NEWS OF THE DAY:
Court orders Biden administration to redo ‘legally flawed’ reviews of Conoco Alaska oil project
Ben Lefebvre, Politico, August 18, 2021
A federal court on Wednesday ordered the Biden administration to re-do environmental reviews necessary for permits for a controversial Alaskan oil project, throwing the decision to approve the project back to the agencies.
Details: The ruling out of the United States District Court for the District of Alaska voided several environmental reviews of the ConocoPhillips Willow project approved under the Trump administration, calling the analysis behind them “legally flawed.” Among the parts of the review the court singled out were those made by the Interior Department’s Bureau of Land Management and Fish and Wildlife Service.
BLM’s exclusion of foreign greenhouse gas emissions in its alternatives analysis in the [review] was arbitrary and capricious,” Judge Sharon Gleason wrote in the opinion.
The court also ruled that the endangered species review FWSmade under the previous administration ”is not in accordance with the law because it lacks the requisite specificity of mitigation measures for the polar bear.”
“Because the Court concludes that portions of FWS’s biological opinion are invalid, BLM’s reliance on it is unlawful,” the court concluded.
Environmental groups and Alaskan tribes that had been fighting the project hailed the court decision.
“Today’s court win recognizes that our land and our people deserve dignity and a pursuit of greater meaning,” said Siqiñiq Maupin, executive director of Sovereign Iñupiat for a Living Arctic.
An Interior spokesperson declined to comment.
“Make no mistake, today’s ruling from a federal judge trying to shelve a major oil project on American soil does one thing: outsources production to dictatorships & terrorist organizations,” Alaska Gov. Mike Dunleavy said in a statement. “This is a horrible decision.”
Background: The judgment comes after environmental groups and Alaska natives had panned the Biden administration’s decision to continue defending the project from lawsuits filed during the previous administration. The project was championed by Alaska’s Republican senators Lisa Murkowski and Dan Sullivan.
The Willow project is one of the few new large-scale drilling projects planned for the Arctic.
ConocoPhillips’ plans calls for five wells that collectively could produce up to 160,000 barrels of oil a day. The development would include a new gravel mine, airstrip, more than 570 miles of ice roads and nearly 320 miles of pipeline to the Alaskan landscape.
“We will review the decision and evaluate the options available regarding this project,” a ConocoPhillips spokesperson said in a statement
OIL:
U.S. Regulator Moving to Restore Federal Oil and Gas Leasing Program
Pipeline & Gas Journal, August 18, 2021
A U.S. offshore regulator on Wednesday said efforts to resume a federal oil and gas leasing program are underway and would soon bear results following a court decision ending a suspension.
The Biden administration this week challenged the court decision, arguing the program does not adequately consider climate impacts. But it will proceed with new leases as its appeal grinds through the courts. It had halted the program in January to as part of its efforts to combat the effects of climate change.
“Based on the court order, we are now moving ahead with leasing,” Walter Cruickshank, deputy director of the Bureau of Ocean Energy Management (BOEM), said at the Offshore Technology Conference. “It will not be too long before you see something.”
The oil and gas industry has opposed the lease suspension and energy trade groups joined U.S. Gulf Coast and western state officials in seeking to overturn the Biden moratorium.
Cruickshank also said the BOEM and the Bureau of Safety and Environmental Enforcement are finalizing new rules that require offshore producers and all previous owners of assets to be financially liable for plugging wells and removing platforms and pipelines.
The issue has come to the fore with last year’s severe downturn in energy prices that led to offshore bankruptcies. Critics say regulators need to increase bonding requirements for energy producers that end up abandoning oil facilities.
“Our basic policy is that Americans should not pay for decommissioning,” the offshore administrator said. Proposed changes to the rules “would protect taxpayers from being charged with it. We want to make sure that companies are financially strong and taxpayers are not loaded with these costs.”
