Mining eyes on Greenland election. LNG legislation to increase exports

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Alaska Won’t Let Biden Stop Its Oil Boom
Felicity Bradstock, OilPrice.Com, April 3, 2021

New discoveries in Alaska by an Australian independent could provide hope for bigger oil finds yet to come in the country’s National Petroleum Reserve. Australian independent oil firm 88 Energy has been making strides in its Alaska project in recent weeks announcing an oil discovery in its Merlin-1 exploration well in the southeast National Petroleum Reserve-Alaska. Further testing will show the full extent of the discovery. 

88 Energy is predicting a potential 650 million barrels of oil at Merlin-1 based on its current information. This would mean the oil-bearing geologic formation, Nanushuk, is much larger than originally thought. 

Alaska Peregrine Development Company, or “APDC” has been largely funding 88 Energy operations, providing the first $10 million for the drilling project. Initial drilling reached 1,512 feet, or 460 meters with a prospective oil target at 6,000 feet, or 1,829m.

The Australian firm also announced a share subscription agreement with ELKO International LLC this month, issuing 360 million shares at a share price of 1.8 cents, meaning an input of $6.48 million (US4.92m) into the project. 

ConocoPhillips is already planning the development of its ‘Willow’ discovery in the north of the Merlin well, which could hold an anticipated 750 million barrels. And New-Guinea producer, Oil Search, is developing ‘Pikka’, to the east of the well. Production is expected from both discoveries by 2026.

Related: Oil Rallies As OPEC+ Signals Confidence In Demand Recovery

These discoveries are all based in the Nanushuk formation in Alaska’s National Petroleum Reserve. But Alaskan oil expands well beyond this. In December 2020, Shell Offshore Inc.’s application to form the West Harrison Bay unit in the shallow state waters of the Beaufort Sea was approved. 

Shell’s plan of exploration in the 81,000-acre unit was filed last June, aiming to drill two wells over the next five years. The area encompasses both the Nanushuk and Torok formations. 

Elsewhere in Alaska, its North Slope, which could hold tens of billions of barrels of heavy oil, is being explored. A study, costing $9.6 million, by Hillcorp Alaska and the University of Alaska Fairbanks is testing the potential of injecting a synthetic polymer to help recover the heavy oils. 

However, Biden’s suspension of new leases on federal lands and in federal waters threatens new discoveries in the Alaskan region. Even if existing exploration projects prove successful, Biden’s suspension and aims to speed up climate change policies could mean a huge proportion of Alaskan oil remains untouched.

Alaska was one of 13 states to call for an end to Biden’s pause on new oil leases through a lawsuit this month. The state relies heavily on oil production for employment and its economy as a whole. Alaska has enjoyed $180 billion in oil revenue since its statehood, with one-quarter, or 77,600, of Alaskans employed in the sector. 

Alaska Gov. Mike Dunleavy’s issued a statement stating, “We fear that President Biden’s attack on federal oil and gas leasing has only begun, and the State must be involved to protect the interests of all Alaskans in the responsible development of the bountiful natural resources contained within Alaska,” said Dunleavy, in the statement”.

With significant new finds in Alaskan waters and pressure on the government to balance environmental policies with the future of U.S. oil and gas, the state could prove hopeful for the substantial extraction projects of both light and heavy oil over the next decade.  


Oilfield services sector added 23,000 jobs in March: industry report
Liz Hampton, Reuters, April 5, 2021

The U.S. oilfield services and equipment sector added an estimated 23,000 jobs in March, marking a 3.8% increase, according to preliminary data from the Bureau of Labor Statistics and an analysis by the Energy Workforce & Technology Council, a trade group.

Jobs in the sector are still down 9.2% from March 2020, according to the council.

The oilfield services and equipment industry was hard hit by the coronavirus pandemic as lockdowns crushed fuel demand, prompting oil producers to slash spending and reduce activity.

Some 102,000 oilfield jobs were lost as a result of the pandemic, according to estimates by the Council. Roughly 57,000 jobs were lost in April 2020, the largest one-month total since 2013.


U.S. senators push bill to boost LNG export
Sanja Pekic, Offshore Energy, April 6, 2021

Louisiana and Texas senators John Kennedy and Ted Cruz joined Jim Inhofe (Oklahoma), Shelley Moore Capito (West Virginia) and Kevin Cramer (North Dakota) in introducing the Natural Gas Export Expansion Act.

This bill is to remove regulatory hold-ups that discourage the LNG trade and increase LNG exports to more than 160 countries in the World Trade Organization.

