Today’s Key Takeaways: Sullivan and Brower call on Secretary Haaland to reverse the administrations actions that have harmed Alaska. DOI tells oil companies to make bricks without straw – reducing lands available for leasing and raising royalty rate by 50%. China’s virus lockdowns keeping supply chain snarled. Biden administration issued guidance requiring materials used for infrastructure purposes be produced in the U.S.
NEWS OF THE DAY:
OPINION: Interior Secretary Deb Haaland is visiting Alaska. Here’s what we’d like her to say.
Harry Brower, Dan Sullivan, Anchorage Daily News, April 15, 2022
As many Alaskans know, Secretary of the Interior Deb Haaland is visiting our state this coming week, including a visit to Utqiagvik. It’s a commitment that she gave to Sen. Dan Sullivan prior to her confirmation, and we are heartened that she’s living up to this commitment.
Because of the power Interior secretaries have over our state, the relationship between the secretary and state leaders has at various times in history been strained. And many of the decisions that the Interior Department, or DOI, has made under Secretary Haaland’s charge have the potential to continue that strained relationship.
But we have hope that when she sees our state with her own eyes, when she hears from the people directly affected by those decisions, she will change course and make announcements that will be good for our state, our people, and our country.
Specifically, among other actions that she might make, we would like her to announce the following: She and the president will faithfully execute the law as it relates the Arctic National Wildlife Refuge, or ANWR; DOI will fully support the Willow project by recommitting to complete the Environmental Impact Statement in June, as well as committing to support other energy projects within the National Petroleum Reserve in Alaska, or NPR-A; announce that DOI will accept the King Cove Road land exchange without further studies; and, at long last, approve the signed public land orders that will allow Alaska Native Vietnam-era veterans to apply for the land allotments that they were promised.
These actions would strengthen our communities and our country, save lives, and right wrongs that were inflicted on patriotic Alaskans.
First, the NPR-A on Alaska’s North Slope contains billon of barrels of oil and has the potential to contribute hundreds of thousands of barrels of oil a day to meet our country’s energy needs. Roughly the size of Indiana, the NPR-A was set aside in 1923 specifically for oil production in case of emergencies. We believe that Russia’s invasion of Ukraine, the disruption this is causing energy markets, and the astronomical prices Americans are paying at the pump, all constitute an emergency.
Yet the Biden administration continues to take actions, including freezing drilling on federal lands, that delay fields— like Willow— that are on the cusp of production, and making it impossible to explore and produce oil in other areas of the NPR-A.
We would also remind Secretary Haaland that Congress passed, and the former president signed legislation opening up the 1002 Area of ANWR. This is law. We would hope that she will announce her commitment to following the law, honoring the existing leases, and allowing for the remaining, legally required second lease sale within ANWR.
The bottom line: As we’ve both repeatedly said, it makes no sense for the Biden administration to call on other countries — like Venezuela, Saudi Arabia, and Iran — to produce more oil when we have it in our country and produce it using more rigorous environmental standards.
Further, Secretary Haaland is from New Mexico, where there is considerable energy production on tribal lands. On those lands, and throughout the state, the Bureau of Land Management, under DOI, has approved thousands of oil and gas permits during the secretary’s tenure, so she should understand how such production benefits Indigenous communities. Because of resource development on Alaska’s North Slope and elsewhere in the state, Alaska Natives are no longer among the most impoverished peoples on the planet. While the needs are still great, they are no longer one whale hunt away from starvation. We have health care clinics and schools in our communities. We have come far. We respectfully ask Secretary Haaland to treat Alaska like she treats New Mexico and allow us to continue developing our economy so that the progress we have made isn’t undone.
Secondly, we understand that she will visit King Cove during her trip. She will hear the community plead for an 11-mile gravel road that leads to Cold Bay and an all-weather airport that would enable them to be transported to medical facilities in emergencies. Too many lives have been lost and risked because of the lack of this road. In 2013, then Interior Secretary Sally Jewell visited the area. When she returned to D.C., from the comfort of her desk, she issued a statement denying the road, telling the residents of King Cove that protecting birds was more important than protecting them.
