News of the Day:
Appeals court affirms Arctic, Atlantic leasing bans
Yereth Rosen, Reuters, April 13, 2021
A federal appeals court on Tuesday confirmed bans on offshore oil leasing in most federal Arctic waters and in the Atlantic after the Trump Administration tried to open them up to development.
The 9th Circuit Court of Appeals said President Joe Biden’s reinstatement of Obama-era protections makes moot the previous administration’s attempts to allow oil development there.
The Trump Administration pressed for oil-and-gas development throughout the United States as the nation’s crude production surged to a record 13 million barrels per day (bpd) by 2019. The court ruling ends a legal effort to resurrect a plan from early in Trump’s administration for certain offshore areas that had been protected.
Oil eyes highest finish since mid-March on a stronger demand outlook and drop in U.S. supplies
Myra P. Saefong & Mark DeCambre, Market Watch, April 14, 2021
Oil futures traded sharply higher Wednesday, as the International Energy Agency lifted its demand outlook for crude and a U.S. government report revealed a third-weekly drop in weekly inventories, setting prices up for their highest finish since mid-March.
In its monthly report, the International Energy Agency raised its forecast for global oil demand in 2021 by 230,000 barrels a day from its previous forecast. It now sees an increase of 5.7 million barrels a day from 2020 to 96.7 million barrels a day this year.
“Oil prices might be breaking out of their month-long wicked trading range as the normally pessimistic IEA is sounding pretty darn bullish,” said Phil Flynn, senior market analyst at The Price Futures Group, in a daily report.
On Tuesday, the Organization of the Petroleum Exporting Countries increased its 2021 demand forecast by 100,000 barrels a day. It expects global oil demand to climb by about 6 million barrels a day to reach 96.5 million barrels a day this year. OPEC also raised its forecast for global economic growth to 5.4% from 5.1%.
Oil prices responded well to the latest demand updates, which pointed to higher uptake of the commodity as the global economy recovers from the pandemic.
West Texas Intermediate crude for May delivery CLK21, 4.84% CL00, 4.84% rose $2.50, or 4.2%, to trade at $62.68 a barrel on the New York Mercantile Exchange, after settling above $60 on Tuesday for the first time since April 1.
Fracking ban fails to advance in California Legislature
Adam Beam, Associated Press, April 14, 2021
California lawmakers Tuesday rejected a bill that would have banned fracking in the state, succumbing to pressure from the powerful oil and gas industry and their labor union allies who warned the bill would have cost good-paying jobs.
The bill was inspired in part by California Gov. Gavin Newsom, who last year announced the state would ban the sale of all new gas-powered cars by 2035. He also called on the state Legislature to ban new permits for fracking, a technique to extract oil and gas embedded in rock deep beneath the surface.
Two Democratic state senators — Scott Wiener from San Francisco and Monique Limón from Santa Barbara — introduced legislation earlier this year that would have banned fracking by 2027. They later changed the bill to ban fracking by 2035.
But it wasn’t enough to win over some of their Democratic colleagues, who could not muster enough votes on Tuesday to advance the bill out of committee. The bill needed five votes to advance, but it only got four. Democratic Sen. Susan Eggman of Stockton joined two Republicans in voting against the bill, while two other Democrats — Robert Hertzberg of Van Nuys and Ben Hueso of Logan Heights — did not vote.
“There is a large stain on California’s climate record, and that is oil,” Wiener said during a committee hearing on Tuesday.
Aside from banning fracking and other similar oil extraction methods, the bill would have also imposed a 2,500-foot (762 meters) buffer between oil wells and places like homes and hospitals. It would have set up a state program designed to encourage companies to hire laid off oil and gas workers to help clean up closed wells.
But those jobs won’t pay as well as the oil and gas jobs they replace, said Rudy Gonzalez, secretary treasurer of the San Francisco Building and Construction Trades Council.
“Our blue-collar workers can’t afford this right now,” he said.
Opponents noted California heavily regulates the oil and gas industry to make sure they extract oil safely. Banning the practice would not reduce California’s dependence on oil, driven by the tens of millions of gas-powered cars and trucks on the state’s roads, requiring it to import more oil from other places.
“We’re still going to use it, but we’re going to use it from places that produce it less safely,” Eggman said. She added she supports transitioning the state away from oil and gas but cautioned: “I don’t think we’re quite there yet, and this bill assumes that we are.”
Wiener noted California is already dependent on foreign oil, saying the state imports about 70% of its supply. He said more than 2 million people in California live within 2,500 feet (762 meters) of an active oil well, putting them more at risk for health problems like asthma, other respiratory diseases, and cancer.
Tuesday’s vote means the proposal likely won’t pass the Legislature this year. But in a joint statement after the hearing, Wiener and Limón said they are not giving up.
“This issue isn’t going away,” they said. “We’ll continue to fight for aggressive climate action, against harmful drilling and for the health of our communities.”
Greens Creek maintains 10M oz silver pace
Shane Lasley, North of 60 Mining News, April 9, 2021
Hecla Mining Company April 8 reported that its Greens Creek Mine produced 2.6 million ounces of silver and 13,266 oz of gold during the first three months of 2021.
The Southeast Alaska mine’s first quarter silver output is down about 7% from the 2.8 million oz produced during the same period last year. The quarterly gold production, however, increased by about 8% over the 12,273 oz produced during the first three months of 2020.
