Today’s Key Takeaways: Haaland not “running department for keep it in the ground progressives.” Has crude oil market found a floor? Alaska’s Graphite One receives funding from DOD for feasibility study. Ford cutting price of EV pickup.
NEWS OF THE DAY:
Deb Haaland, first Indigenous interior secretary, defends oil project that divides Alaska Natives
Karen Heller, The Washington Post, July 17, 2023
As a member of Congress, Deb Haaland vehemently opposed the Willow oil drilling project on Alaska’s North Slope. But now as the head of the Interior Department, Haaland has become the public face of the Biden administration’s approval of the controversial project, our colleague Karen Heller reports.
The about-face underscores the tensions Haaland must navigate as the first Native American to lead a Cabinet department. It comes as some Indigenous Alaskans say Willow will provide crucial jobs and revenue for the region, while others say the ConocoPhillips project will hasten a climate catastrophe.
In an interview with Karen, Haaland acknowledged that the Willow approval was a difficult decision, especially after she sent a letter to Interior opposing the project as the representative for New Mexico’s 1st Congressional District from 2019 to 2021.
“I was very strong about that but when you come here, you can’t be like, ‘I’m the Department of Deb Haaland,’ right?” said Haaland, who reportedly choked up in a March private meeting with environmental groups and Indigenous leaders trying to prevent the decision.
“There are a million considerations,” she continued. “I’m not running this department for the progressives who want to keep it [oil] in the ground. This is for the whole country. And so I am dedicated to doing the job that I was hired to do and doing it in the right way. I mean, yes, I can insert my thoughts into things. But in the end, it has to be a decision that will benefit the country and certainly the region.”
It is also true, Haaland said, that “many Native Alaskans support Willow” because of its potential revenue and jobs. It would be wrong, she said, to think of Native people as a monolith.
“No tribe is the same,” Haaland said. “Even within pueblos, Indian tribes, we’re all different.”
OIL:
Oil surge to $80 suggests ‘stars are aligning’ for crude price rally that would endanger global economy
Grant Smith, Bloomberg/Forbes, July 16, 2023
Betting on a tighter oil market has been a bad trade for most of this year. But there are signs it’s finally paying off.
After languishing for months, crude surged above $80 a barrel in London last week as fuel demand in China and elsewhere recovers from the pandemic to reach new highs. That’s happening just as production cutbacks by Saudi Arabia and its OPEC+ allies are set to rapidly drain storage tanks around the world.
“We’re expecting a sharp tightening of the market,” Toril Bosoni, head of oil markets at the International Energy Agency in Paris, said in an interview with Bloomberg television. “As demand increases seasonally, we do think there’s a risk that prices will continue to increase into the third quarter.”
Besides rewarding bullish traders, that would boost energy producers from Texas to Moscow. It would also endanger the global economy, which has benefited recently from easing fuel costs and cooling inflation and affect the fortunes of political leaders — from the reelection bid of President Joe Biden, to the war waged in Ukraine by Vladimir Putin.
It’s still far from clear whether Brent crude’s return to $80 a barrel is a turning point that heralds a major price rally. Economic storm clouds still darken the horizon, from shaky Chinese indicators to rising interest rates, and barrels of cut-price crude continue to flood from Iran and Russia.
But at the very least, the market appears to have found a floor.
MINING:
Graphite One Awarded $37.5 Million Department of Defense Grant Under the Defense Production Act
July 17, 2023
Funding for feasibility study highlights graphite as a battery material “essential for the national defense”
CEO: DoD Grant “underscores confidence in our strategy to build a 100% U.S.-based advanced graphite supply chain”
July 17, 2023 – Vancouver, British Columbia –Graphite One Inc. (TSX-V: GPH; OTCQX: GPHOF) (“Graphite One”, “G1” or the “Company”), planning a complete domestic U.S. supply chain for advanced graphite materials, announced today that its wholly owned subsidiary, Graphite One (Alaska), Inc. was awarded a Department of Defense (“DoD”) Technology Investment Agreement grant of $37.5 million under Title III of the Defense Production Act (“DPA”), funded through the Inflation Reduction Act (“IRA”).
