News of the Day:
From the Washington Examiner, Daily on Energy:
THE LATEST MIDNIGHT RULE: The Office of the Comptroller of the Currency has quickly finalized a rule seeking to prevent big banks from dropping or restricting their investments in fossil fuel companies.
The Trump administration’s November proposal made it clear the action was responding in large part to Republican criticism that big banks such as Citigroup, JP Morgan, Morgan Stanley, and Wells Fargo were refusing to invest in new oil and gas drilling in the Arctic. The rule says big U.S. banks can’t restrict specific industries from accessing lending or other financial services and must instead undertake an “individual” and “impartial” assessment of investment risk.
The proposal drew backlash from both big banks and Democrats, but the OCC turned around a final version in just 10 days (which is lightning fast in regulatory timelines) with little changes. The OCC did remove language from the proposal that directly called out banks for refusing to lend to oil and gas companies and said they were “unequipped” to assess risks such as climate change “unrelated” to financial exposure.
Republican lawmakers lauded the OCC’s move. “No matter how important their services are, they do not have the right to create de-facto bans on legal businesses like energy producers and gun manufacturers,” said North Dakota Sen. Kevin Cramer.
Environmental groups such as Friends of the Earth, however, are calling on Democrats to make the final rule a top target for cancellation under the Congressional Review Act (see yesterday’s newsletter to learn all about the CRA). The rule also doesn’t take effect until April 1, making it subject to a memo Biden is expected to issue day one to freeze all Trump actions that haven’t formally taken effect yet.
OIL AND GAS:
How does Alaska rank in the 2020 US/Canada Energy Sector Competitiveness Survey?
Fraser Institute, January 2020
A great report on competitiveness. Alaska ranks 13 out of 21 jurisdictions surveyed. Alaska was the worst performer on uncertainty concerning disputed land claims with 58 percent of respondents saying they were deterred by this factor.
Why Northern Dynasty Minerals Jumped 14% Today
Howard Smith, The Motley Fool, January 13, 2021
The decision on the Pebble Mine project may not be final as the Alaska governor steps in.
Investors are breathing some life back into Northern Dynasty Minerals (NYSEMKT:NAK) today after it was virtually left for dead late last year. As of 3:30 p.m. EST, shares are up 9% after being as much as 14% higher earlier in the day.
The company’s Alaskan Pebble Mine project was virtually killed late last year when the U.S. Army Corps of Engineers rejected the company’s response in addressing environmental issues related to dredged materials and waste fluids. Shares sank more than 55% on that news.
Yesterday, however, the company announced Alaskan Gov. Mike Dunleavy’s administration will formerly appeal the Army Corps’ denial of a key federal permit for the project.
Alaska lawmakers return to a state Capitol locked down for COVID-19
James Brooks, Anchorage Daily News, January 13, 2021
The 32nd Alaska State Legislature convenes on Tuesday, and legislators will be working under conditions unlike any faced by lawmakers before. Masks are mandated, and everyone in the building is taking two COVID-19 tests per week. Plexiglass divides the desks and the galleries in the House and Senate chambers.
The public has been banned from the building, spectators replaced by robotic cameras in every committee room. Once per day, everyone entering the building must have their temperature taken and answer a questionnaire asking whether they’ve been exposed to someone with COVID-19.
CLIMATE CHANGE CONVERSATIONS:
Oil majors deepen push into offshore wind
Ben Geman, Axios, January 14, 2021
This week brought new signs of multinational oil majors’ deepening push into offshore wind.
Driving the news: France’s Total is teaming up with Spain-based global power giant Iberdrola to develop what they say will be one of the world’s largest offshore wind farms off Denmark’s coast.
- “The 50/50 partnership has been pre-qualified by the Danish Energy Agency to submit a bid for the Thor offshore wind farm in the Danish North Sea,” the companies said.
- The project will have power generating capacity of up to 1 gigawatt and it is slated to come online as soon as 2025, they said this morning.
Driving the news, part 2: New York State officials yesterday announced contracts with Equinor, the Norway-based global oil giant, for a pair of offshore wind projects.
- The two farms will have a combined capacity of nearly 2.5 gigawatts, Equinor said of the projects — Empire Wind 2 and Beacon Wind 1.
- They come on top of Equinor’s planned Empire Wind 1 project off New York. BP is Equinor’s strategic partner in the developments.
Yes, but: Renewables and low-carbon energy overall are currently a small part of oil majors’ overall capital spending, with fossil fuels remaining their dominant business lines.
The big picture: Via Reuters, “European oil firms such as Equinor and BP are under pressure from activists, banks, investors and some governments to shift away from fossil fuels, and analysts say offshore wind farms are probably the quickest way for them to do so.”