Today’s Key Takeaways: Alaska lawsuit over canceled leases filed on Alaska Day. Murkowski to Biden “looking in all the wrong place for energy.” IGU warns of under-investment in gas supply. Mining on the moon in 2024! Thoughts on the 50th anniversary of 1973 oil embargo.
NEWS OF THE DAY:
Alaska development agency sues federal government over canceled oil leases
Yereth Rosen, Alaska Beacon, October 19, 2023
Lawsuit seeking to reinstate Arctic National Wildlife Refuge
Alaska’s industrial development agency on Wednesday sued the Biden administration in an attempt to revive its Arctic National Wildlife Refuge oil and gas leases.
The lawsuit filed by the Alaska Industrial Development and Export Authority alleges that the Department of the Interior violated federal laws and its own regulations when it canceled refuge leases last month.
Interior’s actions were politically motivated and illegally deprived AIDEA and the state of the economic benefits that would come from drilling in the refuge’s coastal plain, an area that is known to contain oil, the lawsuit argues.
“Cancellation of the lease agreements eliminates AIDEA’s property rights in exploring and developing these leases and prevents all of the expected benefits that would have come from developing an oil and gas program on these lands, seriously harming AIDEA,” said the lawsuit, filed in U.S. District Court in the District of Columbia.
AIDEA was the main bidder in the ANWR lease sale held in January 2021 as one of the Trump administration’s last actions. One small oil company and one Anchorage real estate company submitted the only two other bids.
Biden administration suspends sanctions on Venezuelan oil, gas for 6 months
Alan Kovski, Oil and Gas Journal, October 19, 2023
The Treasury Department announced Oct. 18 that the Biden administration will temporarily suspend sanctions on exports of Venezuelan oil and investments in the country’s oil and gas sector now that progress has been announced on negotiations for political reform in Venezuela.
Treasury said it “issued a 6-month general license temporarily authorizing transactions involving the oil and gas sector in Venezuela. The license will be renewed only if Venezuela meets its commitments under the electoral roadmap as well as other commitments with respect to those who are wrongfully detained.”
The suspension will stay in place until 12:01 a.m. Apr. 18, eastern daylight time. It will apply to:
- Production, lifting, sale, and exportation of oil or gas from Venezuela, and provision of related goods and services.
- Payment of invoices for goods or services related to oil or gas sector operations in Venezuela.
- New investment in oil or gas sector operations in Venezuela.
- Delivery of oil and gas from Venezuela to creditors of the government of Venezuela, including creditors of state-owned oil and gas company Petroleos de Venezuela SA entities for the purpose of debt repayment.
Venezuela exports crude oil and refined products but not natural gas. However it does have substantial domestic sales of natural gas that could be affected by the suspension of barriers to production and related goods and services.
Sen. Lisa Murkowski (R-Alas.) was especially angered to hear of the Venezuela sanctions suspension after a string of recent policy decisions restricting oil and gas work in Alaska. The Interior Department Sept. 6 revoked oil and gas leases issued for tracts on the coastal plain of the Arctic National Wildlife Refuge and reduced the acreage available for leasing in the National Petroleum Reserve-Alaska (OGJ Online, Sept. 7, 2023). Then Interior chose to leave Alaska’s Cook Inlet out of the next 5-year offshore oil and gas program (OGJ Online, Sept. 29).
The Biden administration is “looking in all the wrong places for energy” and “easing up on the worst regimes in the world,” Murkowski wrote in a Facebook post Oct. 18.
Gas Lobby Warns of Price Shocks Without Investment in New Supply – BNN Bloomberg
Anna Shiryaevskaya, Bloomberg News, October 19, 2023
The world’s natural gas supply will slump in the coming decades without fresh investment, leading to more severe and frequent price shocks than those of the past two years, a lobby group said.
Despite enduring demand for gas as a bridge fuel in the energy transition, supply is expected to crash following a 58% cut in investment from 2014 to 2020, the International Gas Union said. While spending has since edged up, differing forecasts for consumption and ambitious net zero policies hamper future planning.