American LNG exports reached record highs in November and December 2020. LNG was exported to a record 38 countries.

Methane emissions from U.S. natural gas production have decreased nearly 25 per cent since 1990, while natural gas production grew more than 70 percent.

The goal of the bill is to speed up the review process behind certain permits for export to non-Free Trade Agreement (FTA) countries.

The review process for an application to export LNG to non-FTA countries can take years. It is reported that the previous administration greatly reduced the processing time for non-FTA permits, but Congress must help ensure that the review process is not lengthened.

The Natural Gas Export Expansion Act is to:

  • Amend the Natural Gas Act to expedite non-FTA export permits.
  • Retain current law for restricted nations.

“LNG exports sustain Louisiana jobs, promote America’s energy independence and reduce global emissions. We should make it easier, not harder, to export American LNG to countries that need it. Louisiana is the nation’s number one exporter of liquefied natural gas, but we’re taking a beating at the hands of our own president. The Natural Gas Export Expansion Act would combat President Biden’s war on energy jobs by reducing unnecessary restrictions on LNG export permits,” said Kennedy.

“Thanks to the United States’ development and use of natural gas, America leads the world in reducing carbon emissions. While many choose to protest and ignore the critical role of natural gas in our energy future, Congress must do its part to continue advancing America’s energy renaissance. Increasing LNG exports will not only continue to lower energy costs for consumers and increase America’s energy security—while at the same time reducing emissions and improving air quality in the United States—but will also strengthen our international relationships around the globe and help bring these same climate benefits to the world,” said Cruz.


Greenland election closely watched by global mining industry
Mining.Com, April 6, 2021

Greenlanders began voting in a parliamentary election on Tuesday that could unseat the ruling political party and help decide the fate of vast deposits of rare earth metals which international companies want to exploit.

The Arctic island of 56,000 people, which former U.S. President Donald Trump offered to buy in 2019 only to be told it was not for sale, is part of the Kingdom of Denmark but has broad autonomy.

International companies are watching the election closely as they compete for the right to develop Greenland’s untapped deposits of rare earth metals including neodymium, which is used in wind turbines, electric vehicles, and combat aircraft.

Global warming and melting ice have made Greenland more attractive for investment as access by sea has become easier –Trump’s offer for Greenland was intended to help address Chinese dominance of rare earth supplies.

But concern in Greenland is mounting about the potential environmental impact of plans to build a large mining complex at Kvanefjeld in the south of the island, a site that contains uranium as well as neodymium.

A junior party withdrew from the coalition government in February as opposition to the project mounted, prompting the decision to call Tuesday’s snap election to the 31-seat parliament.

Mining potential

Opinion polls before the election showed the social democrat Siumut Party, which has led all governments since 1979 except for one period between 2009-2013, trailing the main opposition party, Inuit Ataqatigiit (IA).

Support from Siumut helped secure preliminary approval for the Kvanefjeld project, which is licensed to Australian Greenland Minerals, in which Chinese Shenghe Resources is the biggest shareholder.

If IA can form a coalition to govern, it could raise questions about the project. IA has a zero-tolerance policy for uranium and has criticized the project.

Polling stations close at 8 pm (2200 GMT) and deputies will be elected for four years. In the last election in 2018, final results were published about eight hours after polls closed.

Apart from mining, election campaign issues have included housing, the fishing industry and efforts to gain more autonomy.

Greenland’s mining potential is widely seen as vital to its prospects of achieving more economic independence, as its $3 billion economy and large public sector are heavily reliant on grants from Denmark.

A majority of Greenlanders view independence from Denmark as a long-term goal but say economic development is needed first.


Kyrsten Sinema Defends Filibuster as Pressure Mounts From Progressives
Eliza Collins, The Wall Street Journal, April 6, 2021

Arizona Democrat says the problem is senators’ behavior, not the chamber’s rules.

Sen. Kyrsten Sinema has emerged as the staunchest Democratic defender of the filibuster, brushing off fire from the outspoken progressive wing of her party as she tries to stake out a bipartisan reputation in a battleground state.

The Arizona lawmaker is one of just two Democratic senators who have publicly said they would block the party from eliminating the 60-vote requirement to advance most legislation, even as pressure builds from party activists eager to advance their agenda.

House Democrats have passed bills on voting rightsimmigration and gun control, but all are expected to be blocked in the 50-50 Senate unless the rules are changed. Ms. Sinema said that is a problem with the senators, not the rules.

