TODAY’S KEY TAKEAWAYS: Jim Beam using byproduct from whiskey-making process to make natural gas. Aramco CEO points to underinvestment in oil and gas as leading cause of energy crisis. AKLNG on the charts for pipeline projects moving forward. New environmental study on Ambler Road looking for public input. Workarounds for permitting reform.
NEWS OF THE DAY:
Jim Beam Is Making Renewable Gas from Bourbon
Haley Zaremba, OilPrice.Com, September 20, 2022
- It seems that nearly every sector on earth has been touched by the renewable revolution, with Jim Beam’s famous Kentucky whiskey the latest company attempting to “go green”.
- Jim Beamis going to increase capacity at its Booker Noe distillery by 50% while reducing its emissions by the same amount by using renewable gas.
- The facility will use a byproduct of the whiskey-making process to make the natural gas, a process that will create high-quality fertilizer that it intends to make available to local farmers.
The renewable energy revolution just got a whole lot more fun. The Beam Suntory company has announced that it’s going to be increasing its production of Kentucky bourbon using the power of renewable gas. In order to meet the growing demand for whiskey, Jim Beam is going to increase capacity by a whopping 50% at its Booker Noe distillery in Boston, Kentucky while also reducing its greenhouse gas emissions by the same percentage. A recent press release from Jim Beam and its Japanese parent company Suntory announced a $400 million investment in a renewable biogas system. “This expansion will help ensure we meet future demand for our iconic bourbon in a sustainable way that supports the environment and the local community that has helped build and support Jim Beam,” CEO Albert Baladi said.
Beam Suntory is building its renewable biogas facility 36 miles south of Louisville, Kentucky. The facility, which will be built across the street from the Booker Noe distillery, will use otherwise wasted byproduct (known as ‘spent stillage’) from the whiskey-making process to be converted into fuel through the use of “digesters.” The result is a so-called ‘renewable natural gas’ that will be piped right back into the distillery in a sustainable closed-loop system. The digesters will also produce a high-quality, low-cost fertilizer which Beam Suntory says they will make available to local farmers, “thereby supporting sustainable and regenerative agricultural practices.”
Renewable natural gas is an industry term for a biogas that has been upgraded to be used in place of fossil fuels. It’s often seen as a “bridging fuel” which diverts methane and carbon emissions by making use of waste products, allowing entities like Beam Suntory to lower their carbon footprint without totally revamping their infrastructure. As such, biofuels are a lower emissions steppingstone between our current carbon-based economy and a future energy landscape that won’t revolve around fuels that emit any greenhouse gasses whatsoever. Biomethanes and biogases such as the ‘renewable natural gas’ to be produced for Jim Beam have much lower carbon dioxide and methane emissions than standard natural gas, but their emissions are not null – in fact, they are underestimated.
While biogas and biomethane are not perfect, they are a huge step in the right direction and will create a considerable positive impact on Jim Beam’s ecological footprint – all while ramping up production of the good stuff. The biogas-fueled expansion project is supposed to be completed by 2024. By then, Suntory Bean says that the Booker Noe distillery will be 65% renewable natural gas-powered. What’s more, the project is expected to be a considerable job creator in the region.
As natural gas prices soar around the world, the move makes good economic sense, and will hopefully set a precedent in Kentucky, where 95% of the world’s bourbon is made. Lowering production costs is a good goal in any environment, but it’s especially attractive now when demand for both natural gas and alcohol is soaring. In the first half of 2022, Beam Suntory’s global net sales grew by 13% according to company reports.
Alcohol consumption climbed to new heights during the pandemic, ushering in a “new golden age” for the booze industry, as well as some very worrying trends for the health sector and addiction specialists. And alcohol demand is expected to keep climbing. A market analysis report from Grand View Research finds that the “global alcoholic drinks market size was valued at USD 1,448.2 billion in 2021 and is expected to expand at a compound annual growth rate (CAGR) of 10.3% from 2022 to 2028.” For those of us who enjoy a responsible nip now and then, the whiskey-fueled renewable revolution does seem like a golden age, indeed.
OIL:
I Told You So: Aramco CEO Slams Unrealistic Energy Policies
Tsevatana Paraskova, OilPrice.Com, September 20, 2022
Years of underinvestment in oil and gas production is the leading cause of today’s energy crisis, and when the global economy rebounds from the current slowdown, the little spare oil production capacity that’s left will be wiped out, Saudi Aramco’s chief executive Amin Nasser said on Tuesday.
“Many of us have been insisting for years that if investments in oil and gas continued to fall, global supply growth would lag behind demand, impacting markets, the global economy, and people’s lives,” the CEO of the world’s largest oil company and top oil exporter said at the Schlumberger Digital Forum 2022 in Switzerland today.
Investment in oil and gas more than halved between 2014 and 2021, Nasser said, adding that “The increases this year are too little, too late, too short-term.”
Back in 2014, annual investment in oil and gas was $700 billion, which dropped to just over $300 billion last year, Aramco’s top executive said.
“These are the real causes of this state of energy insecurity: under-investment in oil and gas; alternatives not ready; and no back-up plan. But you would not know that from the response so far,” he added, reiterating a long-held view of Saudi Arabia that underinvestment in previous years will come back to bite energy supply.
