Today’s Key Takeaways: Threats and opportunities for clean energy in 2023. Renewable energy growth with the help of the oil industry (not wind or solar). Hilcorp continues to invest in Cook Inlet. American Pacific Mining contributes to Palmer Project. WOTUS rewrite quietly dropped by EPA – federal power grab gives EPA too much discretion.
NEWS OF THE DAY:
Huge opportunities and huge threats loom for US clean energy in 2023
Jeff St. John, Canary Media, January 2, 2023
Wind and solar deployment fell steeply in 2022. Can the Inflation Reduction Act help build it back this year?
It was the best of times, it was the worst of times. Observers of U.S. clean energy markets might be feeling like they’re trapped in a Dickens remake: A Tale of Two Diverging Market Trends.
Never have the long-term prospects for clean energy investment been stronger — and yet, it’s been half a decade since U.S. clean energy deployments have been as weak as they were this year.
Canary Media has been tracking the factors that have driven this confluence of enormous potential and lagging performance. On the downside, we’ve got the supply-chain disruptions and inflationary pressures from the Covid pandemic and the war in Ukraine. Trade restrictions on solar goods from China are mounting. And backlogs for utility-scale wind, solar and energy-storage projects to interconnect to the grid are becoming longer and increasingly costly.
On the upside, states are setting ever more aggressive clean energy mandates. Corporate customers are upping their demand for carbon-free energy. And the passage of last year’s infrastructure law and this year’s Inflation Reduction Act have brought a record-breaking amount of federal money to the table for clean energy.
In November, the American Clean Power Association trade group released its third-quarter 2022 report, highlighting the pent-up state of the market. This map of projects in development and construction pipelines shows just how much clean energy is being planned and built across the country.
OIL:
Meet the renewable energy source poised for growth with the help of the oil industry
Ben Lefebvbre, Kelsey Tamborrino, Politico, January 1, 2023
Companies already normally associated with oil and gas drilling in the United States have started delving more deeply into geothermal projects
One of the oldest forms of clean power is ready for a comeback — and it’s not wind or solar.
Geothermal energy — the technology that harnessesthe heat beneath the Earth’s crust — is drawing fresh interest after lawmakers boosted funding flows for it in the bipartisan infrastructure law and Inflation Reduction Act, dovetailing with advances in technology, new state incentives and interest from the oil drilling sector.
Whilethe next generation of geothermal projects are still in the early stages of development, advocates say the underground energy source has the potential to supply more than 60 gigawatts of firm, flexible power by 2050 — a more than 15-fold jump from the 3.7 GW of capacity it now has in the United States.
“Not since, say the 1970s, where there was a huge pivot to the geothermal side of the house, have we seen the type of interest that we’re seeing today,” said Kelly Blake, president of the board of directors at Geothermal Rising, a geothermal-focused trade association.
“It just really seems as though geothermal has an upward trajectory at the moment, in terms of innovation, funding, interest at all levels of business, but also the government,” Blake added.
The Biden administration is pushing oil and gas companies to take a serious look at incorporating geothermal projects into their business plans. At a December meeting of the National Petroleum Council, Energy Secretary Jennifer Granholm described geothermal as a favoritetopic of hers.
“That’s kind of irresistible when you consider the skills set and the know-how that this industry already has in extracting energy from the subsurface,” Granholm told the gathering of oil companies executives, which included Exxon CEO and ChairDarren Woods. “I know you manage [carbon] molecules, but you can manage a lot of things. Think: You drill holes, too. You go beneath the surface, you know where things are. And fracking really opens up a huge opportunity for enhanced geothermal.”
GAS:
Hilcorp Energy strengthens its dominant position as Cook Inlet leaseholding in Dec. 30 state, federal offshore sales
Tim Bradner, January 2, 2023
Hilcorp Energy strengthened its position as the dominant leaseholder in Alaska’s Cook Inlet with the addition of six state of Alaska offshore leases and one federal lease, also offshore, in two state and federal sales held Dec. 30.
Hilcorp bid $360,000 for the six state tracts, which are mostly adjacent to existing lease positions. The company is also the dominant oil and gas producer in the Inlet.
Alaska officials said they were pleased at the company’s continued interest in the inlet, from where Hilcorp supplies natural gas that fuels space heating and power generation for Alaska’s largest communities.
