Todays Key Takeaways: Final SEC climate disclosure rule to be watered down. World oil demand exceeds expectations. “Responsible resource development shouldn’t be scapegoated, particularly when the minerals are needed for technologies to fight climate change — which is the greatest threat to caribou and all wildlife.”
NEWS OF THE DAY:
REUTERS REPORTS CLIMATE DISCLOSURE RULE EXPECTED TO BE WATERED DOWN: Officials at the Securities and Exchange Commission have told lobbyists and corporate executives in recent days that they expect that the final climate disclosure rule will scale back requirements related to Scope 3 emissions, Reuters reported this morning.
Why it matters: Scope 3 emissions, of course, account for emissions generated by a company’s supply chain and in the use of its products, meaning that Scope 3 is the whole ballgame for oil and gas companies. The SEC’s proposed rule, put out last year, would require Scope 3 disclosures when they would be “material” to investors.
Weakening Scope 3 disclosures would mean blowback from the left: Prominent liberal members of Congress, such as Sen. Elizabeth Warren of Massachusetts, have joined with environmental groups to pressure SEC Chairman Gary Gensler not to back off stricter Scope 3 disclosure requirements.
Yet a major consideration for Gensler is the possibility that mandating Scope 3 disclosures could increase the risk that the final rule would not withstand the inevitable legal challenges.
From the Washington Examiner, Daily on Energy, November 20, 2023
World Oil Demand Continues to Exceed Expectations
Andreas Exarheas, Rigzone, November 20, 2023
World oil demand continues to exceed expectations, the International Energy Agency (IEA) stated in its latest oil market report (OMR), which was released recently.
“We have slightly revised up our 2023 growth forecast to 2.4 million barrels per day, as U.S. deliveries proved more resilient than indicated by preliminary data and Chinese oil demand in September set another all-time high above 17 million barrels per day, fueled by a booming petrochemical sector,” the IEA noted in its November OMR.
“Those gains have come to the detriment of petrochemical producers elsewhere, most notably in Europe and advanced economies in Asia and Oceania. Indeed, the two regions saw 3Q23 oil demand slump by a combined 560,000 barrel per day year on year,” the IEA added in the report.
What you may have missed in the Ambler Road environmental report
Ramzi Fawaz, President and CEO, Ambler Metals, November 19, 2023
Last month, the long-awaited draft environmental report for the Ambler Road was released to the public by the Bureau of Land Management (BLM). Now that the report is public, Alaskans have an opportunity to weigh in on the road through public meetings or submitting comments through the BLM website. As a company that is committed to responsibly developing resources in the Ambler mining region, Ambler Metals has carefully reviewed this extensive document. What follows are areas of the report that I believe have either been overlooked in news reports or deserve additional scrutiny.
First and foremost, the report raises the possibility that the road could eventually be open to the public, raising unwarranted fears from local communities. It’s important to reiterate that the road will be a private industrial-access-only road. This is a top priority for the local communities and one Ambler Metals takes very seriously. Contrary to the report, there is substantial precedent in Alaska for strict industrial-private access roads that have operated for decades without significant unauthorized use, such as the Red Dog Road and Pogo Mine Road. Further, the Alaska Industrial Development and Export Authority (AIDEA) has committed to working with local communities to establish long-term rules for use of the road after it is no longer used for industrial purposes.
Far from posing a threat, the Ambler Road would bring numerous benefits for local Native communities, creating good-paying jobs and attracting economic investment. These communities need these jobs particularly as the Red Dog mine prepares to close over the next decade. I raise this because the report doesn’t give enough attention to the importance of the economic benefits and the direct and indirect jobs that the project will create. Critically, the road will also deliver more affordable access to goods and fuel in places where a gallon of gas can cost as much as $18. However, the report does point out that emergency and law enforcement services will be able to better access these rural communities, while also easing access to the internet and telemedicine care.
Activists who are opposed to the road often overstate the environmental impact, and it’s disappointing to see this report make similar exaggerated claims. Suggesting this project will damage fish habitat and caribou herds is simply not accurate, plus it contradicts other areas of the report. For example, the report points out there will be culverts that will allow fish passage without any interruption. There should also be recognition that the conservation efforts led by the Red Dog mine have actually improved the health of local streams and restored fish populations. Alaska has demonstrated that mining, road construction and conservation can go hand in hand.
The report also cites multiple studies stating that the migration routes of caribou herds along the Dalton Highway, for example, have not changed. The fact is caribou herd populations have natural, cyclical changes, and there is no scientific consensus on what leads to population increases or decreases. Responsible resource development shouldn’t be scapegoated, particularly when the minerals are needed for technologies to fight climate change — which is the greatest threat to caribou and all wildlife.
To that point, while the report points to some impact from carbon emissions resulting from road use, it does not take into account the emissions reductions resulting from clean energy technologies that will be made from critical minerals produced in the region. These minerals are crucial to reaching climate goals without relying on adversarial nations like China and would be produced under some of the most stringent environmental regulations anywhere in the world. Those critical minerals will be stranded without the Ambler Road.Alaska has a very strong track record of responsible resource development while protecting the surrounding landscape and wildlife, and it’s my hope that BLM, with the support of Alaskans, will move this project forward.