Today’s Key Takeaways: Everything you need to know about the debt ceiling. U.S needs to double LNG exports. Rising demand calls for Alaska supply chains. Bush caucus joins Republicans to establish house majority.
NEWS OF THE DAY:
What to know about extraordinary measures as debt ceiling hits
Justin Green, Erin Doherty, Axios, January 19, 2023
The U.S. has reached its $31.4 trillion debt ceiling, the Treasury Department announced on Thursday, with no obvious deal in sight.
Why it matters: The U.S. government runs on a deficit, so the Treasury Department will start “extraordinary measures” to avoid defaulting on government bonds.
Driving the news: Yellen in a letter to Congress said that Treasury was instituting a “debt issuance suspension period” beginning Thursday and running through June 5.
- In addition, Treasury will not be able to fulfill certain investments, including to the Civil Service Retirement and Disability Fund.
- “As I stated in my January 13 letter, the period of time that extraordinary measures may last is subject to considerable uncertainty, including the challenges of forecasting the payments and receipts of the U.S. government months into the future,” Yellen stated.
- “I respectfully urge Congress to act promptly to protect the full faith and credit of the United States,” she added.
The big picture: These measures could be exhausted by early summer, Yellen warned last week.
- Congress last raised the debt ceiling in December of 2021, when Democrats held unified control of Congress.
OIL:
State senators hear oil production outlook
Amanda Bohman, Fairbanks Daily News Miner, January 19, 2023
Oil production, the basis for state revenues, is projected to be stable over the next 10 years provided new developments come online, according to officials with the Alaska Department of Natural Resources.
They presented an oil production forecast to the Senate Finance Committee on Wednesday, making the same prognostication that senators have received for years.
Older oil fields are declining, to be replaced by newer developments, whose futures depend on federal regulatory authorities and on-going litigation.
“It would be nice, obviously, to get Willow and these bigger projects rolling forward,” said Sen. Bert Stedman, R-Sitka, Senate finance co-chairman.
The state bases its forecast on oil industry operator plans, including confidential information, according to Travis Peltier, petroleum reservoir engineer for the Department of Natural Resources.
GAS:
US NEEDS TO DOUBLE LNG EXPORTS FOR CLIMATE’S SAKE: REPORT: The United States needs to increase gas production and double its exports to enable countries in Europe and Asia to displace combustion of coal, a new report from the Progressive Policy Institute argues.
Coal use increased globally last year because of the high prices and tighter supplies for natural gas, posing challenges to national decarbonization targets. China, India, and Indonesia, the three largest coal producers, all achieved record coal production last year.
Rapid growth in U.S. liquefied natural gas exports would be able to facilitate a reversal of these trends, according to Paul Bledsoe, a former Clinton White House climate aide and author of the PPI report.
“We should be increasing U.S. LNG on straight climate grounds, even if you ignore the huge security and economic benefits,” Bledsoe told Jeremy, stressing that such growth in exports has to be accompanied by further reductions in methane emissions to avoid undercutting the value of fuel switching.
The Biden administration is keenly focused on increasing exports to Europe in particular and has approved additional export volumes at existing terminals and those in the construction queue. Between existing terminals and new ones expected to be fully up and running by 2025, exporters would be able to provide about half the LNG needed to meet the doubling goal, according to Bledsoe.
Contra more exports: Biden has committed to facilitating more exports, although doing so entails a need for more gas infrastructure, and the administration is under immense pressure from environmental groups not to sign off on that.
Some in industry, alongside green groups, and some Democrats, have also implored the Energy Department to depress exports to keep gas in domestic markets for U.S. consumers’ sake.
From the Washington Examiner, Daily on Energy
MINING:
End of the road for critical minerals
Shane Lasley, North of 60 Mining News, January 19, 2023
Rising demand calls for pioneering North of 60 supply chains.
Has the discovery and development of the mines essential to meeting the massive demand for battery metals, copper, rare earths, and other critical minerals reached the end of the road? Not a metaphorical end where the visions of electric vehicles charged with sunshine are dashed – halting the demand for green energy and technology metals. Instead, I am speaking to pioneering critical mineral supply chains beyond the literal end of the limited highways extending into Alaska and Canada’s North.