“When you have a place that’s broken and not working, and many would say that’s the Senate today, I don’t think the solution is to erode the rules,” she said in an interview after two constituent events in Phoenix. “I think the solution is for senators to change their behavior and begin to work together, which is what the country wants us to do.”


In uneven economic recovery, climate action risks leaving some behind
Amy Harder, Axios, April 5, 2021

A year ago, almost all of us were grappling with the unknowns of the pandemic. Today, some of us are doing just fine, while others are still reeling.

Why it matters: This split-screen economy, called a K-shaped recovery, highlights the risk facing politicians, including President Biden, as they rally around bold climate action. If new climate laws aren’t inclusive of those less well off in America and around the world, they risk exacerbating inequality.

The big picture: In a K-shaped recovery, the arm of the K represents higher-income people who can work from home and shield themselves from the pandemic’s health and economic harm relatively easily. In fact, the wealth of those on the K’s arm has been growing over the past year as the stock market grew.

  • The leg of the K is comprised of blue-collar workers, small business owners and the half of the U.S. population that isn’t invested in the stock market.

“Any change in the world is going to be harder on the people who are already exposed and vulnerable. So the trick is to make sure they benefit, if not equitably, at least proportional to the benefits of the energy transition.”

— Carlos Martín, senior fellow at The Urban Institute

Where it stands: Climate change is an especially dire threat to people on the K’s legs.

Society’s efforts to transition to clean energy and the impacts of a warming world both disproportionately affect poorer people in America and abroad.

  • Lower-income people spend a larger amount of their paychecks on heating, electricity, and transportation. This is especially so in Black and Hispanic communities, where poverty rates are higher.
  • Lower-income people are also less financially able to respond to or move away from places that climate change is making hotter, drier or more at risk of extreme weather.

How it works: To tackle climate change, you must either make clean energy cheaper or fossil fuels more expensive — or both.

  • Oil, natural gas, and coal have been powering our economy for decades and make up 80% of our global energy consumption (a figure that’s barely budged in 30 years).
  • They’re plentiful and made cheap by government subsidies here and abroad. They’re also the main reason our planet is heating up.
  • Therefore, any action we take to tackle climate change is, by default, going to raise energy costs — which means those who are least able to afford it will shoulder the brunt of those costs unless policymakers work to reduce the impact.
  • For the past few decades, the U.S. government has primarily tackled climate change by subsidizing cleaner energy, which absorbs and eventually lowers technology costs while shielding consumers.

The intrigue: The Biden administration is leading with that in its $2 trillion infrastructure push on Capitol Hill, with a large chunk of spending going toward climate and clean energy. Such an approach could shield consumers from higher costs.

  • Several subsidy policies Congress is considering, forms of which are included in Biden’s package, could curb power-sector emissions up to 76% below 2005 levels by 2031, according to a recent analysis by research firm Rhodium Group.
  • The “federal investment shifts the cost of decarbonization from ratepayers to the federal government, resulting in negligible changes in bills even when regulations add costs to the electric system,” states the report.

Biden’s infrastructure plan seeks to shield lower-income people from the default regressivity of climate policy in numerous ways, but two of the biggest are through electric-car incentives and a new program called the Clean Energy and Sustainability Accelerator.

  • The plan proposes investing $174 billion in electric cars and charging infrastructure, including giving consumers point-of-sale rebates (on top of expanded tax incentives) to buy American-made electric vehicles.
  • This is key to attract lower-income buyers. Although the lifetime cost of owning an electric car may be lower than its gasoline counterpart, the sticker price remains higher, dissuading lower-income drivers, says Scott Hardman, a researcher at the Institute of Transportation Studies at the University of California Davis.
  • The accelerator program would spend $27 billion in government money on mobilizing private investment into clean energy and retrofitting buildings with a “particular focus on disadvantaged communities that have not yet benefited from clean energy investments,” according to a White House fact sheet.

Yes, but: Biden’s plan also includes a clean electricity standard that supports his goal of a carbon-free electricity sector in 14 years (natural gas and coal currently comprise nearly 60% of the mix).

  • Standards, carbon taxes and regulations are by default regressive, hitting lower-income households harder than others unless explicit steps are taken to counteract that.
  • Kevin Rennert, a fellow at think tank Resources for the Future, says although such a mandate in isolation could raise electricity costs, the additional spending included in the package could offset increases.

What we’re watching: Biden’s electricity standard faces long odds against passing Congress, but at least some of his clean energy spending measures could muster congressional approval.