Today’s Key Takeaways: Biden’s energy strategy: shipping reliable energy production overseas. IEA predicts huge uncertainty in oil markets in next few weeks. Who will win the race to be next US suppler of LNG to Europe? Senators Murkowski and Sullivan press Deb Haaland to re-approve Ambler Access Project. Republicans need 1 seat to control U.S. House.
NEWS OF THE DAY:
Texas energy leader: Biden’s COP27 agenda killing oil and gas
World Oil Staff, November 13, 2022
Within days of cruising to re-election victory over a Democrat challenger, Texas Railroad Commission Chairman Wayne Christian took aim at President Joe Biden’s “anti-fossil fuels” agenda, saying his energy strategy is to ship U.S. energy production overseas.
“Today, President Joe Biden touted his anti-fossil fuel agenda to his fellow elitists at the United Nations’ (UN) Climate Change Conference (COP27) in Egypt,” began a sharply worded news release from Christian’s office at Texas’ top oil and gas regulator.
“The president boasted his administration’s successful battle against oil and natural gas through their international commitments to “green” initiatives, stifling financial investment to fossil fuels, the passage of the ill-named Inflation Reduction Act, and the establishment of new methane rules,” the release said.
The release included a statement attributed to Christian:
“Texans won’t stand for Biden’s war on oil and gas, and I’ll fight tooth-and-nail to defend our state’s production. With energy inflation high at almost 20%, Biden’s energy agenda is a disaster from pleading for more production from foreign nations to draining the strategic petroleum reserve to more subsidies toward wind and solar and now threatens to shut down the Permian Basin
“The president’s energy strategy is merely shipping reliable energy production overseas, which jeopardizes national security and drives up costs to consumers just to virtue signal that he is progressive on climate change. The Permian, not OPEC, is the answer to cheap, plentiful, and reliable energy,” Christian said.
The president’s “empty rhetoric,” according to Christian’s announcement, “follows years of bad energy policies from shutting down Keystone XL to halting federal permitting production to new laws and regulations aimed at destroying domestic oil and gas production.”
Texas produces 43% of the nation’s oil and 25% of its gas, and the industry represents about a third of the state’s economy with nearly two million employees and pays an average of about $12 billion in annual state and local taxes and royalties.
Christian’s announcement highlighted the benefits of that income to benefit the state’s educational and healthcare institutions and infrastructure. It also emphasized that the United States has become the world’s top exporter of LNG this year, and Texas is responsible for almost half of that production.
OIL:
The IEA Warns Of A “Myriad Of Uncertainties” For Oil Markets
Tsvetana Paraskova, OilPrice.Com, November 15, 2022
The EU embargo on Russian crude oil and refined products will create huge uncertainties in the global oil and product markets in just a few weeks, according to the International Energy Agency (IEA).
The oil market is already feeling uncertainties stemming from a worsening economic outlook, the agency said in its Oil Market Report (OMR) on Tuesday, noting that China’s weak economy, Europe’s energy crisis, surging product cracks, and the strong U.S. dollar are all weighing heavily on consumption.
Amid signs of weakening oil demand growth, “The approaching EU embargoes on Russian crude and oil product imports and a ban on maritime services will add further pressure on global oil balances, and, in particular, on already exceptionally tight diesel markets,” the IEA said.
“A proposed oil price cap may help alleviate tensions, yet a myriad of uncertainties and logistical challenges remain,” said the agency.
The G7 group of the most industrialized nations and the EU are looking to introduce a price cap on Russian oil, aiming to reduce Vladimir Putin’s oil revenues for his war chest. The allies will ban maritime transportation services for Russian oil unless the products are purchased at or below a certain price cap.
The U.S. and the G7 allies and Australia are currently working on setting the details of the price cap before the December 5 deadline, after which the EU embargo on imports of Russian crude oil by sea enters into force.
Reports emerged earlier this month that the G7 members had agreed to set a fixed price for Russian oil exports as a cap rather than a price set as a discount to a benchmark, Reuters reported, citing an unnamed source familiar with the discussions.
The price cap will likely benefit both China and India, two of the largest importers of Russian oil since sanctions came into effect.
GAS:
Race Is On to Be the Next Big US Supplier of LNG to Fuel-Starved Europe
Sergio Chapa, Yahoo! Finance, November 15, 2022
It’s been eight months since Russia invaded Ukraine, sending global commodity prices soaring and forcing energy-ravenous countries into a mad competitive dash to secure new fuel sources ahead of winter.
While the US filled some of the supply gap by exporting huge quantities of liquefied natural gas from its seven plants, global markets are going to have to wait at least two more years before any new LNG supplies from the US come online. Three large-scale projects requiring more than $30 billion of financing are now under construction in Texas and Louisiana, yet none will be ready next year.