“Even with strong economic headwinds, global oil demand is still fairly healthy today,” Nasser said.
“But when the global economy recovers, we can expect demand to rebound further, eliminating the little spare oil production capacity out there. And by the time the world wakes up to these blind spots, it may be too late to change course,” he added.
“That is why I am seriously concerned.”
Saudi Aramco called once again for more investment in oil and gas, especially capacity development.
“And at least this crisis has finally convinced people that we need a more credible energy transition plan,” Aramco’s CEO added.
Saudi Arabia has plans to boost its production capacity to 13 million barrels per day (bpd) by 2027, from around 12 million bpd now, but not much further above that. The Kingdom is one of just two major oil producers believed to hold some additional spare capacity now. The other producer is fellow OPEC member the United Arab Emirates (UAE).
GAS:
US gas pipeline projects move through volatile market toward service dates
S & P Global Intelligence, September 15, 2022
A substantial amount of U.S. natural gas transportation and storage infrastructure will move through the development cycle in the next five years as the nation balances energy needs with climate concerns.
A wave of pipeline projects with a total gas transportation capacity of about 17 million Dth/d is expected to enter service in 2023, S&P Global Market Intelligence data showed. The total capacity volume of project starts is slated to drop slightly in 2024 and shrink to almost nothing in 2025. The volume is expected pick back up in 2026 to over 12 million Dth/d with the scheduled arrival of the 2 million-Dth/d Mountain Valley Pipeline LLC mainline project and others.
MINING:
New environmental study of Ambler Road project kicks off with call for public input
Yereth Rosen, Alaska Beacon, September 20, 2022
The U.S. Bureau of Land Management said it will start collecting public input on how it should carry out a new environmental review of the controversial Ambler Access Project.
The scoping period for a supplemental environmental impact statement on the project starts on Tuesday and will run for 45 days, the BLM said Friday. Scoping is the initial phase in the review process in which issues to be studied and addressed are identified.
“Diverse, on-the-ground perspectives are vital in promoting co-stewardship and ensuring resilient landscapes,” BLM Fairbanks District Manager Geoff Beyersdorf said in a statement. “We are eager to hear from the public, Tribes and corporations to aid in helping us make an informed, durable decision.”
The BLM committed to conduct the supplemental environmental impact statement to correct what Interior Secretary Deb Haaland and other department officials said were deficiencies in an environmental review conducted by the Trump administration.
The Trump administration followed up its own EIS process by granting a right-of-way in 2020 that allows the Alaska Industrial Development and Export Authority to proceed with the 211-mile road through the Brooks Range foothills to the isolated Ambler mining district in northwestern Alaska.
AIDEA, a state corporation focused on development, is proposing to build the road to enable commercial development of mines that would produce copper and other metals. The main beneficiary of the road would be Ambler Metals LLC, a joint venture of Vancouver-based Trilogy Metals Inc. and the Australian mining company South32. NANA Corp., the regional Native corporation in that part of the state, also has a partnership arrangement because it owns some of the mining property.
The commitment to conduct a supplemental EIS and to pause the right-of-way approval, announced in February, came in response to lawsuits that sought to overturn the Trump administration approval.
Critics say the road and its associated development will damage habitat used by the Western Arctic Caribou Herd, one of the largest caribou herds in North America, and important environmental and cultural values. Haaland and other Interior officials concluded that the Trump administration’s review did not properly consult with tribal governments or consider subsistence and cultural concerns.
A draft supplemental environmental impact statement, or SEIS, is expected to be published in the second quarter of 2023, the Interior Department said in a status report filed Friday in U.S. District Court. Notice of the start of scoping, one of the formal steps required under the National Environmental Policy Act, emphasizes that “input of Alaska Native Tribes and Corporations will be of critical importance to the SEIS,” Interior’s status report said.
The BLM’s approach to the impact statement has been criticized by both road supporters and opponents.
Supporters of the road argue that the new environmental analysis is unnecessary and amounts to a delaying tactic by the Biden administration. Opponents of the road argue that the right-of-way should have been scrapped entirely rather than suspended and that the new analysis is too narrowly focused, leaving some deficiencies unaddressed.
POLITICS:
The MVP: It’s not final yet, but the Manchin-Schumer permitting reform outline, which according to Manchin’s office represents what’s been agreed to between the senator and leadership, ostensibly wants to do the same kind of workaround for the Mountain Valley Pipeline.
It proposes to “require the relevant agencies to take all necessary actions to permit the construction and operation of the Mountain Valley Pipeline and give the DC Circuit jurisdiction over any further litigation.”
Republicans’ permitting counter proposal does, too. It implicates more of the U.S. code governing environmental stewardship than just NEPA, and also proposes to preempt judicial decision making.
The bill would direct the secretary of the Army to issue permits or verifications to complete the MVP across the waters of the United States (Clean Water Act). It also directs the agriculture secretary to reissue the biological statement for the MVP (Endangered Species Act) such that it’s “substantively identical to the biological opinion” issued during the Trump administration.
The Fourth Circuit Court of Appeals just vacated that biological opinion in February.
From the Washington Examiner, Daily on Energy