Today’s Key Takeaways: Alaska welcomes mini-nuclear reactor project. Labor output, wage increases on the rise in USA oil patch. Biden bans LNG by rail. EPA goes off the rails in Alaska.
NEWS OF THE DAY:
Alaska Air Force Base Home To Mini-Nuclear Reactor Pilot Project
ZeroHedge, September 4, 2023
- The USAF issued a Notice of Intent to award a contract for micro-reactors to supply the Eielson Air Force Base with power and heat.
- Because of their small size, micro-reactors can be constructed cheaper and faster than traditional, giant, light-water reactors.
- The push for nuclear power comes as a new Pew Research Center survey shows that most Americans now want atomic power.
The Defense Logistics Agency Energy, on behalf of the US Air Force, is serious about decarbonizing a military base in Alaska. Surprisingly, the focus is on something other than solar or wind but on mini-nuclear reactors.
According to a press release from Santa Clara-based Oklo Inc., the USAF issued a Notice of Intent to Award a contract for micro-reactors to supply power and heat to Eielson Air Force Base.
“This project represents a significant stride towards ensuring a clean and resilient energy supply for critical national security infrastructure,” the company said.
The timeline for the installation wasn’t specified, and Oklo’s design still awaits the green light from the Nuclear Regulatory Commission (NRC):
This selection initiates the acquisition process to potentially award a contract to Oklo. Oklo would obtain a license for its power plant from the Nuclear Regulatory Commission, construct the power plant, and operate it to deliver both electricity and steam to the Eielson Air Force Base under a long-term power purchase agreement executed by the Defense Logistics Agency Energy. –Oklo
“We are honored to be at the forefront of increasing resilience and reducing emissions, while driving national security forward,” said Jacob DeWitte, Co-Founder and CEO of Oklo.
USAF previously announced Eielson AFB would be the preferred location to pilot next-generation energy technology, such as micro-reactors, to supply upwards of 15 megawatts of power.
Strategists Look at USA Oil Patch Labor Trends
Andreas Exarheas, Rigzone, September 5, 2023
Labor output in the U.S. oil patch has already significantly exceeded the pre-Covid January 2020 level, Macquarie strategists highlighted in a report sent to Rigzone recently.
“Despite some softening in recent months, oilfield labor output is up sharply year on year and significantly exceeds pre-Covid, January 2020 levels on a seasonally adjusted basis,” the strategists said in the report.
“Meanwhile, despite pronounced concerns around labor as a constraint on U.S. supply, newly delivered oil and gas supply in 2022 appears just short of 2018/2019 highs,” the strategists added.
According to a chart included in the report, which stretched back to 2012 and showed weekly industry production/non-supervisory work hours in oil and gas extraction and support, total weekly industry production/non-supervisory work hours reached their lowest point during 2020, coming in at around 9,000. The latest value included in the chart in 2023 is 12,803.
The strategists also noted in the report that, in the current cyclical upturn, hours worked in the oil patch has outpaced hiring.
“While we see a historical tendency towards an increase in hours worked per employee at cyclically high periods of activity, this has been persistent, signaling a tight labor market,” the strategists said in the report.
“More recently, this tightness appears to be easing, with continued increases in employment and weekly hours trending lower. Despite this apparent labor tightness in the oil patch, wage inflation does not appear as problematic as widely perceived,” they added.
Biden bans LNG shipments by rail pending safety review
Mike Lee, Greenwire, September 1, 2023
The East Palestine, Ohio, derailment prompted the administration’s action.
The Biden administration will ban shipping liquefied natural gas by rail for as long as 20 months while it evaluates the idea’s safety in the wake of the train wreck in East Palestine, Ohio.
The Pipeline and Hazardous Materials Safety Administration said the ban will go into effect Oct. 31 and last until a final rulemaking on transporting gas by rail is concluded, or until June 30, 2025, whichever is earlier.
The East Palestine wreck didn’t involve liquefied gas, but it highlighted the dangers of shipping hazardous materials by rail.
“Any risks related to the transportation of LNG by rail should be examined closely and properly mitigated to ensure safety for the public and the environment,” the agency said today in its notice of the temporary ban.
Liquefied natural gas is gas that’s been supercooled to reduce its volume and make it easier to move. It’s typically loaded onto ships so it can be transported over distances that are hard to reach by pipelines.
The Trump administration finalized a rule in 2020 that would’ve allowed LNG to be transported on rail cars, part of its agenda to promote domestic oil and gas production.
The Biden administration opted to overturn that rule, and PHMSA is working on a final rule that will either overturn the Trump administration rule or impose stricter safety regulations. The agency noted there’s been no LNG transported under the 2020 rule since it was enacted.
Republicans in Congress have argued in favor of shipping LNG by rail, saying it would help reduce energy costs for consumers.
Democrats renewed their opposition to the idea after the train wreck in East Palestine in February. Dozens of cars on a Norfolk Southern train, including several carrying hazardous chemicals, derailed, and caught fire.
No one was seriously injured, but EPA and local officials are still cleaning up the site and trying to determine the long-term impact on the environment and people’s health from the fires and the spilled chemicals.
OPINION: EPA’s Pebble action sets an unfair precedent for Alaska development
Kati Capozzi, Tessa Axelson, Karen Matthias, Deantha Skibinski, Rebecca Logan, Alicia Amberg and Leila Kimbrell, Anchorage Daily News, September 1, 2023
For more than a decade, there has been a lot written on these pages about the Pebble project and its interactions with the Environmental Protection Agency. Gov. Mike Dunleavy recently filed suit against the EPA over its actions to block the project and foreclose economic opportunity on nearly 200,000 acres of land owned by the state of Alaska. Some have questioned this litigation. It is important to outline the critical importance of this lawsuit and why so many in the business community care a great deal about it.
To begin, the issue is about process and the rules of the game for making decisions about resource development in Alaska. Businesses make decisions about investing in Alaska and our economy for a variety of reasons but among the most important is whether there is a clear and fair process for a company to follow.
In a normal process for many resource development projects, the applicant files for a permit with the U.S. Army Corps of Engineers, or USACE, under Section 404 of the Clean Water Act, aka CWA. This usually triggers a full review of the project via the environmental impact statement process. The EPA and other federal agencies participate in the EIS review and provide important technical input. If the USACE grants a permit the EPA disagrees with, the CWA grants the EPA the ability to veto the decision. These vetoes have been rarely used since the passage of the CWA as federal agencies attempt to work through significant differences.