GAS:
BP Looks to Build U.S. RNG Portfolio in Iowa and California
Morgan Evans, Natural Gas Intelligence, August 18, 2021
BP plc subsidiaries are set to expand their renewable natural gas (RNG) resources in a deal with a Gevo Inc. Iowa facility now under construction.
BP Canada Energy Marketing Corp. and BP Products North America Inc. would buy the RNG, produced from dairy farm cow manure, from Gevo NW Iowa RNG LLC. Earlier this month BP and Gevo agreed to the sale from the Iowa facility, which is set for completion early next year.
Using feedstock from three dairy farms, the facility is to be capable of producing roughly 355,000 MMBtu/year of RNG, according to Gevo.
“RNG is proving to be a key fuel in the energy transition,” Gevo CEO Patrick Gruber said. “BP has a value chain that allows RNG to reach the transportation market, and it’s a pleasure to work with a company that shares our vision of a low-carbon future. This is an excellent opportunity to meet the growing demand for RNG and to expand our RNG business.”
BP has long held the title of No. 1 North American natural gas marketer, according to NGI’s quarterly surveys.
In related news, BP has a dispensing agreement with Clean Energy Fuels Corp. to sell RNG into the California market.
“Fleets that are looking to lower their emissions are switching to RNG because it can provide immediate and significant carbon reductions,” said Clean Energy Vice President Chad Lindholm. “They’re finding that RNG is the easiest and most cost-effective way to meet sustainability goals.”
RNG constitutes more than 74% of the 26 million gallons of fuel that Clean Energy predicted it could provide through recent agreements. It said it has multi-year agreements with cities that include the California cities of Pasadena, Sacramento, and Redlands, along with Sacramento County. It also has agreements with Fort Smith, AR, and the Olathe School District in Kansas.
MINING:
The Taliban are sitting on $1 trillion worth of minerals the world desperately needs
Julia Horowitz, CNN Business, August 19, 2021
The swift fall of Afghanistan to Taliban fighters has triggered a humanitarian crisis, with thousands trying to flee the country. It’s alsobrought renewed focus on Afghanistan’s vast untapped mineral wealth, resources that could transform its economic prospects if ever developed.
Afghanistan is one of the poorest nations in the world. But in 2010, US military officials and geologists revealed that the country, which lies at the crossroads of Central and South Asia, was sitting on mineral deposits worth nearly $1 trillion.
Supplies of minerals such as iron, copper and gold are scattered across provinces. There are also rare earth minerals and, perhaps most importantly, what could be one of the world’s biggest deposits of lithium — an essential but scarce component in rechargeable batteries and other technologies vital to tackling the climate crisis.
“Afghanistan is certainly one of the regions richest in traditional precious metals, but also the metals [needed] for the emerging economy of the 21st century,” said Rod Schoonover, a scientist and security expert who founded the Ecological Futures Group.
Security challenges, a lack of infrastructure and severe droughts have prevented the extraction of most valuable minerals in the past. That’s unlikely to change soon under Taliban control. Still, there’s interest from countries including China, Pakistan, and India, which may try to engage despite the chaos.
“It’s a big question mark,” Schoonover said.
Huge potential
Even before President Joe Biden announced that he would withdraw US troops from Afghanistan earlier this year, setting the stage for the return of Taliban control, the country’s economic prospects were dim.
As of 2020, an estimated 90% of Afghans were living below the government-determined poverty level of $2 per day, according to a report from the US Congressional Research Service published in June. In its latest country profile, the World Bank said that the economy remains “shaped by fragility and aid dependence.”
“Private sector development and diversification is constrained by insecurity, political instability, weak institutions, inadequate infrastructure, widespread corruption, and a difficult business environment,” it saidin March.
Many countries with weak governments suffer from what’s known as the “resource curse,” in which efforts to exploit natural resources fail to provide benefits to local people and the domestic economy. Even so, revelations about Afghanistan’s mineral wealth, which built on earlier surveys conducted by the Soviet Union, have offered huge promise.