The funding objective of the DoD-Graphite One (Alaska) Technology Investment Agreement is to perform an accelerated Feasibility Study to modernize and expand domestic production capacity and supply for graphite battery anodes necessary for electronic vehicles and alternative energy batteries, as an essential national defense technology item.
The DoD grant to Graphite One follows the designation of graphite as one of the battery materials deemed under the DPA law to be “essential to the national defense.” At present, the U.S. is 100% import-dependent for graphite, with China being the world’s leading producer[1].
The DPA funding allows G1 to accelerate its Feasibility Study covering its Graphite Creek Project 35 miles north of Nome, Alaska. Graphite Creek was recently confirmed by the U.S. Geological Survey to be the country’s largest known graphite resource, and “among the largest in the world[2].”
DPA funding does not impact the permitting process for the Graphite One Project.
“Graphite One is honored to receive this award from the Department of Defense, funded by the IRA, and we look forward to advancing our Feasibility Study program,” said Anthony Huston, founder, and CEO of G1. “This Department of Defense grant underscores our confidence in our strategy to build a 100% U.S.-based advanced graphite supply chain – from mining to refining to recycling. The World Bank Group reports that the production of minerals, including graphite, could increase by nearly 500% by 2050, to meet the growing demand for clean energy technologies[3].”
“This investment to increase domestic capabilities for graphite exemplifies Industrial Base Policy’s commitment to building a resilient industrial base to meet current and future national defense requirements,” said Dr. Laura Taylor-Kale, Department of Defense Assistant Secretary for Industrial Base Policy. “The agreement with Graphite One (Alaska) is in furtherance of the Defense Department’s strategy for minerals and materials related to large-capacity batteries.”
“Graphite One thanks Assistant Secretary of Defense Taylor-Kale and her DPA Title III team for their support of our proposal, and we look forward to commencing the program,” Mr. Huston continued.
“All of us at Graphite One want to express our thanks for the strong support we’ve received from public officials whose mission it is to advance Alaska’s and America’s best interests,” said Mr. Huston. “Senator Lisa Murkowski, the thought leader in Congress on critical minerals policy from her position on the Senate Energy and Natural Resources Committee — and an early advocate of designating graphite and the other battery materials as Defense Production Act Title III materials; Senator Dan Sullivan, the driving force behind a U.S. Arctic Strategy from his position on the Senate Armed Services Committee with his past service as Alaska’s Director of the Department of Natural Resources; Congresswoman Mary Peltola, member of the House Natural Resources Committee and a strong proponent of domestic resource development — and of course the late Don Young, Dean of the House and from the very first, a strong supporter of our project. At the state level, Graphite One thanks Governor Mike Dunleavy for nominating us as a High-Priority Infrastructure Project, and for his commitment to making Alaska a leader in critical minerals development.”
Mr. Huston continued: “We also want to thank President Biden and his White House staff for the decision to designate graphite and the battery materials as DPA Title III materials, underscoring their importance for the national economy and national security.”
The total amount covered under the Technology Investment Agreement to fund the accelerated completion of the Feasibility Study is approximately $75.0 million of which the DOD’s share is $37.5 million and the Company’s share is $37.5 million.
POLITICS:
Ford cutting price of F-150 Lightning EV pickup
Nathan Bomey, Axios, July 17, 2023
Ford is cutting the price of its F-150 Lightning electric pickup by thousands of dollars — another sign of an intensifying EV price war.
Why it matters: The F-series truck is the best-selling vehicle in the country — and the F-150 Lightning version is among the first EV pickups on the market.
What’s happening: Ford is slashing all versions of the F-150 Lightning by a range of $6,079 to $9,979.
- The starting price of the base version is going from $59,974 to $49,995.
- The most expensive version, the Platinum Extended Range, is going from $98,074 to $91,995.
Zoom out: The move follows a series of price cuts this year by EV sales leader Tesla and comes after a decline in the price of lithium, which had been fueling EV price increases until recently.
- Automakers are also dealing with a growing glut of unsold EVs.
- And Tesla announced Saturday that it had assembled the first version of its Cybertruck.
- “Ford hears footsteps of Cybertruck and Rivian,” Wedbush Securities analyst Dan Ives said on Twitter after Ford’s price cut announcement.
What they’re saying: Ford attributed the price cuts to increased production capacity, better manufacturing efficiency and “improving” battery raw material costs.