NEWS OF THE DAY:
Alaska weighing options to push back on new review of ANWR leasing
Sean Maguire, KTUU, August 3, 2021
The Alaska Department of Law is deciding how to respond to the federal government’s announcement that it will hold another environmental review of oil and gas leasing in the Arctic National Wildlife Refuge.
“The continued delay tactics of the Biden administration greatly impact the State of Alaska and our ability to responsibly develop resources and support our economy,” said Cori Mills, a spokesperson for the department. “We are looking at all available options to push back on these unreasonable and unnecessary delays, although no specific path, or set of paths, has yet been chosen.”
President Joe Biden’s administration suspended a leasing program of the coastal plain in June. The Department of the Interior had reviewed how the program was approved and said that process had “legal deficiencies.”
The federal government will now prepare a “supplemental” environmental impact statement and consider alternatives for how the 10-02 region is used. Some of those alternatives include shrinking the land available for development from 1.5 million acres to 2,000 acres.
Developing the coastal plain has been a 40-year goal for many in Alaska. A federal law passed in 2017 moved that one step closer, mandating that two lease sales must occur by 2024.
The first ANWR lease sale in January was poorly attended and major oil companies did not bid. The Alaska Industrial Development and Export Authority ended up with seven of the 11 tracts of land available to lease.
Alan Weitzner, who heads the authority, said the state-run corporation is now considering its options and did not rule out a legal challenge against the federal government. He said the corporation will assert its lease holding rights by submitting permitting requests to conduct surveys of the land.
Weitzner added that he has not received any information on what the “legal deficiencies” are from the first environmental review process.
Tuesday’s announcement was welcomed by conservationists. Andy Moderow, who heads the Alaska Wilderness League, says the first environmental review under former President Donald Trump was rushed and did not have enough outreach with people living in the region.
He is calling for the repeal of the 2017 law that mandates the lease sales.
“And at the end of the day, I think it will become crystal clear both to the Biden administration and Congress that drilling in the refuge is not the way forward,” Moderow said.
Alaska’s Republican congressional delegation and Gov. Mike Dunleavy were frustrated by the second review announcement, calling it “devastating” and an attempt to turn Alaska “into one big national park.”
OIL:
Oil price decline continues as China’s outbreak weighs on demand
Rakteem Katakey, Sharon Cho, World Oil, August 4, 2021
Oil declined for a third day as the coronavirus spread in Asia, particularly China, continued to threaten demand.
West Texas Intermediate futures slumped 1.9%, after retreating 4.6% in the previous two sessions. The delta strain of Covid-19 has been detected in almost half of China’s 32 provinces in just two weeks, and at least 46 cities have advised residents not to travel unless strictly necessary.
“Crude oil continues to trade soft with the focus on the risk to demand from a fast-spreading outbreak of the delta coronavirus variant in key importer China,” said Ole Hansen, head of commodities research at Saxo Bank A/S.
After managing a small advance in July, August is proving to be tough for crude. Tightened controls in some Asian nations to curb the spread of the virus risk eroding oil demand at a time when the Organization of Petroleum Exporting Countries and its allies are gradually increasing supply.
Prices:
- WTI for September delivery slipped $1.36 to $69.20 a barrel as of 8 a.m. in New York
- Brent for October settlement dropped $1.16 to $71.25 a barrel
China’s latest outbreak has spread to Beijing despite the capital’s stringent measures, with authorities taking steps Tuesday to ban rail passengers from 23 regions. The financial hub of Shanghai also reported a virus case this week. As risks escalate, analysts are reviewing their economic growth projections.
Still, there are positive signs for oil elsewhere. U.S. crude stockpiles may have dropped further, with the American Petroleum Institute reporting a 879,000-barrel weekly decline, according to people familiar with the data. Gasoline holdings shed 5.75 million barrels, the people said. Official government numbers are due later on Wednesday.
There have also been rising tensions near the Persian Gulf — a region vital for the world’s oil markets — in the past week. The British Navy said a ship was safe following a possible hijacking near Iran, days after a deadly drone attack on a tanker that the U.S., U.K., and Israel all blamed on the Islamic Republic.
GAS:
FERC must redo climate analysis for Texas LNG projects – D.C. Circuit
Sebastien Malo, Reuters, August 4, 2021
- Authorizations to build Texas LNG export terminals, pipelines not vacated
- FERC told failed analysis of projects’ impacts on environmental justice communities
- FERC chairman Glick says body has ‘obligation’ to analyze impacts of greenhouse gas emissions
(Reuters) – A federal appeals court on Tuesday ruled that the Federal Energy Regulatory Commission (FERC) must further analyze the impacts of proposed liquefied natural gas marine terminals on climate change and low-income or minority communities in Cameron County, Texas.
