Today’s Key Takeaways: 5 options for ConocoPhillips Willow Project. Pantheon spuds Alaska well. Making history – U.S. supplies more gas to Europe than Russia for the first time. Western Alaska encouraged by what it sees. 4 takeaways from the DoE Energy Jobs Report. The many reasons ESG is a loser?
NEWS OF THE DAY:
Biden Administration Issues Options for ConocoPhillips’ Alaska Oil Drilling Project
Reuters, Pipeline & Gas Journal, July 11, 2022
The Biden administration on Friday unveiled an environmental analysis for ConocoPhillips’ planned $6 billion Willow oil and gas project in Alaska and outlined several options for the development, including not building it at all.
The release of the document has been highly anticipated by the oil and gas industry and environmental groups since last year, when a federal judge in Alaska reversed the Trump administration’s approval of the massive project and said federal agencies must reconsider their environmental analysis.
It comes as President Joe Biden has sought to balance his goals of fighting climate change with calls to increase fuel supplies in the face of soaring prices.
In the draft review, the U.S. Bureau of Land Management (BLM) analyzed five potential options for the project, including ConocoPhillips’ proposal to build up to five drill sites, dozens of miles of roads, seven bridges and pipelines. It also considered a scaled down version with fewer drill sites and other infrastructure that would have less of an impact on wildlife such as caribou.
BLM said it will also consider not approving the project at all. The bureau will accept public comment on the alternatives for 45 days, which it will consider in its final decision.
In a statement, ConocoPhillips spokesperson Dennis Nuss said Willow was “a strong example of environmentally and socially responsible development that offers extensive public benefits.”
The analysis is being released nearly a year after Alaska District Court Judge Sharon Gleason vacated the BLM’s approval of Willow, saying the bureau had failed to consider greenhouse gas emissions from foreign oil consumption in its review.
Willow was approved by the administration of former President Donald Trump as part of his push to ratchet up fossil fuel development on federal lands. Alaskan officials hope the project will help offset declining oil production in the state.
Willow would be located inside the National Petroleum Reserve-Alaska, a 23-million-acre area on the state’s North Slope that is the largest tract of undisturbed public land in the United States.
The Willow project area holds an estimated 600 million barrels of oil, or more than the amount currently held in the U.S. Strategic Petroleum Reserve, the country’s emergency supply stored in caverns along the Gulf Coast.
Environmental groups reiterated their opposition to the project on Friday.
Alaska Wilderness League Conservation Director Kristen Miller, in a statement, called it “an unparalleled climate and biodiversity threat that puts President Biden’s climate legacy at risk.”
Pantheon Resources PLC spuds Alkaid-2 well on Alaska North Slope (proactiveinvestors.co.uk)
Phillip Whiterow, Proactive, July 7, 2022
“The long-term production test through the horizontal section will define the resource and aid the understanding and future development potential of Alkaid,” said Jay Cheatham, Pantheon’s CEO
Pantheon Resources PLC (AIM: PANR, OTC: PTHRF) said it has now spudded its Alkaid-2 well in Alaska with drilling reaching 300 feet on 6 July.
Alkaid-2 is Pantheon’s first horizontal well on the Alaska North Slope (ANS) and it is using Nabors 105AC, a larger rig than used in previous drilling, for the multiple functions planned.
Bob Rosenthal, Pantheon’s technical director, said: “We have discovered a lot of oil on the ANS across our Theta West, Talitha and Greater Alkaid projects which are estimated by management to contain over 23bn barrels of Oil in Place and over 2.3bn barrels of recoverable resource in those horizons that have flowed oil, and Alkaid -2 could add to these estimates.”
Objectives for the well are (over multiple formations) to test production from the oil formation encountered in Alkaid-1; to explore the deeper potential for oil in that zone, and to appraise an extension of oil discovered in the Shelf Margin Deltaic at Alkaid-1 and Talitha-1.
Alkaid-2 is adjacent to the Dalton Highway and Trans Alaska Pipeline System (TAPS), noted Pantheon, and approximately 4.5 miles from the Alkaid-1 discovery well drilled in 2015.
Pantheon added that while it believes the best way to exploit the anomaly is through +8,000-foot lateral sections, in this first well it will adopt a more conservative approach with a shorter lateral simply to minimise operational risk.
“A successful programme at Alkaid-2 would yield early cashflow which is of significant value at current oil prices,” it added.
The Alkaid-2 horizontal well will utilise unconventional oil production technologies applied to conventional oil reservoirs to maximize potential reserves and production, which it said has now become standard operating procedure across the entire ANS.
