New oil discovery in National Petroleum Reserve-Alaska points to larger potential
S & P Global Platts, March 31, 2021
Could mean oil-bearing Nanushuk formation larger than believed
Initial data indicates presence of light, high-quality oil
Anchorage — Australian independent 88 Energy has made an apparent oil discovery with its Merlin-1 exploration well in the southeast National Petroleum Reserve-Alaska, or NPR-A, and more test results are expected in the next few days, the company said March 31.
An independent geologist said the find could be significant because it would show that an oil-bearing regional geologic formation, where discoveries have previously been made, is larger than thought.
Based on geologic modeling and seismic data, 88 Energy estimates a potential oil resource of 650 million barrels at Merlin-1.
The NPR-A is a 23-million-acre federal reserve west of Prudhoe Bay and other large producing fields on the North Slope.
88 Energy found oil at multiple intervals in Merlin-1 but a significant oil column was detected in a target zone in the Nanushuk, a geologic formation extending across the eastern NPR-A where other companies have made discoveries.
Two of those discoveries are now in development planning, ConocoPhillips’ “Willow” discovery north of the Merlin well and Pikka, a find on state lands east of the NPR-A that is being developed by New Guinea-based Oil Search, are both in the Nanushuk and are targeted for production expected by 2026.
ConocoPhillips and Oil Search say their discoveries are now estimated to hold several hundred million barrels of recoverable oil. ConocoPhillips has also made a discovery at “West Willow,” a few miles west of Willow, and an apparent find at “Harpoon,” a few miles to the southwest.
88 Energy said wireline testing is now underway at Merlin 1 to assess the mobility of the oil, or its ability to flow through rocks. But Richard Garrard, an independent Alaska exploration geologist, said data released by 88 Energy indicates the presence of light oil. “That is an encouraging sign,” Garrard said.
88 Energy also said the target zone, an oil column, in the Nanushuk, appears thicker than that encountered at Willow by ConocoPhilllips. However, Garrard said not enough is known about this, such as whether there could be shales occurring with the oil-bearing sands. The current wireline tests will also confirm the porosity and permeability of the rock.
“Whist there is still work to do to determine a discovery, the results to date are encouraging,” 88 Energy’s managing director said in the company’s statement.
The company is also planning another test at a second, nearby prospect, Harrier 1, with the primary target also in the Nanushuk formation, as well as another geologic formation that has been productive in other exploration in the western North Slope. 88 Energy said its geologic modeling shows a potential for 450 million barrels of recoverable resources at Harrier.
In a related development, 88 Energy has also satisfied conditions to complete its acquisition of the Umiat field, a historic oil discovery made in 1945 by the US Navy that is adjacent to leases held where the Merlin well was drilled.
Eleven appraisal wells were drilled by the Navy and a private company, but Umiat was never commercially developed. 88 Energy cemented and plugged old wells to satisfy US Bureau of Land Management terms when it acquired two federal leases at Umiat covering 17,633 acres.
U.S. LNG export bonanza reshapes energy map in Asia
Oil & Gas 360, April 2, 2021
U.S. exports of liquefied natural gas (LNG) to China, Japan and South Korea, the biggest importers of the fuel, have surged to record highs in recent months as the heavily industrialized region recovers from the COVID-19 pandemic, Eikon trade data shows.
As with the ramp-up of U.S. oil exports that forced heavyweights like Saudi Arabia to find other buyers, what was dubbed Freedom Gas by the administration of President Donald Trump is also changing global energy flows and quietly gaining a stranglehold on key markets in Asia.
To Support America’s Electrification, We’ll Need More Copper Than Ever Before
General James T. Conway, Thomas M. Conway, Real Clear Energy, April 1, 2021
Transportation, both in the U.S. and across the world, is undergoing a transformation to a connected, electric future. The changing demands of this electric vehicle (EV) switch requires a widespread restructuring of today’s supply chains for a variety of minerals and materials.
