Today’s Key Takeaways: What’s really driving AK’s migration losses? Oil operations paused in Gulf of Mexico. Converging strategies to liberate North Slope gas. West Susitna mining opportunities advance. ESG investing faces backlash.
NEWS OF THE DAY:
The unseen factor driving Alaska’s migration losses
Liz Ruskin, Alaska Public Media, September 6, 2024
This year is shaping up to be the 12th in a row in which Alaskans leaving the state outnumber new people moving in.
Dan Robinson, the Alaska Department of Labor’s research chief, said the streak is unprecedented in Alaska history, and he cautioned against misreading it. For instance, it may seem like people are leaving Alaska in droves, but Robinson said that’s not so.
“In the most recent year, outmigration was lower than the 10-year average,” he said Thursday at a migration summit at the University of Alaska Anchorage. “It was lower than the 20-year average.”
Robinson said the trend is more driven by the lack of new arrivals, and they’re less visible.
“It’s an exchange. There’s in and out,” he said. “We tell stories about the out. These are our neighbors who leave. It’s harder to tell stories about the people who don’t come. But they both matter, and the net is what matters more than anything.”
All told Alaska has lost about 57,000 to migration over a dozen years, he said.
Don’t take this personally. It’s not you, Alaska. It’s them, at least in part.
Robinson said a big factor is the relative strength of the Alaska economy to that of the Lower 48 since 2013.
OIL:
Oil Giants Evacuate Gulf of Mexico Platforms Ahead of Developing Hurricane
Alex Kimani, OilPrice.Com, September 9, 2024
Oil and gas giants Chevron Corp. (NYSE:CVX), Exxon Mobil Corp. (NYSE:XOM) and Shell Plc (NYSE:SHEL) have evacuated staff and paused operations on oil platforms in the U.S. Gulf Of Mexico ahead of an expected hurricane, Reuters reports.
According to the National Hurricane Center, a system developing in the southwestern Gulf of Mexico is expected to grow from a tropical storm and reach hurricane strength on Monday before reaching the northwestern U.S. Gulf Coast by the middle of the week. NHC says the Potential Tropical Cyclone Six was located at 305 miles south-southeast of the Texas-Mexico border, with maximum sustained winds of 50 mph.
“While it is too soon to pinpoint the exact location and magnitude of impacts, the potential for life-threatening storm surge and damaging winds are increasing for portions of the Louisiana and Upper Texas coastlines beginning Tuesday night,” NHC said.
NHC says the system is expected to bring heavy rainfall and considerable flash flooding along portions of southernmost Texas, the coast of far northeast Mexico, southern Louisiana, and southern Mississippi into Thursday morning.
Back in July, natural gas flows to Freeport LNG’s export plant in Texas fell close to zero and more than 1.8 million homes and businesses in Texas were left without power after Category 5 hurricane Beryl made landfall near Matagorda, leaving in its wake a trail of dangerous storm surges, floods and heavy winds. CenterPoint Energy (NYSE:CNP), a public utility that serves nearly 2.6 million customers, reported that more than 1.5 million were without power in its service area.
With a capacity to handle 2.1-Bcf/d, Freeport is the nation’s third-biggest LNG export plant behind Cheniere Energy‘s (NYSE:LNG) 4.5-Bcf/d Sabine Pass in Louisiana and 2.4-Bcf/d Corpus Christi in Texas. Freeport has three liquefaction trains capable of turning about 0.7 Bcf/d of gas into LNG. LSEG data showed that feedgas to the facility averaged around 1.7 Bcf/d from June 30 to July 6.
GAS:
Stranded No More
Mikel Insalaco, AK Biz Magazine, September 2024
Converging strategies to liberate North Slope natural gas
A convergence of key players may finally bring long-held visions of utilizing local North Slope natural gas resources to fruition. The Interior Gas Utility (IGU) is advancing plans to power the Fairbanks area, while Pantheon Resources and the Alaska Gasline Development Corporation (AGDC) are exploring options to supply Southcentral.
Pivoting North
Economic implications for energy consumption in the Interior are substantial. According to IGU, diesel fuel was 26 percent more expensive than natural gas with equivalent energy content, as of July. For a region with some of the highest energy costs in the nation, the prospect of affordable natural gas represents significant economic relief.
IGU had begun the transition away from diesel by trucking natural gas to Fairbanks from its Titan liquefaction facility on the shore of Cook Inlet. Around the time Hilcorp, the inlet’s largest producer, announced a lack of certainty regarding natural gas availability, IGU management had been preparing to proceed with an approximately $60 million expansion project at Titan. Because of the announcement, IGU no longer found it feasible to make a sizable investment into an asset that may become unusable as soon as 2032, when IGU’s last available contract renewal would expire.