Jay Cheatham, Pantheon’s CEO, added: “As our first horizontal well, Alkaid-2 is an important operation for Pantheon.
“The long-term production test through the horizontal section will define the resource and aid the understanding and future development potential of Alkaid.
“But most importantly, if successful, it will begin generating revenue for the company.
“The Alkaid-2 well is the first production well in this new oil field using unconventional technology. As is typical in the industry, we will apply what we learn from this well to subsequent wells in order to optimise future drilling, testing, and production.”
“Commercial success at any standalone project, along with our geographic location, onshore and adjacent to export infrastructure in a low sovereign risk jurisdiction, would be transformational for Pantheon.”
U.S. LNG Outpaces Russia for First Time Ever as EU Opens Another Door for Natural Gas
Dustin Meyer, API Energy Blog, July 8, 2022
Major developments are underway in the world of natural gas, especially for U.S. liquefied natural gas (LNG).
The first comes from the International Energy Agency, which reports that for the month of June – for the first time in history – the U.S. supplied more natural gas to Europe than Russia sends by pipelines.
This is a remarkable achievement that would have been unthinkable even a few years ago and is indicative of the U.S. emerging as a leader in LNG just when the world needs it the most.
It’s also exactly what API President and CEO Mike Sommers had in mind when he wrote in March, at the beginning of Russia’s unjust invasion of Ukraine, that “America has Europe’s back.” (In 2021, Russia supplied the European Union with 45 percent of its natural gas imports and close to 40 percent of its total gas consumption.)
It’s also consistent with the European Union’s agreement to receive an additional 15 billion cubic meters of U.S. LNG this year as Western officials work to displace Russian gas and alienate Vladimir Putin.
Close readers of the API Blog may remember that API and our member companies were proud to help lay the groundwork for America overtaking Russia in supplying much-needed natural gas to Europe. (API is also involved with setting industry standards for safely transporting LNG around the world.)
In February, with Russian troops at the border of Ukraine, API convened a roundtable with European Commissioner for Energy Kadri Simson at her request to discuss the role of American LNG in bolstering the EU’s long-term energy security.
More from Sommers at the time:
“It was an honor to host Commissioner Simson for an informative and constructive dialogue on the critical role U.S. LNG can play in ensuring our European allies have access to a stable supply of reliable and affordable energy. Our industry is prepared to help the EU meet its energy needs amidst rising geopolitical tensions while furthering our shared energy security and decarbonization goals.”
Going forward, the U.S. is positioned to be an even larger supplier of gas to European and global markets. Recognizing the pace of demand growth, buyers from around the world are signing new long-term contracts for additional U.S. LNG and two new export projects (one in Louisiana, one in Texas) recently started construction. European buyers need U.S. LNG to replace Russian gas; other global buyers see it as a path to reduce their dependence on coal.
Either way, these investments create thousands of jobs in the U.S. while spurring economic growth – meaning America benefits just as much as our allies.
The critical role of natural gas is becoming ever more apparent. In another major development, the European Parliament on Wednesday voted in favor of including natural gas, in some circumstances, under its definition of “sustainable” sources of energy. As CNN reports, the new rules “could unlock billions of dollars of private investment … for natural gas and nuclear projects.”
Given an expected global population jump from 8 billion to 10 billion between now and 2050, the world will need all the energy it can get – from oil to natural gas to renewables. The conditions are there for natural gas to continue to replace coal while complementing rapidly rising generation from wind and solar – which we know from our own experience here in the U.S. is a winning recipe for significant CO2 emissions reductions.
These environmental benefits go hand-in-hand with energy security, which is front of mind for many right now, especially in Europe. The U.S. is meeting that challenge head on by supplying more natural gas than ever to our allies across the Atlantic and bolstering the global response to Russia’s cruel war in Ukraine.
Massive sulfides in Waterpump Creek core
Shane Lasley, North of 60 Mining News, July 8, 2022
Western Alaska encouraged by what it sees; assays pending
Western Alaska Minerals Corp. July 5 reported encouraging massive sulfide intercepts in four of the holes drilled so far this year at the high-grade Waterpump Creek carbonate replacement silver-zinc-lead target on its Illinois Creek project in western Alaska.
Based on previous exploration carried out by Anaconda Minerals Company and Novagold Resources Inc., Waterpump Creek hosts 166,000 tons of historical resource averaging 295 grams per metric ton silver, 16.1% lead, and 5.5% zinc.