In a victory for the community and environmental groups who appealed FERC’s decision to approve the Texas and Rio Grande LNG terminals as well as related pipelines, a unanimous panel of the U.S. Circuit Court of Appeals for the D.C. Circuit ruled that FERC violated the National Environmental Policy Act (NEPA) with “deficient” environmental analyses. The panel did not, however, vacate the order.
“This decision clearly demonstrates that the Commission has the authority and obligation to meaningfully analyze and consider the impacts from (greenhouse gas) emissions and impacts to Environmental Justice communities,” said FERC chairman Richard Glick, who had dissented on the projects’ approval.
A Texas LNG spokesperson said the ruling was a reminder of the importance of environmental justice. K&L Gates represents the company.
Matt Schatzman, the chief executive of NextDecade Corp, which is developing Rio Grande LNG, said in statement that he was pleased the court “affirmed” the project’s authorization.
Jeremy Marwell of Vinson & Elkins, who represents Rio Bravo Pipeline Company, said its parent, Enbridge, does not comment on pending litigation.
Jennifer Richards, a lawyer with Texas RioGrande Legal Aid representing co-plaintiff Vecinos para el Bienestar de la Comunidad Costera, a community group, said: “Before the Commission can say these projects are in the public interest, it needs to “evaluate environmental justice impacts.”
The Texas and Rio Grande LNG projects plan to export natural gas from the Port of Brownsville to global markets.
The plaintiffs sued FERC last year over its separate authorizations to construct and operate the facilities.
They claim that FERC violated NEPA because it anchored its authorizations for the projects in botched environmental reviews of the projects’ greenhouse gas emissions, saying the facilities would “have higher greenhouse gas emissions than nearly every other project FERC has reviewed.”
Writing for the panel, U.S. Circuit Judge Robert Wilkins agreed that FERC “failed to respond to significant opposing viewpoints concerning the adequacy of its analyses of the projects’ greenhouse gas emissions.”
The judge said that it should have responded, when the groups sought rehearings of the orders, to their argument that federal regulations on NEPA’s implementation require FERC to use “methods generally accepted in the scientific community,” such as the social cost of carbon protocol, to gauge its contribution to climate change.
Wilkins also ruled FERC acted arbitrarily when it “offered no explanation” as to why it limited its environmental justice analysis to census blocks within only two miles of the project sites.
Cameron County is 89% Hispanic/Latino and 30% of its residents live below the poverty line, one of the complaints says.
Wilkins was joined by Chief U.S. Circuit Judge Srikanth Srinivasan and Senior U.S. Circuit Judge Douglas Ginsburg.
The case is Vecinos para el Bienestar de, et al v. FERC, U.S. Circuit Court of Appeals for the D.C. Circuit, Nos. 20-1093, 20-1094, 20-1045.
MINING:
State allows Donlin Gold to lease land for 315-mile pipeline
Olivia Ebertz, KYUK, Bethel, August 3, 2021
The Alaska Department of Natural Resources has granted Donlin Gold the right to lease state land in order to build a pipeline that will power its mine — for the second time.
DNR granted the land-use rights on July 20 for a proposed 315-mile-long pipeline that would stretch from Cook Inlet to the proposed mine site about 12 miles north of Crooked Creek on the Kuskokwim River. The pipeline will supply natural gas to the mine to power its operations.
But it’s not the first final decision to grant the land rights.
The first one happened over a year ago. Tribes opposing the mine sought a re-review, and DNR agreed to put the decision on hold to look at the pipeline again.
Since last April, DNR’s state pipeline coordinator, Tony Strupulis, has been analyzing the pipeline. He said he didn’t find any major flaws in the project and the designs haven’t changed.
“We did take a look at everything, and it was just a matter of organizing and presenting it in a better form than we did originally,” Strupulis said.
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The reason for the re-review, according to a statement issued by DNR, was to “review and clarify the cumulative effects of the project.”
That was a key part of the tribes’ concerns, and the reason they asked for the review.
But now attorneys from environmental law firm Earthjustice say DNR didn’t do enough in their re-analysis, citing that they reissued the exact same decision. Earthjustice Attorney Tom Waldo said DNR needs to look at all the impacts of the project, rather than one issue at a time, as he says they’re doing.
