Today’s Key Takeaways: – EU ready to go with Russian oil price cap. U.S. says cap will benefit China and India. Mozambique, one of the world’s poorest nations, begins to reap benefit of LNG. Valhalla Metals prepares for busy 2023 exploration program – looks for Ambler Road progress. Manchin responds to Biden’s anti-coal comments – denying FERC chair a hearing and a seat on the panel.
NEWS OF THE DAY:
VDL Says EU Ready to Go With Russian Oil Price Cap
Kevin Whitelaw, Annmarie Hordern, Bloomberg/Rigzone, November 14, 2022
The European Union is “ready to go” with an effort to impose a price cap on Russian oil, Ursula von der Leyen, the president of its executive arm, said Monday.
“We have set all the tools necessary in place in the European Union,” von der Leyen told Bloomberg Television in an interview in Bali on the sidelines of the Group of 20 summit. “It is important not only to dry out the war chest of Russia but also very important for many vulnerable countries to have an acceptable level of prices.”
She added that the price level hasn’t been decided yet.
The EU has imposed sanctions on seaborne imports of Russian oil that will kick in on Dec. 5. On the same day, the EU and UK are set to prohibit their companies from providing shipping, financing and insurance for tankers carrying Russian oil unless the shipments are priced below a cap. The cap level will be set by a coalition that includes Group of Seven governments and the EU.
U.S. Treasury Secretary: A Russian Oil Price Cap Will Benefit China And India
Irina Slav, OilPrice.Com, November 14, 2022
The U.S.-led initiative seeking to set a ceiling on the price of Russian oil sold on international markets will benefit China, U.S. Treasury Secretary Janet Yellen told media today on the sidelines of the G20 summit.
“We see the price cap is something that benefits China benefits India, and benefits all purchasers of Russian oil,” Yellen said, as quoted by Reuters.
In her statement, the U.S. Treasury Secretary also said that China’s current buying of Russian crude was “completely consistent” with the West’s plans to keep Russian crude flowing into international markets.
Yet China, like India, has refused to join the price cap effort despite attempts by the U.S., and specifically Yellen, to get them on board with the argument that a price cap would make their imported Russian oil more affordable. Russia has said it would not sell oil to countries supporting the cap.
A few days before her statement on China, Yellen said she hoped India would take advantage of the price cap, again noting that it would make Russian oil cheaper for importers.
In a separate statement from earlier today, the U.S. Treasury Secretary said the U.S. had no problem with India not taking advantage of the cap but noted that this would mean Indian buyers of Russian crude would have to forego using Western insurance, financing, and shipping services, as those would be tied in the cap scheme.
Most analysts have pointed out China and India as crucial for the success of the price cap scheme because they are the biggest buyers of Russian oil. At the same time, the countries that devised the cap scheme – the G7 – all have already active or pending bans on Russian oil, meaning they will not be importing any Russian crude in a couple of months anyway, so the cap makes zero sense for them.
Coral Sul offloads first LNG parcel offshore Mozambique
Offshore, November 14, 2022
bp has loaded the first cargo of LNG from the Coral Sul FLNG vessel in deepwater Area 4 offshore Mozambique.
Under a 20-year offtake contract signed in 2016, bp will purchase 100% of LNG output from the vessel, which is designed to produce up to of 3.4 MM metric tons per year of LNG.
The sellers are the Mozambique Rovuma Venture (Eni, Exxon Mobil and CNPC), and GALP, KOGAS and Mozambique state energy company ENH.
Eni CEO Claudio Descalzi said, “We will continue to work with our partners to ensure timely valorization of Mozambique’s vast gas resources.”
The Coral South project came onstream five years after sanction in 2017, Eni said, in line with the initial budget and schedule, despite disruption caused by COVID-19.
The Coral reservoir holds an estimated 450 Bcm of gas.
Critical road to Valhalla’s Sun and beyond
Shane Lasley, November 11, 2022
As Alaska-based company preps for 2023, Alaska Delegation calls for swift Ambler Road resolution.
After spending this summer preparing for its initial drill program at the Sun copper-zinc-silver-gold project in Northwest Alaska, Valhalla Metals Inc. commends the Alaska Delegation’s support for the proposed Ambler Road that would run right by this potential domestic source of green energy metals that lies along the route to the Arctic Mine project to the west.
According to a 2018 calculation, the Sun deposit hosts 1.71 million metric tons of indicated resource averaging 4.32% (163 million pounds) zinc, 1.48% (55.8 million lb) copper, 1.11% (42 million lb) lead, 60 grams per metric ton (3.3 million oz) silver, and 0.21 g/t (12,000 oz) gold; plus 9.02 million metric tons of inferred resource averaging 4.18% (831.3 million lb) zinc, 1.21% (239.6 million lb) copper, 1.46% (290.3 million lb) lead, 81.7 g/t (22.7 million oz) silver, and 0.25 g/t (73,000 oz) gold.