The headlines for this supply chain switch have focused largely on critical minerals like lithium, cobalt, and rare earth elements. But a rocketing demand for copper—which recently shot above $9,000 per ton for the first time in almost a decade amid supply concerns, and is predicted to exceed $10,000 per ton in the near future—has been all but overlooked.
With all the focus on the need for critical minerals, this oversight is ironic given that many of the critical minerals, like rhenium, are in fact common by-products of copper deposits. If the U.S. is to secure its EV industry, it must also focus on building a more robust copper supply chain.
Compared to the high import dependencies for key EV battery minerals—92 percent, 100 percent, 59 percent and 100 percent for lithium, cobalt, nickel and graphite respectively—copper’s 35 percent net import reliance appears low.
However, EVs require four times as much copper as conventional vehicles and demand will only grow as countries mobilize to electrify their vehicle fleets, let alone the rising need for copper wiring in grid stabilization infrastructure, EV charging stations, and wind turbines.
Total copper demand for the EV sector is projected to rise from less than 500,000 tons today to nearly 1.5 million tons in 2025, and to 3.3 million tons in 2030. Copper’s dizzying rise in price, from a low of $4,617 per ton in March 2020, is partly due to rising anticipated demand from the EV transition and its requisite infrastructure.
n total, it is anticipated we will need to produce the same amount of copper in the coming 25 years that the world has produced in the last 5,000 years to meet consumer demand, including the needs of the EV transition and wider electrification goals. However, the U.S.’ capacity to produce and process copper has yet to rise with it.
Today, there are only two copper smelters operating in the U.S.—Rio Tinto’s Kennecott project in Utah and Freeport’s Morenci smelter in Arizona—with permitting for new smelters unlikely.
Worse still, we are not the only country in the hunt for copper and its refined products to power the EV transition—China already consumes half the world’s supply and seeks to lead the electrification shift—and yet the amount of new domestic capacity is miniscule. The Pumpkin Hollow mine in Nevada, for example, is the first new U.S. copper mine to open in a decade.
Other projects, most notably the Resolution Copper mine 60 miles east of Phoenix, hold considerable potential to help the U.S. meet its growing copper demand if it can withstand over a decade of permitting and public engagement. Over a mile underground, this massive deposit of copper has the potential to supply 20 percent of U.S. copper demand.
If we are to compete, we must adopt a comprehensive minerals-to-markets strategy, which requires locking down enough mineral supply to meet our EV and electric grid infrastructure ambitions. Securing our copper supply chain on the cusp of this exponential demand boom is vital.
We must therefore work to preserve the supply chain we currently have while also finding ways to grow secure supply. We need to optimize current operations, work with allies like Canada and Australia to secure supply from their mines and smelters and also ensure we are using innovative approaches to extract critical minerals that nature has sought fit to make a by-product of copper deposits.
Finally, we must advance the permitting of responsible domestic copper production, making our high environmental and labor standards an advantage when marketing this copper as Made in the USA.
Oil Giants Win Climate Suit as Judges Push For Political Fix
Bloomberg Law, April 1, 2021
New York City suffered another setback in its effort to make Exxon Mobil Corp., BP Plc and other energy companies help cover the public costs of dealing with climate change, as a federal appeals court ruled the global problem demands political rather than legal action.
The ruling Thursday by the U.S. Court of Appeals in Manhattan is a warning sign for those trying to use the courts to hold the industry responsible for a problem that could cost taxpayers trillions of dollars in coming years. Chevron Corp., Royal Dutch Shell Plc and ConocoPhillips were also sued in the case.
The court said global warming “is a uniquely international concern” that requires the federal government to step in rather than judges. Only the U.S. Environmental Protection Agency has the authority to regulate domestic greenhouse gas emissions, the unanimous three-judge panel held.
New York City “sidestepped” federal procedure with a state-law tort suit against the energy companies even though their commercial activity of selling fossil fuel products around the world is “admittedly legal,” U.S. Circuit Court Judge Richard Sullivan wrote for the court.