We fervently hope that Secretary Haaland isn’t so callous and commits to approving this life-saving road without delay.
Finally, we ask her to approve the public land orders that our Alaska Native Vietnam-era veterans have waited on to finally get the land allotments they were promised.
In 1906, Congress passed a law allowing Alaska Natives to choose an allotment of 160 acres in the territory. Those rights were extinguished in 1971 with the passage of the Alaska Native Claims Settlement Act, orANCSA. However, many Alaska Natives—thousands — were serving in Vietnam and missed the deadline to apply.
In 1998, the Alaska congressional delegation was able to open up the program, but, as a result of restrictions, thousands of veterans were still left out. Sen. Sullivan was able to get a bill passed that would give more Alaska Native Vietnam-era veterans the land that is owed to them. After countless studies, and millions of dollars’ worth of environmental reviews, the revocation of land orders just had to be implemented. All the Biden administration had to do — literally — was hit “send” to the Federal Register.
But the new administration delayed doing so for two years. Those two years are now up. We fear, however, that instead of immediately lifting the public land orders, she will instead announce that DOI will announce a decision based on a flawed environmental assessment, further delaying the program. We ask that the secretary does not take such action so that, at long last, the federal government can deliver on its promise to allow some of the most patriotic Americans — who were fighting for us in Vietnam — to finally secure the lands that are their birthright.
While Secretary Haaland visits our state, she will witness our great diversity of people and cultures, our geography, and a climate worthy of study by the finest scientific minds. She will see the promise of a new Arctic frontier. She will also see how our vast reserves of oil and gas, as well as minerals and metals, could and should play an integral role in moving our country toward an “all-of-the-above” energy future that includes renewables.
She will meet the most welcoming and patriotic citizens in the country, living in the most beautiful state in the country. She will see why we love our state, and why we are so committed to fighting for its people. We hope that she will join us as a partner in progress.
OIL:
Interior Department Announces Significantly Reformed Onshore Oil and Gas Lease Sales
April 15, 2022
In compliance with an injunction from the Western District of Louisiana, the Department of the Interior is taking action that reflects the balanced approach to energy development and management of our nation’s public lands called for in the agency’s November 2021 report on the Federal Oil and Gas Leasing Program. Today the Department announced that the Bureau of Land Management (BLM) will post notices for significantly reformed onshore lease sales that prioritize the American people’s interests in public lands and moves forward with addressing deficiencies in the federal oil and gas leasing program.
“How we manage our public lands and waters says everything about what we value as a nation. For too long, the federal oil and gas leasing programs have prioritized the wants of extractive industries above local communities, the natural environment, the impact on our air and water, the needs of Tribal Nations, and, moreover, other uses of our shared public lands,” said Secretary Deb Haaland. “Today, we begin to reset how and what we consider to be the highest and best use of Americans’ resources for the benefit of all current and future generations.”
On Monday, the BLM will issue final environmental assessments and sale notices for upcoming oil and gas lease sales that reflect this strategic approach. The lease sales will incorporate many of the recommendations in the Department’s report, including ensuring Tribal consultation and broad community input, reliance of the best available science including analysis of GHG emissions, and a first-ever increase in the royalty rate for new competitive leases to 18.75 percent, to ensure fair return for the American taxpayer and on par with rates charged by states and private landowners.
GAS:
Japan’s JERA weighs expanding LNG business to China
Ryo Mukano, Nikkei Asia, April 18, 2022
Japanese energy group JERA, one of the world’s biggest importers of liquefied natural gas, has taken a step toward a possible expansion of its LNG business to China.
The 50-50 joint venture between Tokyo Electric Power Co. Holdings and Nagoya-based Chubu Electric Power recently established a unit in Beijing to conduct market research for LNG terminal construction and trading.
The move comes after China surpassed Japan as the world’s top LNG importing nation. Chinese demand for energy is only expected to rise as its economy grows.
