Today’s Key Takeaways: Westinghouse: micro nuclear reactors can provide stable power for remote locations in AK. Norway considers buying Chinese oilfields. Turkey & Russia join forces to establish Turkey as gas hub for Europe. London Bullion Market Association barrs Russian firm from annual conference. White House touts’ oil & gas leasing revamp as evidence it supports domestic production.
NEWS OF THE DAY:
Company touts benefits of micro nuclear reactors for rural Alaska
Lauren Maxwell, KTUU, October 14, 2022
Alaskans looking for clean, safe energy sources should consider nuclear power, according to a company that is working on developing a micro nuclear reactor it says will be particularly suited for rural Alaska.
Westinghouse Electric President Eddie Saab made a presentation Friday in front of Word Trade Center Anchorage, a private non-profit that focuses on trade and business opportunities.
Saab told the crowd that the micro-reactor they’re developing, the eVinci, is small enough to be loaded on a truck or placed on a barge. Perfect, Saab says, to provide stable power for remote locations.
“For those areas that are running on transported diesel or just don’t have strong grid connections, it provides an economical and unique solution, to be able to have the power to provide the electricity they need, without having to give out any carbon emissions,” Saab said.
The company is still working on developing micro-reactors, which have yet to be approved by federal regulators. Saab said they are beginning the licensing phase with the U.S. Nuclear Regulatory Commission. If all goes well, he said, the reactors could be available commercially towards the end of 2027.
Saab emphasized safety features. He said the micro-reactors use no water for cooling or operations and are completely self-contained. Life expectancy is about 8 years before the unit is completely replaced by the company.
“In terms of the waste, it is our responsibility to take back the waste, recycle it and properly store it,” Saab said.
Some environmental groups have concerns about any type of nuclear reactors.
“They’re really a false solution to the energy and climate crisis,” Pam Miller of Alaska Community Action on Toxics said.
“I think there are low carbon and renewable energy sources which should be given precedence over nuclear reactors, which have a variety of safety and health problems that have not been resolved.”
Gov. Mike Dunleavy is in favor of developing the micro-reactor technology. He sponsored SB 177 that would remove some of the hurdles at the state level to positioning the reactors in the state.
“Micro nuclear technology has a potential role to play in creating low cost, reliable power for communities, remote villages, and resource development projects,” Gov. Dunleavy was quoted in a press release.
Dunleavy noted that the technology isn’t likely to be available for several years.
Norway’s Equinor Considers Buying Chinese North Sea Oilfields
Alex Kimani, OilPrice.Com, October 17, 2022
Reuters reported on Monday that Norway’s Equinor ASA (NYSE: EQNR)is considering buying oilfields in the British North Sea from China’s CNOOC Ltd (OTCPK: CEOHF), including a significant stake in the huge Buzzard oilfield in a deal valued at between 20 billion and 30 billion Norwegian crowns ($1.9 billion-$2.8 billion).
The deal would rank among the largest in years on the U.K. continental shelf.
According to the Norwegian newspaper DN, the deal might be finalized as early as the end of the current year.
The assets were originally obtained in 2013 from Canadian oil producer Nexen. Equinor’s assets also come with so-called tax losses, meaning the owner of the fields can offset past losses against future tax bills
“As a matter of principle, we never comment on rumors and speculation,” an Equinor spokesperson told Reuters when quizzed about the deal. CNOOC has also declined to comment.
In March, Reuters, citing four sources, reported CNOOC had hired Bank of America to start preparing a formal sale of its North Sea assets, potentially raising more than $3 billion.
Back in the United States, dealmaking is slowly starting to recover, with Enverus noting that mergers and acquisitions picked up pace to $16 billion in Q3, the most this year.
In its quarterly report, Enverus notes that the 3rd quarter was the most active quarter in oil and gas so far this year. Still, deal value in the first nine months only totaled $36 billion, significantly less than the $56 billion recorded in the same period last year.
