Today’s Key Takeaways: AI influence on oil and gas jobs in the future. Wildfires in Alberta result in oil supply cuts. G7 embraces LNG as response to energy crisis. Mt. Iliamna gold mine on CIRI land reawakening. U.S.-based manufacturers of solar products, see rules issued by Biden administration as road to “cement China’s dominance”
NEWS OF THE DAY:
What New Oil and Gas Jobs Will Exist in the Future?
Andreas Exarheas, Rigzone, May 22, 2023
It’s hard to predict the future.
That’s what Dave Mount, the President of Louisiana based OneSource Professional Search, told Rigzone when asked what new industry jobs will exist down the line. Mount noted, however, that OneSource sees more of an evolution of jobs in the oil and gas jobs market as technology advances and is implemented into more engineering and operations spaces.
“For instance, data analytics that have been applied already in recent shale booms into production engineering and reservoir engineering will evolve into more broad operations coverage with Artificial Intelligence (AI) taking an increasing share of both field production engineering and reservoir performance evaluation, including more real time analysis and application of the analysis vs. look backs on past performance,” Mount said.
“We feel that plays with a large data set of wells drilled and on completion will apply AI more readily vs. newer, more geologically challenging regions,” he added.
Additionally, Mount outlined that robotics and intelligent controls will become more commonplace in all phases of the energy supply chain, projecting that robotics and sensors would be “more aggressively” deployed in more hazardous or expensive operations “making field workers more safe or automating tasks that are repetitive and can be replaced by AI”.
OIL:
Outages Hit Canada Oil Supply as Alberta Wildfires Persist
Sheela Tobben, Robert Tuttle, Bloomberg/Rigzone, May 22, 2023
The wildfire situation in Canada’s top energy-producing province of Alberta remained volatile Saturday, while the disruptions to oil and gas production now have buyers facing supply cuts.
At least two buyers were notified this week of force majeures and cuts of 5% or more to their receipts of low-sulfur Canadian crude this month, according to people familiar with the matter. Pembina Pipeline Corp. also declared force majeure on its Peace Pipeline system, which carries natural gas liquids from western oil and gas fields to the Edmonton area, according to two people who received the notice.
In all, the equivalent of about 240,000 barrels of daily oil and gas production — and perhaps more than 300,000 barrels — have been shut due to the fires, consultant Rystad Energy estimates. A total of 86 wildfires were burning in Alberta as of Saturday evening, down by seven from Friday, while the number of out-of-control blazes was steady at 26, provincial data show.
GAS:
Embrace of LNG by G7 a setback for climate goals, experts warn
Eric Johnston, The Japan Times, May 21, 2023
The Group of Seven’s move to promote deliveries of liquefied natural gas as a temporary response to the energy crisis prompted warnings from environmental groups over the continued embrace of fossil fuels, with one expert pinning blame on the hosts.
At their summit in Hiroshima, G7 leaders also stressed the importance of making a green transformation and pledged to ramp up clean energy investments. Specifically, they mentioned a collective increase in offshore wind capacity of 150 gigawatts by 2030 to meet a joint commitment to cut greenhouse gas emissions by 60% and fully or predominantly decarbonize the power sector by 2035.
But it was the G7’s approval of new gas investments to survive the ongoing energy shortages stemming from the Russia-Ukraine war that caught the attention of environmental organizations.
While Germany, which has been hit particularly hard by the cut off of Russian gas supplies, has been boosting investment to diversify its LNG sources, NGOs said it contradicted what experts said was needed to achieve decarbonization goals.
“If Germany continues to focus its negotiation power on new gas investments rather than leading the way for a future free of fossil fuels, this won’t be possible. Worse, the G7 is ignoring the International Energy Agency’s call to refrain from any new investments into fossil fuels, not just coal, to keep global warming to 1.5 degrees,” said Friederike Roder, vice president for Global Advocacy, Global Citizen.
Others noted that the decision on LNG means more delays on transitioning out of fossil fuel.
“By further investing in fossil fuels, the G7 leaders are missing out on the rapidly accelerating competitive edge of clean energy, and the wide range of associated benefits for people, businesses and economies,” said Gillian Nelson, policy director of the We Mean Business Coalition.
MINING:
A proposed gold mine is reawakening on Mt. Iliamna
Riley Board, KDLL, May 19, 2023
Plans to build an underground gold mine at the base of Mt. Iliamna have been in the works since the 1980s. Now, a Canadian mining company and the Alaska Native corporation that owns the land are in the advanced stages of exploring the area to see if it could be a viable project.
While HighGold, the mining company, says they’ll be careful about potential development on the land — which is inside a national park — not everyone is convinced. Although the project is still in early stages, environmental groups and the owners of the nearby historic cannery are raising red flags.
The site of the proposed project, called the Johnson Tract mine, is located 10 miles inside the boundary of Lake Clark National Park and Preserve, on the west side of Cook Inlet, on a 20,000-acre parcel of land owned by the Cook Inlet Regional Native corporation, or CIRI. The corporation picked that plot in a 1976 land exchange because of its resource extraction potential and benefit to shareholders.
Darwin Green is the CEO of HighGold. He said even though his company knows the tract contains rich deposits of gold, copper, and zinc, it’s doing studies now to see whether the project makes economic sense. Deposits there were found decades ago.
“It was discovered in the early 1980s, and then advanced through the mid-1990s,” Green said. “There was an operator at that time that had a mine project elsewhere, and they were looking at just shipping the ore to that site to mill it and process it there. And that’s where it stopped, and it sat idle for 25 to 30 years until CIRI approached our management group.”
The project site is remote, and HighGold is applying for a permit to build an airstrip and an inland road that would connect the airstrip to the site. The company estimates the earliest it would begin underground exploration is 2025.
POLITICS:
U.S. Solar Industry Complains About Biden’s Tax Credits
Institute for Energy Research, May 19, 2023
The U.S. Treasury Department recently determined that developers of solar energy projects can claim a new subsidy for facilities built with American-made products even if the system’s panels contain cells made entirely with Chinese materials. The policy is being criticized by U.S.-based makers of solar products, who say the guidelines do not go far enough to reclaim solar manufacturing from China, who dominates world production. President Biden’s Inflation Reduction Act (IRA) provides tax credits for facilities using American equipment to speed decarbonization of the U.S. power sector, create domestic jobs and reduce the country’s reliance on China for solar products. The IRA contains a 30 percent tax credit for renewable energy facilities like solar and wind farms, with an additional 10 percent of the project cost for using domestic content. The Treasury Department, however, would offer a 10 percent additional tax credit for facilities assembling solar panels in the United States, even if they import the silicon wafers used to make those panels from foreign countries, including China.
The United States solar business relies heavily on Chinese manufacturers for low-cost solar modules, and many Chinese-owned factories make these goods in Vietnam, Malaysia and Thailand to avoid U.S. tariffs on Chinese solar modules. China also supplies many of the key components in solar panels, including more than 80 percent of the world’s polysilicon, which most solar panels use to obtain energy from the sun. And a significant portion of Chinese polysilicon comes from the Xinjiang region, where cheap coal generation is used to produce it. The U.S. government has banned imports from the region because of concerns over forced Uyghur labor. There is no current U.S. supply of polysilicon-based cells, the dominant technology in the market. China is home to about 98 percent of global wafer production. Thus, as the United States moves to use solar and wind energy in its transition to green energy, it is becoming highly dependent on China, an autocratic country, vying to replace the United States as the #1 world superpower.