Today’s Key Takeaways: 50 years ago today, permit signed for TAPS! Global demand to drive oil prices higher. New US LNG capacity to drive up prices in 2024. Murkowski, Manchin grill administration on mining investments. AK shift to renewables requires billions in investment.
NEWS OF THE DAY:
- On this day in history, 50 years ago, 1974: Secretary of the Interior Rogers Morton signed the permit for a 789-mile, $5 billion pipeline to tap the rich oil fields of Alaska’s North Slope. The goal is to have Alaska oil reach markets in the lower 48 by 1977.
OIL:
Rystad Energy Expects Strong Demand to Drive Oil Prices Higher
Tsvetana Paraskova, OilPrice.Com, January 24, 2024
Global oil demand remains pretty solid and could surprise to the upside this year, tightening market balances and potentially leading to higher prices, Claudio Galimberti, head of global oil macro research at Rystad Energy, told Bloomberg in an interview this week.
So far into 2024, oil prices have remained stuck in a narrow trading range of around $75 to $80 per barrel Brent. That’s mostly because market players perceive global oil demand is currently weak.
However, demand continues to grow steadily, which would lead to a tight market this year and push oil prices higher, according to Galimberti.
GAS:
US gas market anticipates new LNG capacity in 2025, driving up future prices. Golden Pass LNG’s delayed 18.1 million mt/year facility impacts 2024 gas curve. December 2024 Henry Hub forwards average at $3.69/MMBtu; summer 2024 strip at $2.45/MMBtu. Expected LNG capacity increase in 2024 is about 8.4 million mt/year. 2025 to see significant LNG capacity growth, potentially adding 18 million mt/year. Market sentiment for 2024 dampened, but strong expectations for 2025 due to LNG expansion. Mentions: Golden Pass LNG, Mizuho Securities, Pickering Energy Partners, Source: S&P Global
From LNG Global Newsletter, January 24, 2024
MINING:
Senators grill Turk on mine investments
Shane Lasley, Metal Tech News, January 24, 2024
Sens. Murkowski, Manchin contend administration is misinterpreting Congress intent when it comes to funding domestic mining projects.
While the U.S. Department of Energy is investing billions of taxpayer dollars into establishing robust battery material processing and battery manufacturing capacity in the United States, the federal agency has done little to support domestic mines that would feed critical minerals into domestic electric vehicle supply chains.
Sen. Lisa Murkowski, R-Alaska, believes DOE is putting the domestic battery materials processing cart before the battery minerals horse as part of a White House strategy that is resulting in the minerals for America’s clean energy future being mined anywhere but China – or the U.S.
“You’ve got an administration that is approaching how we deal with this with one hand deliberately tied behind our back – and we are talking about the critical minerals that go into this,” Murkowski said while questioning Department of Energy Deputy Secretary David Turk during a Jan. 11 Senate Energy and Natural Resources Committee hearing on EV supply chains.
While Turk reiterated DOE’s commitment to strengthen the reliability and resilience of America’s EV supply chains, he indicated the department’s hands were also tied when it comes to supporting domestic battery materials mining projects such as Graphite One Inc.’s Graphite Creek project in western Alaska.
“We are trying to be as creative as possible with the tools and the authorities that we have got,” Turk said in response to Murkowski’s statement that potential future mining projects such as Graphite Creek are not eligible for DOE’s battery supply chain loan program.
POLITICS:
Report: Alaska’s Railbelt can shift to renewables, but that would require big capital investment
Yereth Rosen, Alaska Beacon, January 23, 2024
Alaska’s most populous corridor can generate most of its electricity through renewable energy, but would require significant upfront capital investment, a University of Alaska Fairbanks team said in a new report.
The report, issued by UAF’s Alaska Center for Energy and Power, found that by 2050 non-fossil energy can supply anywhere from 70% to 96% of the power needed to produce electricity along the Railbelt. The region comprises communities from Fairbanks in the Interior to Seward on the Kenai Peninsula, the corridor along the Alaska Railroad line that hold the vast majority of the state’s population.
The report compared four scenarios for power generation, from a continuation of the current heavy reliance on natural gas to varying blends of solar, wind, hydro, tidal and nuclear energy.