Hecla says ore grades, lower for silver and higher for gold, was the primary reason for the metal production changes from last year. The Greens Creek mill operated at an average of 2,156 tons per day during the first quarter of this year, down only about 1% from the 2,185 tpd during the first quarter of 2020.
Hecla’s four mines – Greens Creek, Lucky Friday in Idaho, Casa Berardi in Quebec, and Nevada Operations – produced 3.5 million oz of silver and 52,004 oz of gold during the first quarter of this year. The silver production is a roughly 7% increase over the 3.2 oz produced during the same period last year, while gold production dropped 12%.
The company said the increased silver output is due to increasing production at the restarted Lucky Friday Mine and the drop in gold output is due to reduction in less profitable production of the precious metal.
Increased activity at Lucky Friday also contributed to significant increases in Hecla’s zinc and lead production.
During the first quarter, the company produced 16,107 tons of zinc, up 25% over the 12,847 tons produced during the first three months of 2020, and 10,703 tons of lead, an 82% jump over the 5,893 tons produced last year.
Greens Creek also produces zinc and lead as byproduct metals, but Hecla does not break down the production of these base metals by operation.
Ballot initiatives seek to curb cruise ships
Peter Segall, Juneau Empire, April 13, 2021
A group of cruise-reform activists in Juneau submitted three ballot initiatives on Monday they hope will appear on the city’s next municipal election which would put various limits on cruise ships in the city.
Even as lawmakers and business groups are pushing to bring cruise ships back to the state, some feel Alaska’s break from cruise ships could be a good thing. Karla Hart, a Juneau resident and co-founder of the Global Cruise Activist Network, said in a phone interview Tuesday the pandemic had paused the tourism industry in Alaska but not the growth of the cruise ship industry overall.
“It’s like a big cork, and as soon as it goes, we’re going to get flooded again,” Hart said. “Not taking advantage of this opportunity to rethink what we’re doing seems shortsighted.”
On Friday, in the hangar of Wings Airways in Juneau, Gov. Mike Dunleavy held a press conference flanked by state and local lawmakers, business owners and cruise industry representatives to announce a major effort by the state to open the state to cruising. At the conference, Dunleavy signed a joint resolution recently passed by the Alaska State Legislature and drafted by Sen. Jesse Kiehl, D-Juneau, urging Congress and President Joe Biden to take action allowing cruise ships to resume sailing.
Currently, the Centers for Disease Control and Prevention has issued a no-sail order for cruise ships of a certain size, citing ongoing COVID-19 concerns. Another complication for Alaska is Canada’s decision to close to cruise ships, preventing certain ships from traveling to the state without breaking maritime law.
Alaska’s congressional delegation has submitted legislation to waive the law in question, the Passenger Services Vessel Act, and failing that, the resolution asks the president to use executive authority to bypass the law.
Speakers at Friday’s news conference, including Juneau Mayor Beth Weldon, emphasized the cruise industry’s impact on the rest of the Alaskan economy beyond the visitor industry and said cruise ships are essential to the survival of countless small businesses in the state.
That was similar to the message Midgi Moore, president of the Juneau Downtown Business Association had. Speaking to the Empire by phone Tuesday, Moore said the DBA hoped Juneauites would look at what the cruise industry had down for small businesses in Juneau when considering the initiatives.
In addition to her work with DBA, Moore runs her own small business, Juneau Food Tours, and said she was personally disappointed by the initiatives.
“It feels like we’re being kicked while we’re down,” Moore said, speaking for herself and not DBA.
John Kerry and China’s long road ahead on climate
Ben Geman, Axios, April 14, 2021
Yes, special climate envoyJohn Kerry’s really in China and no, don’t look for a huge breakthrough between the world’s two largest carbon-emitting nations.
The intrigue: State’s announcement went far beyond logistics.
Their comments and an interview Kerry did in the Wall Street Journal were notable for tough talk and seemingly setting expectations low.
- “We must insist Beijing do more to reduce emissions and help tackle the worldwide climate crisis,” a State Department spokesperson said.
- The spokesperson, citing Kerry’s prior talks with his Chinese counterpart Xie Zhenhua, said the trip is ” intended only to continue these important discussions.”
- “We are talking to China about talking,” Kerry told the WSJ. “We need…to have China at the table in order to be able to resolve this challenge.”
Why it matters: Kerry’s the highest-ranking Biden administration official to visit China, and the trip comes amid deep divisions on trade, security, human rights and more.
- The multiday meetings come just ahead of a major White House climate summit April 22-23 (China is invited) aimed at jump-starting more aggressive global efforts to stem emissions.
- China’s greenhouse gas output is by far the world’s largest, so efforts to press for stronger steps are key to keeping the Paris climate agreement goals at all viable.
The big picture: The New York Times sums it up…
“Mr. Kerry’s visit to China underscores the Biden administration’s intent to cooperate with China on shared challenges, including climate, the coronavirus and nuclear proliferation even as the countries are locked in an increasingly fraught political, technological and military competition.”
What we’re watching: That’s whether the two nations will offer any new bilateral commitments.
A separate WSJ story, citing a source familiar with the talks, said Kerry and Xie will discuss “creating a new formal mechanism for bilateral engagement” and helping developing nations curb emissions.
Catch up fast: China last year committed to achieving carbon neutrality by 2060 and having its emissions peak before 2030.