Can Boom keep Booming? What’s Up Buttercup? LNG the next Keystone?

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Today’s Key Takeaways: AK Governor introduces legislation to reduce energy costs for ratepayers. Can U.S. oil boom keep booming? Is LNG the next Keystone pipeline? Desperate attempt to delay Graphite One project. Energy provisions in border deal bill.


Governor Dunleavy Legislation to Increase Competition and Reduce Energy Costs for Ratepayers
Jessica Bowers, Alaska Native News, February 3, 2024

Friday, Governor Mike Dunleavy introduced legislation to benefit electricity ratepayers by increasing the efficiency of transmission system charges, prioritizing the lowest-cost power, and encouraging the development of new power generation, including renewable energy. 

 “Currently, there are electrical tariffs on the Railbelt system that stand in the way of transmitting the lowest-cost power,” said Governor Dunleavy. “This legislation would eliminate these tariffs and transform the system into a public highway rather than a series of toll roads. This would lower costs for ratepayers and create new opportunities for independent power producers.”

 HB307 (SB217)improves how electricity transmission costs are managed in Alaska. These regulatory measures would eliminate the current method of charging per-unit wholesale transmission fees and instead would require the Regulatory Commission of Alaska (RCA) to create a system that will allow for the economic dispatch of the lowest-cost power at all times. It will also provide fair and reasonable cost recovery for the utility companies and clarifies which electric utility transmission assets are subject to this system.

 Additionally, HB307 (SB217)creates a level playing field for power generation by giving Independent Power Producers (IPP) the same exemption from local taxes that nonprofit electric cooperatives already receive. 

 As recommended by the Alaska Energy Security Task Force, the elimination of transmission-related wheeling rates (tariffs), and the provision of equal tax treatment for both IPPs and electric cooperatives, will incentivize private sector investment in energy development and provide greater opportunity for the integration of lower-cost power, to the benefit of IPPs, electric cooperatives, and ratepayers alike.

 The bills were referred to the Senate Resources, Labor and Commerce and Finance committees and the House Finance Committee.


Will U.S. Oil Boom Keep Booming?
Irina Slav, OilPrice.Com, February 4, 2024

  • Most of the production gains last year came despite a consistently lower rig count and no meaningful increase in spending on new production.
  • The EIA recently estimated the change in production over the last two weeks at a hefty positive 700,000 bpd, which would signal that U.S. production growth is still going strong.
  • If the Dallas Fed Survey is any indication, we may well see a slowdown in the rate of output growth this year.

When last October Hamas attacked Israel, oil prices jumped higher, as always happens when armed conflict breaks out in the Middle East. Just a week or so later, however, prices had retreated.

Even as the war spread and lit up surrounding countries, oil prices remained stubbornly range-bound, with analysts predicting that it would take an actual supply disruption for traders to start caring about geopolitical risk.

All this was made possible by one factor: U.S. oil production. That expanded surprisingly strongly last year. And many traders and analysts alike seem to assume that this year will be the same. But will it?

Earlier this month, Saudi Arabia ordered Aramco to stop work on The Kingdom’s oil production capacity expansion. That work would have raised Aramco’s maximum production capacity from 12 million bpd to 13 million bpd. It turned out, however, that Riyadh had reconsidered the plan. Bloomberg was quick to note the role of U.S. shale as the Saudis’ “nemesis for much of the past decade.”

The suggestion appears to assume that U.S. shale production will continue growing at last year’s robust rate, which surprised most industry watchers who had expected production to reflect drillers’ newfound capital discipline and focus on shareholder returns and debt repayment.



Don’t Make LNG Exports the Next Keystone XL
C3 Solutions, January 2024

In what many are dubbing the next Keystone XL Pipeline, climate activists have turned their attention to blocking liquefied natural gas (LNG) export projects. The attention was compounded last week when the Biden administration announced that it was reevaluating the climate criteria of LNG exports. Much like the battle over Keystone XL, the ire is misguided, and it would be a mistake for the Biden administration to make the permitting reviews more burdensome. Rather than slow walk or block LNG exports, it’s in America’s national interest – for economic, security, and environmental reasons – to let the market determine the appropriate level of natural gas trade. 



What’s Up Buttercup? Desperate Attempt to Delay Graphite One Project.

The Center for Biological Diversity petitioned the U.S. Fish and Wildlife Service today to protect a rare Arctic plant called the Alaskan glacier buttercup under the Endangered Species Act.

The buttercup is found only in the Kigluaik Mountains on the Seward Peninsula in Western Alaska. 


NEWS HEARD AROUND THE HILL: Text for the long-awaited border deal dropped in the Senate on Sunday, outlining the terms for a $118 billion agreement that would create stricter border and immigration policies, while providing billions to Ukraine, Israel, and Taiwan along with the border.  

But, of course, there are some energy-related provisions that were able to slip their way into the agreement. Here’s the rundown, in case you missed it: 

  • $98 million to invest in the development and production of isotopes
  • $149 million for the National Nuclear Security Administration to respond to the conflict in Ukraine 
  • $2.72 billion to support domestic uranium enrichment to help beef up production of civil and advanced nuclear fuel.

The bill also allocates $1.58 billion in direct budget support for Ukraine, to help build out the “future of a self-reliant Ukrainian economy” within the areas of private sector growth, transportation, and energy. 

For context: Russia is one of the largest exporters of “other isotopes” – forms of chemical elements that can be used to enrich uranium and create nuclear reactors – according to the Observatory of Economic Complexity. But even before the Russian invasion of Ukraine, there has been pressure for the U.S. to reduce its dependence on foreign isotope suppliers in case geopolitical conflicts disrupt supply chains. And that proved to be the case following the Russia-Ukraine conflict – which led to new mitigation efforts by the Department of Energy’s Isotope Program, which deals with the isotopes supply chain. 

Russia is also the sixth largest producer of uranium – the other ingredient to fuel nuclear energy – following Uzbekistan and Australia, according to the World Nuclear Association. 

Furthermore, Russia has routinely targeted Ukraine’s energy system in attacks, and took over the Zaporizhzhia nuclear plant in March of last year – the first operating civil nuclear power plant to come under attack. 

Why it’s important: The funds aim to build up U.S. domestic production of the materials needed for nuclear power – and to help expand Ukraine’s capabilities to combat Russian forces. 

But will it pass? It’s unclear if the package has the 60 votes to clear the upper chamber – and it faces an even higher hill to climb in the House. Stay tuned for updates on that. 

From the Washington Examiner, Daily on Energy