplier “reneging” on contracts to supply liquefied natural gas threatens Europe’s energy security and undermines the US as a reliable supplier.

In separate letters, Shell Plc and BP Plc accuse Venture Global of “misconduct” for withholding fossil-fuel cargo agreed under long-term contracts and instead opting to sell LNG on the spot market at higher prices. The letters Bloomberg News has seen were sent by the companies in October to an energy-security task force set up by the US and European Union.

Venture Global responded on Nov. 10, saying that the accusations are “false” and that a request for governments to interfere in agreements among private companies is “outrageous.” 

The FT first reported on the letters. It cites another from Italy’s Edison SpA claiming Venture Global stands to gain $17.5 billion from short-term market sales, compared to $2.8 billion under long-term contracts, according to a Wood Mackenzie report.

Venture Global said the “highly coordinated attack” by the European energy industry is an attempt to “modify their contracts and stifle competition” in the global LNG market.


Proposed graphite mine in Alaska’s Bering Strait regions pursues boosted production plan
Yereth Rosen, Alaska Beacon, November 10, 2023

If it is to be developed into a mine, the biggest deposit of graphite in the United States needs a bigger production project than developers originally envisioned, said an official with the company seeking to commercialize the site. To be cost effective, he said, development needs to meet the soaring demand for the material that is used in lithium-ion batteries and other high-tech products.

Mike Schaffner, senior vice president for Graphite One, said the Vancouver-based company trying to develop the Graphite Creek deposit 38 miles north of Nome is now trying to figure out how to design a big enough project at the remote Bering Strait site to be economically feasible.

A previous design concept for production, as described in a prefeasibility study issued in 2022, envisioned production of 53,000 tons per year of graphite concentrate, Schaffner said in a presentation Wednesday at the annual conference of the Alaska Miners Association in Anchorage.

“They said, ‘Well, that‘s great. But we need 20 of you.’ So it wasn’t big enough to really pique their interest,” he said.


Making Sense of Nuclear’s Bad Day
Ben German, Axios, November 13, 2023

It’s easy to over-interpret the death of small modular reactor firm NuScale’s Idaho project, but it nonetheless has lessons — and omens — for the future.

Catch up fast: Utah Associated Municipal Power Systems and NuScale last week said there weren’t enough buyers for the project’s increasingly costly energy.

What they’re saying: Energy analyst Todd Moss notes first-of-a-kind projects are always costly.

  • That’s true even though SMRs promise standardized manufacturing to prevent huge cost overruns that bedevil traditional reactors.
  • “But getting to scale means getting over the early humps. This first hump proved too much,” Moss, executive director of the Energy for Growth Hub, wrote on Substack.

The intrigue: Bloomberg’s Liam Denning writes that amid surging renewables and storage, the SMRs use case may narrow to industrial energy, with grid-focused output a lesser focus.

Threat level: NuScale has the only SMR design with Nuclear Regulatory Commission approval.

  • Nuclear critic Edwin Lyman, of the Union of Concerned Scientists, said the Idaho project’s demise shows “broader challenges” for U.S. development. 
  • It “does not bode well for the dozens of other, more exotic reactor types in various stages of development that are being touted as the next best thing.”

Yes, but: Moss said a “vibrant nuclear ecosystem exists,” citing the many startups and projects somewhere in the pipeline — and he’s confident some will survive.

  • “[F]lexible nuclear power will still be attractive in some emerging markets,” like Ghana, one of NuScale’s target regions.
  • Third Way, working with Moss’ group, tracks projects worldwide.