But the reality that IGU needed more liquefaction capacity to sustain its growth did not change, so IGU looked for alternatives. The search culminated with two twenty-year contracts on the North Slope. IGU representatives hailed the new course as both historic and exhilarating.
According to a statement from IGU, “The move to the North Slope for natural gas supply is what allows IGU to continue fulfilling our mission of providing clean-burning, affordable natural gas to as many people in the Fairbanks North Star Borough as possible, as soon as possible.”
IGU’s initiative is set to generate substantial economic activity through infrastructure development and home conversions. “There is significant economic activity that is generated by new natural gas installations,” the IGU statement adds. “IGU employs a seasonal crew that installs natural gas main and service lines. We also contract out some of that work to one or multiple contractors. Natural gas conversion work inside customers’ premises generates work for mechanical contractors, as well as supply houses.”
MINING:
West Susitna Mineral District emerges
Shane Lasley, September 5, 2024, North of 60 Mining News
U.S. GoldMining and Nova Minerals work side-by-side to advance gold, copper, and antimony projects at end of West Susitna Road.
The 4,000-foot Whiskey Bravo airstrip about 100 miles northwest of Anchorage as the Cessna 206 flies is serving as the operational headquarters of an emerging Alaska mining district with the potential to be a domestic source of minerals and metals critical to America’s economic wellbeing, national security, and clean energy ambitions.
The rich mineral potential of this district is underscored by U.S. GoldMining Inc.’s Whistler copper-gold project exploration camp at one end of the airstrip and Nova Minerals Ltd.’s Estelle gold-antimony exploration camp toward the other end.
While these companies have no formal affiliation and are advancing their exploration projects independently, they share a vision of putting the West Susitna Mineral District on the map – a common goal made all the more likely by their individual and collective success.
“Currently, both U.S. GoldMining and Nova Minerals are still in the exploration phase of defining and optimizing their mineral resources, but as their future potential mining studies are advanced, we would expect joint trade-off studies that will optimize synergies to share infrastructure and other elements of mine design, which will see sharing of technical information and potentially new joint studies,” U.S. GoldMining CEO Tim Smith told Mining News.
U.S. GoldMining and Nova Minerals’ individual and collective success will be further enhanced by the completion of the West Susitna Road, a project being advanced by state agencies that would connect the Whiskey Bravo Airstrip to Alaska’s highway system.
“We work closely with each other – rising tides lift all boats,” Nova Minerals CEO Chris Gerteisen said during a Sept. 2 interview with Mining News.
Alaska Gov. Mike Dunleavy, who visited the Whistler and Estelle project in 2023, says the road would open up a region west of more than half of Alaska’s population to new recreational and economic opportunities.
“The West Susitna Road is important for local residents and gaining fair access to hunting, fishing, and potential jobs,” Dunleavy said. “My administration is constantly looking at ways to grow our economy and this project is a great opportunity for not only south-central Alaska but the entire state. I am committed to this project and unlocking resources that benefit all Alaskans.”
These resources include the rich stores of precious metals and critical minerals found in the West Susitna Mineral District at the western terminus of the proposed road.
POLITICS:
ESG Investing Faces Backlash as Anti-Oil Stance Boomerangs | OilPrice.com
Irina Slav, September 4, 2024
- ESG funds saw outflows for the first time in their history last year, and the trend extended into this year.
- Alvarez & Marsal: we expect to see a decline in ESG-related campaigns and a renewed focus on metrics such as margin growth, cash generation and return on capital.
- The backlash against ESG investing overlooking physical reality is likely to continue for the foreseeable future.
Environmental, social and governance (ESG) investing has been touted as the mainstream investment style of the future—a more responsible but not less profitable future. The touting, however, went a bit too far, sparking an opposite and equal reaction, helped by the fact that ESG investing didn’t turn out to be as profitable as promised.
ESG funds saw outflows for the first time in their history last year, and the trend extended into this year. This was hardly surprising given the performance of most ESG industries out there, meaning wind and solar power. Somewhat ironically, European investors turned to defense stocks as an ESG investment, despite the industry’s negative impact on the environment. The argument made by governments promoting defense stocks is that defense manufacturers are positive in the social aspect.
Yet the most contentious issue in ESG investing has always been the traditional energy industry, also known as oil and gas. The knee-jerk reaction of ESG advocates is that oil and gas have no place in an ESG fund or an ESG investment strategy. According to some, however, this complete denial of oil and gas was the single worst thing those advocates could do—for their own hopes and ambitions.
“There were all of these idiots that were just saying, if anyone is doing hydrocarbons, we’re going to blackball them from doing business or from receiving capital,” hedge fund veteran Kyle Bass told Bloomberg this week. Apparently not fond of mincing his words, Bass also said, “And so Texas lashed back and said, if you’re going to blackball someone that’s producing hydrocarbons, we’re not going to do business with you either.”