“These initial results show Hilcorp is continuing their investment and development in Cook Inlet after bidding on their first Alaska leases ten years ago. This was among the better results in recent years,” for Cook Inlet, Alaska’s Department of Natural Resources said in a statement.
There was only one bid submitted in the state’s previous Cook Inlet oil and gas lease sale in May 2022 and prior state sales had seen no bids.
Hilcorp was also the only bidder in the federal OCS Sale 298, which offered leases in lower Cook Inlet south of state submerged lands in the upper Inlet.
The result was no surprise. The U.S. Bureau of Ocean Energy Management had cancelled the sale last May due to lack of industry interest, but it was added back to the agency’s five-year schedule in the federal Inflation Adjustment Act of 2022 at the insistence of West Virginia U.S. Sen. Joe Manchin.
Prior Lower Cook Inlet OCS sales have drawn little interest with some sales being cancelled and others drawing no bids when a sale was held. Hilcorp did bid on 14 tracts in a 2017 Inlet OCS sale but there were no bids in a 2004 sale and just two bids in a 1997 sale.
Hilcorp spokesman Luke Miller did not comment on the company’s plans for new leases but emphasized Hilcorp’s role as a producer of natural gas that fuels the Southcentral region.
“Hilcorp is proud of our work to revitalize Cook Inlet natural gas production – an energy source that nearly two-thirds of Alaskans depend on to heat and power their homes and businesses.,” Miller said in a statement.
READ MORE
MINING:
American Pacific Mining Announces Joint Venture Contribution to Palmer Copper-Zinc Project in Alaska
American Pacific Mining Corp, Yahoo! Finance, December 28, 2022
American Pacific Mining Corp (CSE: USGD / OTCQX: USGDF / FWB: 1QC) (“American Pacific” or the “Company”) is pleased to announce that, through its wholly owned subsidiary, Constantine North Inc., it has contributed funds totaling US $1,497,537 to maintain its 41.08% ownership of the Palmer VMS project (“Palmer” or the “Project”) in Alaska. Dowa Metals & Mining Alaska (“Dowa”), the Company’s joint venture (“JV”) partner, maintains its 58.92% ownership.
“This contribution affirms our commitment to our JV partnership with Dowa Metals & Mining,” commented CEO Warwick Smith. “We believe acquiring this JV interest during a challenging year in the junior resource sector puts us on track to realize significant value as the high-grade VMS Palmer Project advances with additional drilling and exploration programs next year and beyond. We look forward to collaborating with Dowa during early Q1/2023 to jointly develop and finalize next year’s work program.”
American Pacific Mining is the project manager for the Palmer Project and receives a 7% management fee on all qualified expenditures.
Palmer is a high-grade volcanogenic massive sulphide-sulphate (“VMS”) project located in an accessible part of coastal Southeast Alaska with road access and within 60 kilometres of the year-round deep-sea port of Haines. The Project has an indicated mineral resource estimate of 4,677,000 tonnes at 10.21% zinc equivalent (3.92% copper equivalent) and inferred 9,594,000 tonnes at 8.87% zinc equivalent and 3.4% copper equivalent), with the 2019 PEA outlining a US$266 million after-tax NPV at a 7% discount rate1.
POLITICS:
Biden Admin Blasted for ‘Quietly’ Changing Rule on Water on Last Day of the Year
John McCann, The Western Journal, January 1, 2023
With the apparent goal of protecting American wetlands, the Biden administration has revised the legal definition of the term “waters of the United States,” or WOTUS, bringing the ire of many congressional Republicans.
This move by Biden’s Environmental Protection Agency comes while an important case regarding the EPA is being heard by the Supreme Court.
According to the New York Times, the revised definition reverts to language from before 2015, when the Obama administration made big changes that led to a multitude of legal challenges.
The new EPA rule clarifies what bodies of water are subject to federal jurisdiction and what wetlands are excluded from federal regulation, but critics see it as a federal power grab that gives the EPA far too much discretion.
As reported by CNBC, the rule also revokes past changes made by President Trump to lessen the EPA’s regulating ability.
Members of the Congressional Western Caucus released a statement condemning the EPA’s last-minute rule change, arguing that it gives the EPA far too much discretion and power.
“This rule is yet another bureaucratic attack on rural America,” said Caucus Chairman Dan Newhouse of Washington state.