“Companies are using the cash generated by high commodity prices to pay down debt and reward shareholders rather than seeking out acquisitions. Investors still seem skeptical of public company M&A and are holding management to high standards on deals. Investors want acquisitions priced favorably relative to a buyer’s stock on key return metrics like free cash flow yield to give an immediate uplift to dividends and share buybacks,” Andrew Dittmar, director of Enverus, told Reuters.
‘No waiting’: Turkey, Russia to act on Putin’s gas hub offer
Associated Press, October 17, 2022
Russian President Vladimir Putin has floated the idea of exporting more gas through the TurkStream gas pipeline running beneath the Black Sea to Turkey.
Turkish President Recep Tayyip Erdogan said Friday that Turkey and Russia have instructed their respective energy authorities to immediately begin technical work on a Russian proposal that would turn Turkey into a gas hub for Europe.
Russian President Vladimir Putin has floated the idea of exporting more gas through the TurkStream gas pipeline running beneath the Black Sea to Turkey after gas deliveries to Germany through the Baltic Sea’s Nord Stream pipeline were halted.
Erdogan said Russian and Turkish energy authorities would work together to designate the best location for a gas distribution center, adding that Turkey’s Thrace region, bordering Greece and Bulgaria, appeared to be the best spot.
“Together with Mr. Putin, we have instructed our Ministry of Energy and Natural Resources and the relevant institution on the Russian side to work together,” Erdogan was quoted as saying. “They will conduct this study. Wherever the most appropriate place is, we will hopefully establish this distribution center there.”
“There will be no waiting,” Erdogan said in his first statement on the Russian proposal.
The Turkish leader made the comments Thursday on his return from a regional summit in Kazakhstan, where he met with Putin. His words were reported by Hurriyet newspaper and other media.
Turkish Foreign Minister Mevlut Cavusoglu said Putin proposed shipping gas to European countries that want it via Turkey because he no longer considers Nord Stream 1 and 2 to be “reliable” conduits.
The minister said, however, that the Russian proposal needs “to be studied well.”
“There are investments that need to be made, they need to be examined,” he said during a joint news conference with his Qatari counterpart. “This is a matter of supply and demand. How much of Europe … is ready to buy gas from such a project? This needs to be worked out together.”
Cavusoglu added that Turkey wanted to alleviate Europe’s energy crisis.
“The weakening of Europe in all aspects is not in Turkey’s interest. On the contrary, it is against [Turkey’s interests],” Cavusoglu said.
Turkey has long aspired to become an energy hub.
Energy analysts have, however, questioned the likelihood of the proposal to ship gas to Europe via Turkey getting off the ground, with European leaders criticizing Russia’s reliability as an energy supplier and calling Russia’s cuts in natural gas a political bid to divide them over their support for Ukraine.
Germany last week rejected another proposal by Putin to step up gas flows to Europe via a link of the Nord Stream 2 pipeline under the Baltic Sea — a pipeline that has never been operational. Moscow cut off the parallel Nord Stream 1 gas pipeline over what it claimed were technical problems.
Asked to comment on an assertion by Putin that Russia had foiled an attack on the TurkStream gas pipeline, Erdogan said Turkey was taking every step necessary to secure the pipeline.
NATO-member Turkey, which depends on Russian for its energy needs and tourism, has criticized Moscow’s actions in Ukraine but has not joined U.S. and European sanctions against Russia.
It has maintained its close ties with both Moscow and Kyiv and positioned itself as a mediator between the two. Ankara recently helped broker key deals that allowed Ukraine to resume grain exports and led to a prisoner swap between Ukraine and Russia.
Russian mining giant told it’s not welcome at gold industry bash
Bloomberg News, Mining.Com, October 17, 2022
The London Bullion Market Association has barred MMC Norilsk Nickel PJSC from its annual precious metals conference due to Russia’s invasion of Ukraine.
The Russian firm, which is the world’s top palladium miner, was asked not to attend the event in Lisbon this year, a spokesperson for the LBMA confirmed. Norilsk Nickel isn’t currently sanctioned by the US or Europe, but stigma against Russian companies has gone beyond entities targeted by official measures.