MINING:
Murkowski, Sullivan Continue to Press for Fair Process, Timely Re-Approval of Ambler Access Project
U.S. Senators Lisa Murkowski and Dan Sullivan (both R-Alaska) sent a new letter to Interior Secretary Deb Haaland reiterating their strong support for the Ambler Access Project (Ambler Road). The Senators’ letter, in response to the Department of the Interior’s (DOI) recent request for public input as it scopes a Supplemental Environmental Impact Statement (SEIS) for the project, urges DOI to limit its analysis to court-identified issues and to quickly complete the SEIS so development of this vital road link can finally begin.
From the Senators’ letter:
“Given the delays to date and the strategic importance of the Project, it is essential that DOI limit the scope of its additional analysis to the two specific deficiencies that BLM identified to the Court. BLM states in its notice of intent published on September 20, 2022, however, that it is seeking comments ‘concerning the scope of the analysis, potential alternatives, and identification of relevant information, and studies.’ It would be inappropriate and a waste of taxpayer resources for the scope of the analysis to go beyond what the BLM identified to the Court in its request for a voluntary remand.Further setbacks for this Project will ultimately benefit no one, while directly undermining the administration’s own policy goals.”
To read the full letter, click here.
Background:
The Ambler Road is needed to provide access to the world-class Ambler Mining District and facilitate the responsible development of high-grade mineral deposits—including copper, cobalt, zinc, silver, gold, and other metals—located within it. In addition to good jobs and economic diversification for Alaska, the Ambler District will serve as a domestic source of key strategic minerals and metals at the outset of an era where global demand for them is projected to soar.
The Alaska National Interest Lands Conservation Act (ANILCA) of 1980 guarantees a right-of-way across federal land to ensure the Ambler Road can be constructed. Only a small part of the road’s route crosses federal land, but in recent years, DOI has ignored the law to use that as a mechanism to repeatedly delay this important project.
The Alaska Industrial Development and Export Authority (AIDEA) submitted its application to develop the 211-mile road project in November 2015. The Bureau of Land Management (BLM) published a draft EIS on August 30, 2019, and held 22 public meetings in local communities, Anchorage, Fairbanks, and Washington, DC. Together with the U.S. Army Corps of Engineers, BLM issued a favorable Record of Decision (ROD) for the project in July 2020.
Despite extensive public process and years of exhaustive environmental review, the Biden administration was granted Court approval for a voluntary remand of the Environmental Impact Statement and suspended the right of way for the project on February 22, 2022.
In May 2022, the U.S. District Court for Alaska granted the Biden administration’s remand request. BLM requested remand to conduct additional, narrowly tailored analysis for potential subsistence impacts under Section 810 of ANILCA and consultation with tribes pursuant to Section 106 of the National Historic Preservation Act.
After four months of delay, BLM initiated a 45-day public scoping process for an SEIS on September 20, 2022. BLM’s notice of intent states that the agency will evaluate a “range of alternatives” related to a variety of topics and provides no timeframe for the completion of the review. In their letter, the Senators reiterated to DOI that the project has already been the subject of extensive scoping and emphasized that adding new topics to the SEIS would be directly contrary to the agency’s stated intentions before the court.
This letter supplements Murkowski and Sullivan’s recent call for DOI to promptly complete its work to re-approve the Ambler Road. The Senators urged DOI to commit to a concrete timeline, allow the project proponent to continue important baseline scientific work, and allow geotechnical drilling to proceed; no response has been received to date.
POLITICS:
GOP one seat away from controlling House
Erin Doherty, Andrew Solender, Axios, November 15, 2022
Republicans are just one seat away from the 218 they need to retake control of the House of Representatives.
The big picture: Democrats have already gained control of the Senate after winning key races in Nevada, Arizona and New Hampshire.
- Republicans entered the midterms needing five seats to win House control.
What we’re watching: 13 races remained uncalled by the Associated Press as of Tuesday morning. Nine are in California, with the rest in Alaska, Colorado, and Maine.
- Democrats would need to run up the score in those remaining districts to keep the House, which would likely require flipping several GOP-held seats — an unlikely outcome at this stage.
- The razor-thin race for House control is a stark reversal of fortunes for Republicans, who came into the midterms optimistic about the possibility of a “red wave.” Wins by endangered Democrats like Reps. Abigail Spanberger (D-Va.) and Elissa Slotkin (D-Mich.) put that outcome out of reach.
- And in Washington’s 3rd district, Republican Joe Kent lost in an upset to Democrat Marie Gluesenkamp Pérez.