Whether you refer to the critical mineral lists published by the U.S., Canada, European Union, or Japan, the North of 60 Mining News area is incredibly enriched in the minerals and metals the world wants and needs. In fact, it is exceedingly easier to list the Critical Minerals Alaska, Northern BC, Yukon, Northwest Territories, and Nunavut are not prospective for than for those they are.
Aluminum – that’s the only critical metal that has not been found in economically intriguing quantities Alaska and Canada’s North.
Otherwise, this enormous, remote, and vastly underexplored northern frontier is a trove of virtually every other critical, strategic, technological, industrial, base, and precious metal on the periodic table of elements.
From zinc and germanium recovered at the Red Dog Mine in Alaska, to copper from the Red Chris Mine in British Columbia’s Golden Triangle and rare earth elements being shipped from the Nechalacho Mine in Northwest Territories, North of 60 mining jurisdictions are already feeding critical minerals and metals into North America’s supply chains.
And at a time where BMW, Ford, General Motors, Stellantis, Volkswagen, Tesla, and Twitter executives are cutting deals directly with mining and mineral exploration companies to secure future supplies of the materials needed to build the e-mobility future, it is hard to ignore the rich abundance of critical minerals found in North America’s northmost reaches.
For Alaska, Northern BC, Yukon, Northwest Territories, and Nunavut, the transition to more mineral intensive clean transportation, energy, and digital technologies provides a once-in-a-century opportunity to develop a new economic foundation based on future-leaning minerals and metals – advancing the front end of supply chains deeper into the North during the process.
From the early stages of modern exploration at the Nagvaak cobalt-copper-gold-molybdenum-platinum group metals-silver-vanadium-zinc project in Nunavut to advancing toward development of a mine at the world-class Graphite Creek deposit in western Alaska and building a road toward the Nico cobalt-bismuth-copper-gold mine project in Northwest Territories, a figurative and literal critical minerals trail was blazed into the North of 60 Mining area during 2022 and further inroads into realizing the critical minerals potential of this vast and underexplored region is expected to gain momentum in 2023.
Tilton elected Alaska speaker of the House as rural legislators join Republicans in new coalition
James Brooks, Alaska Beacon, January 19, 2023
The Bush Caucus, which includes two Democrats and two independents, is key to the new majority.
The Alaska House of Representatives elected Rep. Cathy Tilton, R-Wasilla, as speaker of the House, putting a predominantly Republican coalition in charge of the body.
The new majority flips control of the House from the predominantly Democratic coalition that has controlled it since 2017 and means that conservative priorities stalled for the past six years will have better odds of becoming law.
House lawmakers had been deadlocked, but the four-member Bush Caucus, a group of two independents and two Democrats who represent rural Alaska, agreed to back the House’s 19-member Republican caucus, creating the coalition that will now be in charge of the House.
“This is a very overwhelmingly happy day,” said Rep. George Rauscher, R-Sutton.
Tilton, speaking after she was selected in a 26-14 vote, said the majority’s top priority is a state fiscal plan.
“I think that we can all agree that a priority of this session is to deal with the fiscal stability of the state of Alaska. That is probably the No. 1 issue that we’ll be working on,” she said.
Before Wednesday’s vote, members of the new majority had introduced legislation on a variety of topics, including limits on school sports for transgender students and the elimination of the state’s new ranked choice voting system, to name just two controversial issues.
The state Senate is led by a coalition in which nine of the 17 members are Democrats and has pledged to table controversial legislation. But the new House majority could ensure those issues receive a hearing. For the past six years, they’ve been denied that in the House.
The names of committee chairs, who will dictate the flow of legislation, were not announced Wednesday, and will be decided Thursday morning, lawmakers said.
Wednesday’s vote came on the second day of the 33rd Alaska State Legislature. It was the third consecutive time the House was unable to agree on a speaker before (or on) the first day of the first legislative session of a two-year legislature.
In 2019, legislators needed 31 days to choose a leader. Two years ago, they needed 22 days.
Wednesday’s agreement was comparatively quick and came after overnight discussions, multiple lawmakers said.
Rep. Dan Ortiz, I-Ketchikan, said he learned about 20 minutes before Wednesday’s floor session that Tilton had enough votes. He voted for her.
The size of the new majority won’t be clear until later this week at the earliest. Wednesday’s vote to name her speaker didn’t indicate who would be in the majority, Tilton said.