‘Patchwork of Claims’
“In so doing, the City effectively seeks to replace these carefully crafted frameworks –- which are the product of the political process –- with a patchwork of claims under state nuisance law,” Sullivan wrote.
A lower court judge in 2018 tossed out the lawsuit on similar grounds, ruling that the federal Clean Air Act governs carbon dioxide emissions and blocks lawsuits. New York City’s press office didn’t immediately respond to a message seeking comment.
“As we’ve said from the beginning, lawsuits like New York City’s do not belong in the courts and do nothing to advance meaningful efforts that address climate change,” Exxon spokesman Casey Norton said in an email. “We support global efforts from policymakers, companies, and individuals to develop real solutions.”
“Today’s unanimous opinion by a distinguished panel of judges appointed by presidents from both parties explains in clear detail why the U.S. climate tort lawsuits are meritless, applying established law as agreed upon by the Justice Department under the previous two U.S. administrations,” Chevron General Counsel R. Hewitt Pate said in a statement.
About a dozen cities, counties and states across the U.S. have sued Exxon, Chevron, BP, Royal Dutch Shell, and their peers. The suits seek to reimburse taxpayers for the costs of adapting to climate change — from building multibillion-dollar sea walls to repairing damage from powerful storms and, perhaps soon, moving whole communities inland.
Top aides fill in more blanks on Biden’s climate push
Andrew Freedman, Ben Geman, Axios, April 2, 2021
Top White Houseclimate aides have shared a little more of their thinking about its massive climate spending proposal.
Why it matters: The White House is facing intense political pushback on the plan’s size, so their success or failure at justifying its costs could matter in Congress and the ballot box.
They’re emphasizing the cost of inaction. While the package has a hefty price tag, so too does inaction, both in damage from extreme weather events and geopolitics, the aides said.
- “Every year that we delay, we’re talking about other countries racing ahead to seize that competitive advantage in these incredibly important industries of the future. So, the cost of inaction is mounting already,” said Gina McCarthy, President Biden’s top domestic climate adviser.
The plan’s link to a looming deadline is tricky. The Biden team has an April 22 deadline to unveil a closely watched 2030 emissions target — and convince the world it’s credible.
- The spending plan’s legislative fate will still be unknown, so officials need to figure out how to finesse those timelines.
- McCarthy said Thursday that the emissions target under the Paris deal (called a “nationally determined contribution”) will rest in part on the big investments they’re asking Congress to approve.
- But she also emphasized executive steps, citing the new multiagency initiative to expand offshore wind power development. And more broadly, officials are planning new emissions regulations under their existing powers.
The sales team is in place. Biden yesterday named five Cabinet heads who will take the lead in pitching the plan to the public and Congress:
- Transportation Secretary Pete Buttigieg, DOE’s Jennifer Granholm, HUD’s Marcia Fudge, Labor’s Marty Walsh, and Commerce’s Gina Raimondo.
They’re really not into carbon pricing. McCarthy offered a careful but pretty clear signal that carbon taxes or cap-and-trade isn’t part of their thinking.
- She told reporters that while Biden’s open to ideas, their Capitol Hill focus is on big investments and the proposed “clean electricity standard.”
- “This reflects his interest in making sure that he meets his commitment, and that he uses the best tools available and that’s what you see in front of you,” McCarthy said.
Sizing up the White House spending goal: Nonprofit World Resources Institute’s analysis — which is supportive of the proposal — says at least $1 trillion would “go to sectors that fall under the broad umbrella of climate change, clean energy and environmental justice.”
Of note: Those tallies don’t include the cost of the Biden plan’s new and expanded tax credits around renewables, electric vehicle purchases, transmission and more.
- The research firm Capital Alpha, in a note, estimates those costs at around $300 billion over 10 years.
What to watch: Republicans’ criticism of Biden’s infrastructure package isn’t just about its cost, but also the definition of “infrastructure.”
- This time around, they’ll try to convince voters the infrastructure legislation is more of a wish list for progressives than a “roads-and-bridges” measure, Axios’ Lachlan Markay and Alayna Treene report.