Demand for metals like lithium and cobalt, as well as rare earth elements such as neodymium, is soaring as countries try to switch to electric cars and other clean technologies to slash carbon emissions.
The International Energy Agency said in May that global supplies of lithium, copper, nickel, cobalt and rare earth elements needed to increase sharply or the world would fail in its attempt to tackle the climate crisis. Three countries — China, the Democratic Republic of Congo and Australia — currently account for 75% of the global output of lithium, cobalt, and rare earths.
The average electric car requires six times more minerals than a conventional car, according to the IEA. Lithium, nickel, and cobalt are crucial to batteries. Electricity networks also require huge amounts of copper and aluminum, while rare earth elements are used in the magnets needed to make wind turbines work.
The US government has reportedly estimated that lithium deposits in Afghanistan could rival those in Bolivia, home to the world’s largest known reserves.
“If Afghanistan has a few years of calm, allowing the development of its mineral resources, it could become one of the richest countries in the area within a decade,” Said Mirzad of the US Geological Survey told Science magazine in 2010. He led the Afghanistan Geological Survey until 1979.
Even more obstacles
That calm never arrived, and most of Afghanistan’s mineral wealth has remained in the ground, said Mosin Khan, a nonresident senior fellow at the Atlantic Council and former Middle East and central Asia director at the International Monetary Fund.
While there has been some extraction of gold, copper, and iron, exploiting lithium and rare earth minerals requires much greater investment and technical know-how, as well as time. The IEA estimates that it takes 16 years on average from the discovery of a deposit for a mine to start production.
Right now, minerals generate just $1 billion in Afghanistan per year, according to Khan. He estimates that 30% to 40% has been siphoned off by corruption, as well as by warlords and the Taliban, which has presided over small mining projects.
Still, there’s a chance the Taliban uses its new power to develop the mining sector, Schoonover said.
“You can imagine one trajectory is maybe there’s some consolidation, and some of this mining will no longer need to be unregulated,” he said.
But, Schoonover continued, the “odds are against it,” given that the Taliban will need to devote its immediate attention to a wide range of security and humanitarian issues.
“The Taliban has taken power but the transition from insurgent group to national government will be far from straightforward,” said Joseph Parkes, Asia security analyst at risk intelligence firm Verisk Maplecroft. “Functional governance of the nascent mineral sector is likely many years away.”
Khan notes that foreign investment was hard to come by before the Taliban ousted Afghanistan’s civilian Western-backed government. Attracting private capital will be even more difficult now,particularly as many global businesses and investors are being held to ever higher environmental, social and governance standards.
“Who’s going to invest in Afghanistan when they weren’t willing to invest before?” Khan said. “Private investors are not going to take the risk.”
US restrictions could also present a challenge. The Taliban has not been officially designated as a Foreign Terrorist Organization by the United States. However, the group was placed on a US Treasury Department list of Specially Designated Global Terrorists and a Specially Designated Nationals list.
An opportunity for China?
State-backed projects motivated in part by geopolitics could be a different story. China, the world leader in mining rare earths, said Monday that it has “maintained contact and communication with the Afghan Taliban.”
“China, the next-door neighbor, is embarking on a very significant green energy development program,” Schoonover said. “Lithium and the rare earths are so far irreplaceable because of their density and physical properties. Those minerals factor into their long-term plans.”
Should China step in, Schoonover said there would be concerns about the sustainability of mining projects given China’s track record.
“When mining isn’t done carefully it can be ecologically devastating, which harms certain segments of the population without a lot of voice,” he said.
Beijing could be skeptical of partnering on ventures with the Taliban given ongoing instability, however, and may focus on other regions. Khan pointed out that China has been burned before, having previously tried to invest in a copper project that later stalled.
“I believe they will prioritize other emerging/frontier geographies well before Taliban-led Afghanistan,” said RK Equity partner Howard Klein, who advises investors on lithium.