“Restoring a sustainable balance in the global gas market is imperative and requires addressing the existing supply shortfall,” the IGU said in a report prepared with consultants Rystad Energy AS and Italian gas-grid operator Snam SpA. Investments are needed “to cope with natural supply decline, global demand dynamics, and likely growth in several regions.”
Countries in Europe have scrambled to secure new gas supplies after Russia’s invasion of Ukraine upended markets and prompted nations to prioritize energy security over green targets. Confidence in the fuel’s lasting appeal was evident in two long-term liquefied natural gas deals struck with Qatar this month.
Still, “uncertainty over the LNG market’s future trajectory and the role of gas in the energy transition continues to weigh heavily on — and in some cases delay — investment decisions,” the IGU said. “The level of future natural gas supply has been largely left to chance.”
Existing and approved gas production worldwide will reach about 4.1 trillion cubic meters this year, before sliding to an estimated 3.1 trillion in 2030 as fields mature. Output is seen shrinking to just under 1 trillion cubic meters by midcentury, the report showed.
The surge in large-scale investments in renewables may make it challenging to obtain adequate capital for gas projects, even as most demand scenarios call for additional exploration.
Balancing these needs “adds risk to both existing and future energy systems and calls for sound policies and incentive-based frameworks,” the IGU said. “There are challenges and significant uncertainty on how future gas projects will be developed and maintained.”
Asteroid mining startup to launch mission in early 2024
Staff Writer, Battery Metals Digest/Mining.Com, October 19, 2023
AstroForge, a US-based startup with plans to mine asteroids, is fine-tuning details for the launch of a spacecraft in the first quarter of next year, which would make it the first private company to visit an M-type asteroid and operate in deep space.
AstroForge’s mission will continue further until reaching an M-type asteroid, which contains higher concentrations of metal than regular asteroids. If successful, it would mark a significant milestone on the startup’s mission to commercially mine asteroids for critical resources.
The California-based firm successfully test fired in September the rockets that will allow Brokkr-2 reach the target celestial body, located 35.4 million km (22 million miles) from Earth. This was a crucial step before the spacecraft is integrated with the SpaceX rocket next year.
The ride-share trip, chartered by Intuitive Machines, would be the final step of Brokkr-2’s flyby to simulate a projected round-trip mission. After that, the company will install the last needed pieces to the vehicle and the rest of the spacecraft will be built around the system, it said.
AstroForge estimates that it would take about nine months to reach the M-type asteroid, with the overall mission lasting about two years.
U.S. energy needed “now more than ever” amidst Israel-Hamas conflict, API president says on 1973 Oil Embargo anniversary
Oil and Gas 360, October 19, 2023
The American Petroleum Institute (API) President and CEO Mike Sommers delivered remarks at the Hudson Institute marking the 50th anniversary of the 1973 Oil Embargo.
Sommers acknowledged the parallels between the 1973 crisis in the Middle East that led to the embargo and the crisis unfolding today, expressing strong support for President Biden’s opposition to Hamas-led terrorism and reiterating the need for American leadership on the global stage.
“The energy crisis of 1973 taught us many things, but in my mind, the most critical is that American energy strength is a tremendous source of security, prosperity, and freedom around the world. In contrast, U.S. energy weakness hinders America and emboldens our adversaries,” Sommers said. “We know that good energy policy in America doesn’t happen with a flip of a switch… Politically, energy can—and should—be a bipartisan and unifying issue. But we must come together as a country and get the details right to chart an energy future that works.”
In his remarks, Sommers highlighted the American energy industry’s role as a stabilizing force during key moments in history, supporting our allies in WWII and again last year following Russia’s invasion of Ukraine. Sommers contrasted this with America’s weakened position during the Arab Oil Embargo and urged policymakers to heed the lessons of 1973.
“We cannot squander our strategic advantage and retreat on energy leadership… With an unstable world, war in Europe, war in the Middle East, and energy demand outstripping supply, energy security is on the line. We have seen what works – with the right signals from Washington.
“American oil and gas are needed now more than ever. We have the resources; we have the workers; we have the ingenuity. Let’s take to heart the lessons we learned from 1973 and avoid sowing the seeds of the next energy crisis. We can—and must—work together to get this done,” Sommers