Several JERA employees have been assigned to the new unit. The company will consider geopolitical risks including Russia’s war on Ukraine as it makes a decision on a Chinese business.
China’s LNG imports rose by one-fifth in 2021 to about 80 million tons, compared with Japan’s roughly 75 million tons imported that year.
JERA is involved in everything from procurement and production of LNG to gas-fired power generation. The company handles 40 million tons of LNG a year and accounts for about 40% of Japan’s annual imports of the fuel. Its hubs for LNG trading include Singapore.
A Chinese LNG business by JERA could help provide stability to Japan’s energy supply. In one scenario, excess LNG stocks in China could be diverted to Japan to meet a shortfall.
Elsewhere in Asia, JERA will join in building one of Southeast Asia’s largest natural gas-fired power plants and LNG offloading facilities in Vietnam.
MINING:
China’s spreading lockdowns keeping metals supply chains snarled
Bloomberg News, April 18, 2022
China’s virus lockdowns are spreading to other parts of the country, keeping metals supply chains snarled and demand subdued even as the situation in Shanghai seems to be improving.
There are signs that some of the transport bottlenecks and factory closures in and around Shanghai are easing, but anti-virus measures now appear to be spreading to other parts of Asia’s largest economy. Tighter controls have been imposed in the cities of Suzhou and Zhengzhou, the capital of the central Henan province. China has so far decided to stick with its Covid Zero policy, despite growing evidence that it’s threatening economic growth.
A copper fabricator in Henan that produces pipes and parts used in household appliances and medical devices said its sales were down 20% to 30% in tonnage terms in the first half of April from a year earlier. Many customers are at a standstill due to restrictions, said an official at the company, who asked not to be identified because of internal rules.
In the southwest of China, Yunnan Tin Co., the country’s largest producer of the metal, said it had halted production at its mining unit to comply with local government virus restrictions. The disruption was expected to be short-term, the company said in an exchange filing.
The official at the fabricator in Henan said its customers around China were facing problems, with some air-conditioner producers unable to operate due to lack of component deliveries.
Shanghai released plans for a return to workplaces in the city over the weekend, without providing a timetable. Some copper rod producers in neighboring provinces secured truck passes to access the metal from warehouses, researcher Shanghai Metals Market said on Friday. That had enabled two plants to re-open, meaning 10 of 16 remain at least partially closed, it said.
Metals prices in China were mixed after the central bank refrained from cutting its main policy rate on Friday and gross domestic product and industrial production data beat estimates on Monday. The first-quarter growth figures don’t capture the full extent of the lockdowns, which only intensified toward the end of March.
Copper closed down 0.3% on the Shanghai Futures Exchange. Aluminum slipped 0.1%, while zinc rose 0.3% to the highest since 2007 and nickel climbed 1.2%.
POLITICS:
Biden mandates U.S.-made steel and iron for infrastructure package spending
Oriana Gonzalez, Axios, April 18, 2022
The Biden administration will issue guidance on Monday requiring materials used for infrastructure purposes be produced in the U.S., AP reported and a White House deputy press secretary confirmed.
State of play: Materials used for bridges, highways, water pipes and other structures must be sourced inside the United States if they are funded by the $1 trillion bipartisan infrastructure package.
- However, if there are not enough domestic producers or if the materials are too expensive, the requirement can be waived, AP notes.
Details: “[N]one of the funds” allocated to federal agencies for projects may be spent “unless all of the iron, steel, manufactured products, and construction materials used in the project are produced in the United States,” per AP.
What they’re saying: “Another major step [the president] is taking to keep fueling the manufacturing resurgence we’re seeing on his watch, and to bring more American jobs back from overseas,” White House deputy press secretary Andrew Bates tweeted.
The big picture: Since the beginning of his administration, President Biden has focused on the idea that federal agencies and companies “buy American” for products and services in an effort to ease supply chains.
- Last November, the White House even made plans to publicize all requests to waive the proposed rule to purchase U.S.-made products so that the public could scrutinize Biden’s commitment to foster sales of domestic materials.