“With regret the LBMA felt it inappropriate to accept Norilsk Nickel’s registration due to the international situation,” the LBMA spokesperson said.
The association’s annual conference is viewed as the highlight of the precious metal industry’s calendar, and a crucial opportunity for firms to meet clients. Traders, refiners, and miners are currently gathering in Portugal’s capital for three days of events, seminars, and dinners
While Russian gold has largely been cut out of the mainstream supply chain, the treatment of industrial metals like palladium has been mixed. Some European firms, including Norsk Hydro ASA and Novelis Inc., have avoided signing new contracts for aluminum from the country. And the London Metal Exchange is discussing whether to ban new deliveries of Russian metals to its warehouses.
Norilsk Nickel produces around 40% of the world’s palladium, which is largely used in catalytic converters. Its major shareholder is Russian billionaire Vladimir Potanin. Other major producing nations include South Africa and the US.
Norilsk Nickel declined to comment.
BERNSTEIN TOUTS OIL AND GAS LEASE SALES: The White House is using new oil and gas leasing mandates in Democrats’ Inflation Reduction Act to shield President Joe Biden and the party from accusations that their energy policy is crippling domestic production of fossil fuels.
White House Council of Economic Advisers member Jared Bernstein, in an interview on yesterday’s “Fox News Sunday,” offered a recent quote from environmental NGO Sierra Club regretting the inclusion of language in the law that directs more leasing for oil and gas in order to demonstrate how the administration is supporting more domestic production.
“‘For all of its good, the new climate legislation also mandates oil and gas drilling on public lands,’” Bernstein said, reading the quote to host Shannon Bream. “So, that’s the Sierra Club complaining about aspects of the Inflation Reduction Act that open up new lands for leasing.”
Bernstein emphasized the nearly $370 billion in tax credits, grants, and other incentives to serve a “hastening” of the transition to green energy but disputed the notion that the administration isn’t doing things to facilitate more production at home: “This is a walk and chew gum moment — I don’t think anyone can, based on the facts, accuse this administration of not fulfilling both of those obligations right now,” he said.
Breaking it down: The IRA’s oil and gas language made the cut at the behest of Joe Manchin, the Senate Energy and Natural Resources chairman and holdout vote who pledged not to vote for something he saw as too aggressive against fossil fuels.
Biden, who as a candidate promised restrictions to oil and gas leasing, ordered a pause on new leasing when he entered the White House and sought major reforms to the leasing programs.
He’s achieved that to a degree with higher royalty rates and rents and new methane regulations — all of which were passed into law in the Inflation Reduction Act. At the same time, the signature legislative achievement of this Congress has, in the words of the Interior Department, removed the administration’s discretion over a number of lease sales.
Manchin’s deal with Majority Leader Chuck Schumer ultimately won support of every sitting Democrat in Congress, even the most hawkish on climate change – who had to hold their noses to vote for a bill with language ordering specific lease sales to be held.
The law resurrected three canceled offshore lease sales that Biden’s Interior Department canceled in May, and it reinstated Lease Sale 257, the lone offshore lease sale to be held since Biden took office. (Remember: Judge Rudolph Contreras vacated 257 and remanded it to the agency. That decision was appealed and has been tied up in court ever since and remains so.)
The IRA also tied the development of renewable energy on federal lands and in federal waters to the continuance of oil and gas leasing. Together, the provisions revamped the leasing programs, which have been beset by litigation, irregular sales, and missed deadlines.
More on the politics: Now, three weeks out from the midterm election when gas prices remain elevated and Democrats’ are defending the slimmest of majorities, the White House is marketing the leasing revamp to show it supports more domestic production.
For most of the year, high energy prices, especially for retail gasoline, have plagued Biden. Republican lawmakers have attacked his energy policy for favoring restrictions on leasing and the oil and gas industry more broadly at a time when oil and gas are expensive.
Many green groups, alternatively, have criticized the administration for not being aggressively green enough by doing things like approving more exports of liquefied natural gas, for leasing new federal acreage, and for considering a plan to make more acreage available for leasing over the next five years.
From the Washington Examiner, Daily on Energy