POLITICS:
From the Washington Examiner, Daily on Energy:
GINA MCCARTHY REBUKED FOR ‘ALL OF THE ABOVE’ MANTRA: Climate adviser Gina McCarthy further muddled the Biden administration’s position on natural gas, and infuriated environmentalists, with a comment this week touting its “all of the above” strategy.
That phrase, often used by the Obama administration to support fracking, was hoped by climate activists to go extinct under Biden.
“The president’s plan is an all-of-the-above’ strategy and we are looking at every opportunity, of course, to get renewable energy into the marketplace as fast as we can but we are not picking and choosing winners. We are investing in every winner we can find,” McCarthy said during a visit to San Diego Gas & Electric’s Emergency Operations Center to learn about how the company has tried to reduce wildfire risk.
McCarthy was asked if natural gas is part of the White House’s energy equation, according to coverage by the San Diego Union-Tribune.
McCarthy could have simply been speaking to the crowd. San Diego Gas & Electric is owned by Sempra Energy, one of the top U.S. exporters of natural gas. The Biden administration has nodded to the role of LNG in displacing coal in developing countries. But climate activists are having none of it.
“Truly gobsmacked that McCarthy has once again used _that_ phrase, particularly in relation to the Biden administration’s position on fossil gas. Just completely unacceptable. I thought we killed ‘all of the above’ during 2nd term Obama…we don’t have time for this nonsense,” tweeted David Turnbull, strategic communications director at Oil Change U.S.
CLIMATE CHANGE:
Appeasing China is the wrong way to fight climate change
John Hart, Benji Backer, The Washington Times, August 17, 2021
Dozens of “progressive” organizations recently sent a letter to the White House and Congress urging them not to antagonize China but instead pursue multilateral efforts to address the challenge of global climate change. This approach is naïve and a threat to global security. Conservatives should chart a different course that pursues the noble cause of freedom while holding China accountable for its contributions to global climate change.
While it’s true that partisanship should end at the water’s edge, human rights must not. America is founded upon the idea that human rights are not bound to geography, ethnicity, national borders, or moments in time. Our idea of freedom is still revolutionary 250 years after our founding because we unapologetically declare that human rights exist for all people, in all places, at all times.
“Progressives” who are arguing that human rights don’t extend to persecuted minorities in China are on the wrong side of history and justice. As Martin Luther King Jr. wrote, “Injustice anywhere is a threat to justice everywhere. We are caught in an inescapable network of mutuality, tied in a single garment of destiny. Whatever affects one directly affects all indirectly.”
We believe that climate change is real. It is a global challenge that demands global solutions. Combating climate change does not, however, require the United States and the rest of the world to remain silent about human rights abuses, repressive policies, and the military ambitions of the world’s largest greenhouse gas emitter, China.
The issues that “antagonize” the Chinese Communist Party (CCP) are ones U.S. policymakers should not ignore. China used forced labor from Uyghurs to manufacture solar panels. Beijing was angry when Japan and the U.S. announced COVID-19 vaccinations for the people of Taiwan. The list goes on. Failure to speak up is unconscionable
China’s human rights abuses, military ambitions, and industrial policy cannot be separated from climate change. Even attempting to treat climate change as a stand-alone issue is dangerous. Andrew Erickson, professor at the U.S. Naval War College, and Gabriel Collins, a research fellow at Rice University’s Baker Institute for Public Policy, wrote, “Xi’s bullish talk of combating climate change is a smokescreen for a more calculated agenda. Chinese policymakers know their country is critical to any comprehensive international effort to curb greenhouse gas emissions, and they are trying to use that leverage to advance Chinese interests in other areas.”
The reality is that China is now emitting more greenhouse gases than the entire developed world combined. China has previously under-reported its emissions, making it difficult to track its progress, or lack thereof, on climate targets. Any policies that fail to account for the global nature of emissions will be meaningless. In a real sense, “climate change” is increasingly an issue of “China change.” Because climate change is global, China’s emissions are helping to drain water from Lake Mead, which serves 25 million Americans and drying up the Great Salt Lake. China is cooking the planet.