“I thought that they were going to evaluate the whole project again, like we had requested, but they didn’t do that,” he said. “They should be thinking about the whole project, and they should be thinking about the big picture.”
Earthjustice represented five Yukon-Kuskokwim Delta tribes — Orutsararamiut Native Council, Chuloonawick Native Village, Chevak Native Village, the Native Village of Eek, and the Kasigluk Traditional Council — and nonprofit piCook Inletkeeper in the most recent regulatory battle against the pipeline.
Tribes opposing the pipeline say it will disastrously affect their land use and subsistence resources.
Strupulis acknowledged pipelines come with some risk.
“The risks are less than some of the other options for energy sources, you know,” he said. “It’s better than hauling diesel by road or by boat. A gas pipeline is better from that respect, but it’s not completely without risk. There’s the potential of rupture of a pipeline, or a leak and discharging the product — whether that be oil or gas — into the environment.”
If the tribes choose to contest the approval for the pipeline land lease, they have until Aug. 8 to file with DNR.
If the commissioner of DNR then upheld the decision, they would then have to appeal to the Superior Court.
This isn’t the only regulatory front on which the five Y-K Delta tribes are fighting for additional review of the mine’s development. They’re already appealing a State Water Quality Certificate in Alaska Superior Court and appealing a separate decision by DNR to grant 12 water-use permits to the proposed mine.
A sixth tribe, Tuluksak Native Community, has also joined the appeals.
For its part, Donlin Gold has said that the pipeline, in addition to powering the mine, could bring new energy solutions to the Y-K Delta.
POLITICS:
Senator Kiehl predicts Fiscal Policy Working Group will be ready with recommendations
KINY Radio, August 3, 2021
Juneau Senator Jesse Kiehl is serving on the Fiscal Policy Working Group that is coming up with recommendations for the Legislature to consider when it convenes its third special session on August 16.
Governor Dunleavy postponed the session’s start from August 2 when all four caucuses requested a delay to in order to allow more time to form recommendations.
Kiehl believes the group will be ready in time. He said he appreciated the Governor making the change in his special session call. “This group is working hard and we’re going to get something out I’m pretty confident before that August 16 special session begins.”
Key to any agreement is the fate of the Permanent Fund. Kiehl indicated there’s a consensus among the group that the state needs to adhere to a formula on how Alaska’s nest egg is tapped.
He pointed out that for the last several years there’s been a law on the books about how the Permanent Fund Dividend is calculated, but it hasn’t been followed since the cash was needed to pay for state services. “We haven’t changed the law to match what we’re doing. If we’re going to have a law on the books, we need to follow it or change it. I mean that’s a law-making body’s duty I think so I think I’m pretty confident predicting that this group is going to recommend changes so that we’ve got something that Alaska can afford, that Alaskans can count on for a PFD.”
Kiehl guaranteed that no one will recommend doing away with the dividend.
Senator Kiehl wasn’t clear on what might emerge from the group on taxation. He favors an income tax as well as oil tax reform.
CLIMATE CHANGE:
From the Washington Examiner, Daily on Energy:
THE BIDEN ADMINISTRATION STANCE ON NATURAL GAS: Climate envoy John Kerry says natural gas is not “anything near a long-term solution” to help address climate change even while it can help replace coal in certain countries in the near-term.
Kerry’s stance, declared in an interview with the New Yorker published last night, is notable because the Biden administration has struggled to articulate a consistent position on the role of natural gas.
Here is the entire quote: “Russia has an option of quickly closing coal plants that are more than forty years old, not working that effectively, and not needed, in favor of transitioning to gas for the moment. I emphasize ‘for the moment’ because gas is still a fossil fuel, and gas is mostly methane, so it leaks and also produces CO2. It’s not, in our judgment, anything near a long-term solution, unless somebody discovers one-hundred-percent abatement.”
Energy Secretary Jennifer Granholm has repeatedly said that shipping U.S. liquified natural gas abroad can play an important role in replacing dirtier coal, especially in Asia. She has also pressed the oil and gas industry to do a better job of reducing methane emissions associated with LNG in order to make that case credible. But she has not definitively said how long gas can continue playing a useful role in the clean energy transition.
Still, liberal climate activists who have been pushing the administration to reject natural gas, even as a replacement for dirtier coal abroad, are interpreting Kerry’s comments as being closer to their position.
“Special Envoy Kerry’s comments were definitely encouraging,” Collin Rees, senior campaigner with Oil Change U.S., told me. “It’s good to see a recognition from Kerry that ‘slightly less dirty’ won’t cut it — and that zero emissions means no gas or other fossil fuels.”