Previously completed geophysical surveys and exploration indicates that this already large deposit continues to dip to the southeast.
A new Alaska-focused mineral exploration company, Valhalla closed a C$10.2 million financing earlier this year that provides the funds needed to explore the resource expansion potential at Sun.
A 2022 work program that was completed in September consisted of fixing snow-damaged tents at the 24-man Sun camp, clearing areas for new tents, and completing an inventory of work required to make the camp fully operational for the 2023 exploration program.
The full camp re-build and expansion is planned to be completed by June in anticipation of supporting a 5,000-meter drill program designed to confirm and expand on known VMS copper-zinc-lead-gold-silver resources at the Sun and SW Sun zones, as well as test several other newly identified high-quality targets.
“We are very pleased with the progress made at the Sun Project camp this fall and are looking forward to finish the camp re-build and get exploration underway,” said Valhalla Metals Chairman Rick Van Nieuwenhuyse.
Alaska Delegation road support
Valhalla also welcomes bipartisan support from Alaska’s Washington delegation for the proposed 211-mile road that would connect the Ambler District to Alaska’s highway system.
The need for access to the Ambler District has been recognized by U.S. policymakers for more than 40 years. This is why Congress included special provisions in the 1980 Alaska National Interest Lands Conservation Act (ANILCA) meant to guarantee a transportation corridor to this metals-rich region of Northwest Alaska would be approved.
Section 201 (4) of ANILCA reads, “Congress finds that there is a need for access for surface transportation purposes across the Western (Kobuk River) unit of the Gates of the Arctic National Preserve (from the Ambler Mining District to the Alaska Pipeline Haul Road) and the Secretary shall permit such access in accordance with the provisions of this subsection.”
Despite this Congress-mandated guarantee of expedited access, the U.S. Bureau of Land Management earlier this year suspended a previously issued 50-year right-of-way that covers 25 miles of the proposed 211-mile road connecting the Ambler District to Alaska’s highway system.
In a joint letter to Secretary of Interior Deb Haaland, Sens. Lisa Murkowski and Dan Sullivan said the remand of permits to build the road jeopardizes U.S. economic and national security by prolonging the nation’s reliance on foreign adversaries for metals found in the Ambler District.
“In Alaska alone, the Project has the potential to facilitate over 8,700 direct, indirect, and induced construction and operation jobs and nearly $700 million in annual wages,” they penned in the Sept. 15 letter. “That would be top of an annual average of 360 direct jobs over the road’s construction period, and up to 81 direct annual jobs for road operations and maintenance over the life of the road.”
Congresswoman Mary Peltola, who was elected to replace the late Don Young in a special election and was reaffirmed as Alaska’s at large representative in the House, says the road is the only missing link to a project that has broad support, including among Alaska Native organizations.
“The mineral resources in the area, including copper, are of critical importance to the country,” she inked in a Sept. 29 letter in support of the Ambler Road. “The minerals are there; the state and private interests in exploring and developing those resources are in place; the support of Alaska Native corporation and tribes is strong. What is missing is access, which the Project would provide.”
Manchin FERC shake-up may stymie Biden’s clean energy plans
Miranda Wilson, Nico Portuondo, E & E News, November 11, 2022
The prospect of Federal Energy Regulatory Commission Chair Richard Glick losing his job by year’s end could derail policies critical for President Joe Biden’s clean energy and climate agenda.
Senate Energy and Natural Resources Chair Joe Manchin is “not comfortable” holding a hearing for Glick, Manchin spokesperson Sam Runyon said Thursday, effectively killing the chairman’s chances of staying on the regulatory panel (Greenwire, Nov. 10).
Glick, a Democrat who joined FERC in 2017, had been nominated by Biden to lead the agency for another four years, pending approval by the Senate. His departure would mean that Democrats lose their majority on the five-person commission.
Glick has advanced a slew of regulatory changes seen as key for adding more solar, wind and batteries to the nation’s power grid. But his efforts to establish a more climate-focused process for reviewing natural gas pipeline projects had been criticized by Republicans and Manchin, a moderate Democrat from natural gas-rich West Virginia.
“It’s disappointing,” said Gregory Wetstone, CEO of the American Council on Renewable Energy. “Certainly, our hope is that Chairman Manchin will reconsider.”
While Glick’s term at FERC expired in June, he is allowed by law to stay at the helm of the commission through the end of this year. In an interview, he said he had spoken to Manchin’s team Wednesday evening and was told “nothing different” from what has been reported already.
“We’ll see what happens,” Glick said. “I worry about the things I can control. The things I can’t control, I don’t worry about.”
FERC’s authority extends across much of the energy sector. The commission oversees the reliable operation of the bulk power system, permits large natural gas pipelines, and monitors and investigates energy markets, among other roles.
Glick’s departure would leave FERC with two Democratic and two Republican commissioners. Although many of FERC’s decisions have bipartisan support, the dynamic could make it harder for the commissioners to advance certain policies and orders affecting transmission, clean energy, pipelines, and energy markets.