Highlights from nine holes drilled by Western Alaska at Waterpump last year include:
• 16.7 meters (15.7 meters true-thickness) averaging 256 grams per metric ton silver, 0.7% zinc, and 6.4% lead from a depth of 23.2 meters in hole WPC21-02.
• 1.5 meters (1.4 meters true-thickness) averaging 1,337 g/t silver from a depth of 50.9 meters; and 9.7 meters (9.1 meters true-thickness) averaging 89 g/t silver, 6.3% zinc, and 7.7% lead from a depth of 63.1 meters in hole WPC21-03.
• 11.9 meters (11.2 meters true-thickness) averaging 149 g/t silver and 2% zinc from a depth of 35.6 meters in hole WPC21-05.
• 10.5 meters (9.1 meters true-thickness) averaging 522 g/t silver, 22.5% zinc, and 14.5% lead from a depth of 109.4 meters in hole WPC21-09.
The company reports that four of the 13 holes drilled so far this year – WPC22-07, WPC22-08, WPC22-011 and WPC22-13 – have cut significant massive sulfide. These intercepts include massive sphalerite (zinc mineral) and argentiferous galena (silver-rich lead mineral) in a matrix of secondary dolomite, which is similar to the high-grade intercepts cut during the 2021 drilling at Waterpump Creek.
Hole WPC22-07 cut 4.5- and 14-meter-thick zones of massive sulfide about eight meters apart. Likewise, hole WPC22-11 cut 11.5- and 3.6-meter zones of massive sulfide separated by 2.1 meters of gossan.
While Western Alaska is encouraged by the drill core observations, the company cautions that assays are pending from all the holes, and the significance of the massive sulfide zones will not be known until results are back from the lab.
The initial focus of drilling at Waterpump Creek has focused on expanding the mineralized footprint and to develop basic ore controls and trends of the high-grade mineralization encountered last year.
Initial drilling down-dip of WPC21-09 shows a major rollover of the dolomite stratigraphy into the high angle to vertical north-trending Waterpump Creek structure. Initial holes drilled in 2022 were east of the structure and did not encounter mineralization. Subsequent drilling along strike to the south of the WPC21-09 intercept shows mineralization occurs as massive carbonate replacement mineralization within the footwall dolomite immediately west of the Waterpump Creek structure.
Due to the sharp boundary between mineralized massive sulfide and unmineralized dolomite, which is common with carbonate replacement deposits, drill spacing has been tightened to a 25-meter grid in order to effectively target the resource expansion to the south. Current drilling is just over 100 meters south of the WPC21-09 and progressing south on 25-meter profiles.
In addition to drilling, a major system-wide CSAMT (controlled-source audio-magnetotellurics) geophysics program has just been completed over the roughly five miles (eight kilometers) between the Illinois Creek oxide gold-silver mineralization, Last Hurrah high-grade gold and Waterpump Creek target area. Inversion modeling of the CSAMT sections is ongoing.
Preliminary results, however, show a complex interplay of stacked thrusts and high-angle and possibly post-mineral faulting. The Waterpump Creek structure, which appears to be the major ore control at Waterpump Creek, is apparent over at least 3.7 miles (six kilometers) of strike within the CSAMT sections south from Waterpump Creek through Last Hurrah to just east of a major manto/gossan East Illinois Creek manto/gossan (flat-lying, bedded deposit/rust-colored oxide mineralization).
In addition to the Waterpump Creek structural zone, numerous other targets are apparent in the initial inversions. More definitive targeting and targeting discussion will be forthcoming as the data is completely processed.
From the American Energy Society, Energy Matters:
4 takeaways from the recent DoE Energy Jobs report (USEER):
- Energy industries added 300,000 jobs and grew 4% from 2020-2021, outpacing 2.8% growth in the overall workforce. More than 7.8 million Americans now work in energy.
- Clean energy—renewable energy, biofuels, transmission, distribution, storage, and energy efficiency—all saw growth in employment in 2021. Energy efficiency remained one of the largest employers in energy, with over 2.1 million jobs. Jobs in electric and hybrid vehicles saw a 25% increase.
- Although the US energy workforce is growing, economic opportunity is not being realized equitably. In particular, women and Black Americans are underrepresented across most energy industries relative to the overall US workforce and population.
- The most energy jobs were added in Michigan, Texas, and California, followed by Appalachia and the Midwest. Electric power generation saw high growth in the Midwest and West Virginia, and Pennsylvania had the highest percent growth for jobs in transmission, distribution, and storage. Florida also gained about 15,000 energy employees, with a third of those working in efficiency.