OIL
Alaska By The Numbers – November 2020: North Slope Renaissance Return?
Ed King, King Economics, December 1, 2020
The North Slope oil production outlook has improved
A rising oil price and more certainty around Alaska’s oil tax system has already improved the outlook for North Slope production.
ConocoPhillips recently announced that it will resume drilling operations this winter. Going from zero to four active rigs will add thousands of barrels per day to the pipeline and put up to 1,000 Alaskans that lost jobs in the oil industry back to work.
Major development prospects, like Willow and Pikka, are firmly back above their breakeven prices. Those projects now look like they will get positive final investment decisions in 2021. While it was starting to look like producers would enter harvest mode and stop investing in Alaska, November provided some hope that our renaissance will continue.
GAS
Exxon faces historic write down after energy markets implode
Keith Crowley, Bloomberg News, December 1, 2020
Exxon Mobil Corp. is about to incur the biggest write down in its modern history as the giant U.S. oil and gas producer reels from this year’s collapse in energy prices.
Exxon — traditionally far more reluctant to cut the book value of its business than other oil majors — on Monday disclosed it will write down North and South American natural gas fields by US$17 billion to US$20 billion. That could make it the industry’s steepest impairment since BP Plc’s 2010 Gulf of Mexico oil spill that killed 11 workers and fouled the sea for months. Meanwhile, capital spending will be drastically reduced through 2025.
MINING
Company planning Pebble mine will appeal Corps of Engineers’ decision to deny key permit
Tim Bradner, The Frontiersman, December 1, 2020
The company planning development of a large copper/gold mine 200 miles southwest of Anchorage, near Iliamna, will appeal a U.S. Army Corps of Engineers permit for the mine.
Mike Heatwole, spokesman for Pebble Limited Partnership, or PLP, said his company has 60 days to file an appeal of the corps’ decision to deny permits in a record of decision issued last week.
Heatwole could not say when the appeal would be filed or the grounds for the appeal but people familiar with the project cite inconsistencies between the record of decision, which found the project against the public interest, and the corps’ final environmental impact statement, which said the mine could developed without adverse impact to commercial and subsistence fisheries in the region.
There may also be inconsistencies in the federal government’s policies over wetlands impact mitigation requirement for major Alaska development projects approved in recent years.
POLITICS
China Can Literally Pull the Plug on US High Tech Manufacturing and Defense Applications
Pini Althaus, Real Clear Energy, December 1, 2020
A Bipartisan, public/private collaboration is required to mitigate this risk
Even in our hyper-partisan political times, here’s one thing we should all agree on: We shouldn’t have to rely on any other country, and certainly not the Chinese Communist Party (CCP), for our critical defense applications, electric vehicles, and consumer technology such as medical technology, clean energy applications and the 5G network. Yet nearly every high-tech device not made in China that we proudly label “Made in the USA” – from fighter jets to cell phones to wind turbines – deserves another more dubious moniker, “Made with components imported from China.”
The U.S., the EU, Japan, Korea and all other countries where manufacturing is the backbone of their economies, are more dependent than ever on China for the importation of so-called rare earth elements; the technological building blocks needed to power electric vehicles, move us more towards a greener economy, activate touchscreens, and guide missiles. Meanwhile, China has repeatedly threatened to stop exporting those minerals. It should be noted that this is absolutely not about the “Trade War” or which political party or president is in power. This is about the “Made in China in 2025” and other initiative, as the CCP clearly intends to further solidify its position as the “superpower” of global manufacturing – an initiative that transcends any U.S. administration and its trade policies, thereby maintaining absolute control of the critical minerals supply chain as part of that mandate.
CLIMATE CHANGE CONVERSATIONS
From the Washington Examiner, Daily on Energy:
MORE CARBON CAPTURE IN THE PIPELINE: The number of carbon capture projects in operation and under development worldwide continued to grow in 2020 for the third year in a row, according to a status report released this morning by the Global CCS Institute.
This year, 26 operating commercial carbon capture projects — ranging from natural gas processing facilities to ethanol production to coal-fired power plants — captured nearly 40 million tons of carbon dioxide, the report finds.
The U.S. remains the leader in operating carbon capture projects, and 12 of the 17 new commercial projects added to the development pipeline this year are located in the U.S., the Institute said. However, countries in Europe are ramping up carbon capture, including significant investment from the Norwegian government in a carbon capture project, increased funding for carbon capture in the United Kingdom, and the inclusion of carbon capture to qualify for the European Union’s 10 billion Euro innovation fund.
Despite the growth this year, the Global CCS Institute notes it is not enough to achieve global climate goals. To keep warming to 1.5 degrees Celsius, the more ambitious goal under the Paris Agreement, the world should have more than 2,000 carbon capture facilities in operation by 2050, a more than hundredfold scale-up over the next few decades, the report said.