Today’s Key Takeaways: EPA emissions rule threatens highway funding. Worries about Chinese economic growth impacts oil prices…again. “More to come” – lawsuits over gas bans. Palmer Project drilling begins. Rep. Peltola votes “yes” on legislation to stop gas stove bans.
NEWS OF THE DAY:
RED STATES WARN EMISSIONS RULES THREATEN HIGHWAY FUNDING: Some states are warning the Environmental Protection Agency that its proposed vehicle emissions rules would dry up a key source of funding for new transportation infrastructure and stunt needed expansions and improvements to the nation’s roads.
Red states say the rules would dry up the highway trust fund: Five Western states asked EPA to reconsider the pace at which it proposes to impose stricter emissions regulations for model year 2027 and later vehicles so that infrastructure funding via the Highway Trust Fund, which is financed by the federal gasoline tax, doesn’t become a victim of a transition to EVs.
It’s one of several economic lines of attack that opponents of the proposed EV-forcing rules have leveled against them since EPA proposed them in April, the other leading one being the higher cost of battery-electric vehicles, especially semi-trucks, relative to combustion-driven models.
Demand and revenue: More EVs and fewer combustion engines means lower fuel demand and therefore less tax revenue from retail fuel, the logic goes.
“This would place significant downward pressure on highway and bridge investment, which already faces an investment backlog of $786 billion,” the states of Idaho, Montana, North Dakota, South Dakota, and Wyoming said in published comments to EPA last week, citing Department of Transportation estimates.
The states suggested EPA strengthen the emissions regulations for light-, medium-, and heavy-duty vehicles at a more gradual rate than proposed.
“A more gradual approach would provide policymakers more time to consider and find ways to make up for HTF revenue loss caused by EPA tailpipe emission rules so as to better fund needed highway investments that provide so much public benefit,” they said.
That’s so 2022: Some lawmakers favored a federal gas tax holiday last year to lessen the impact of rising gasoline prices. Eventually, President Joe Biden, preoccupied with the politics of high prices, endorsed a gas tax holiday, too, although it never happened.
Other Republicans and Democrats opposed it, and the most common source of opposition to the gas tax reprieve was worry that the highway trust fund would be strung out to dry.
Oil falls on uncertainty about Chinese economic growth
Nia Williams, Ahmad Ghaddar, Reuters, June 19, 2023
Oil prices fell on Monday as questions over China’s economy outweighed OPEC+ output cuts and the seventh straight drop in the number of oil and gas rigs operating in the United States.
Brent crude fell 54 cents, or 0.7%, to $76.07 a barrel by 1549 GMT while U.S. West Texas Intermediate (WTI) crude lost 64 cents, or 0.9%, to $71.14. Trading volumes were thin due to a U.S. holiday.
Both contracts ended last week with gains of more than 2%.
“(China’s) economy is navigating through powerful headwinds,” said PVM oil analyst Tamas Varga. “The property market has not healed from last year’s slump, and in May both retail sales and industrial output came in below expectation.”
A number of large banks have cut their forecasts for China’s 2023 growth in gross domestic product after May data last week showed the post-COVID recovery in the world’s second-largest economy was faltering.
China is widely expected to cut its benchmark loan rates on Tuesday after a similar reduction in medium-term policy loans last week to shore up a shaky economic recovery.
‘More are sure to come.’ States fret over gas ban lawsuits.
David Iaconangelo, ENERGYWIRE, June 16, 2023
City and state officials filed a flurry of legal briefs with the 9th Circuit Court of Appeals, asserting that the court has jeopardized local authority by striking down Berkeley, Calif.’s ban on gas hookups.
States, counties, and cities around the country are warning that a recent federal court ruling could undermine local efforts to phase out natural gas in buildings.
In April, the 9th Circuit Court of Appeals struck down the nation’s first-ever gas ban in Berkeley, Calif., ruling that the ban was preempted by the federal government’s authority. The decision has prompted officials and advocates from thousands of cities and almost every state to file briefs asking the court to rehear the case — and expressing concern that their own authority to restrict fossil fuels in buildings could be in jeopardy.
Utility regulators in New York, for example, pointed to a new statewide ban on gas in new buildings, which state lawmakers enacted earlier this year.
“The Ninth Circuit panel ruling … may erroneously raise questions about the Commission’s authority over planned electrification and its authority over local gas distribution infrastructure in New York,” wrote regulators on the state Public Service Commission (PSC) in a June 12 friend of the court brief.
The National League of Cities, which represents over 19,000 cities in 49 states, told the 9th Circuit in a separate brief that the April ruling would create “significant uncertainty about [local governments’] lawful authority over natural gas distribution.” The group’s brief was also signed by the California State Association of Counties and the League of California Cities.
The legal briefs reveal how the April ruling could impact natural gas restrictions throughout the country. While the 9th Circuit only considers appeals from the nine Western states, it received briefs from city and state officials who live far outside the court’s jurisdiction.
And already, gas utilities and homebuilder groups have filed two lawsuits against the Washington State Building Code Council over new codes that require electric heat pumps in many new buildings.
Attorneys general representing 10 states, the District of Columbia and New York City cited those lawsuits in their own brief supporting Berkeley’s rehearing request.
“More are sure to come absent this Court’s intervention,” they predicted, while criticizing the 9th Circuit’s ruling.
Among the brief’s signatories were attorneys general from Massachusetts, New Jersey, New Mexico, and Maryland, which lie outside of the 9th Circuit. The remaining state attorneys general were from California, Arizona, Hawaii, Oregon, and Washington.
American Pacific Mining begins 9,000-metre drill program in Alaska
Jon Brown, The Market Herald/Stockhouse, June 19, 2023
American Pacific Mining (CSE: USGD) has begun its drill program at the Palmer Project in Alaska.
The Palmer Project is an advanced-stage, high-grade volcanogenic massive sulphide-sulphate deposit in the Porcupine Mining District of the Haines Borough.
The 9,000-metre resource infill drill program at the Southwall Zone is designed to begin the process of upgrading mineral resources from “inferred” to “measured and indicated.” The Palmer deposit is host to an indicated mineral resource of 4.68 million tonnes grading 5.23 per cent zinc, 1.49 per cent copper, 30.8 grams per tonne (g/t) silver, 0.30 g/t gold; and inferred mineral resource of 5.34 million tonnes grading 5.20 per cent zinc, 0.96 per cent copper, 29.2 g/t silver, 0.28 g/t gold.
“Our drill program this year has been designed with two primary goals: to delineate the high-grade portion of the deposit to further define the mineral resource estimation methodology as we look to convert mineral resources into mineral reserves in future feasibility studies; and to expand our mineral resource base with step-out and directional drilling in the Southwall Zone,” Peter Mercer, American Pacific’s Senior Vice President, Advanced Projects, said in a news release. “This year’s programs will lay the foundation for the engineering and evaluation work ahead. In addition, the knowledge gained from these programs will provide new insights into the potential for new high-grade discoveries throughout the mineralized district.”
The company’s joint venture partner, Dowa Metals & Mining Co. Ltd. has committed to fund the US$25.5 million 2023 program.
American Pacific Mining is a gold exploration company focused on precious metal opportunities in the western United States. The company recently acquired all of the issued and outstanding common shares of Constantine Metal Resources Ltd. The combined exploration and development company will boast two projects in the western United States being aggressively advanced under strategic partnerships with major metal producers and an expanded portfolio of prospective precious and base metals assets.
Peltola Breaks with Dems, Supports Alaskan Residents Regarding Gas Stoves
Power the Future, June 16, 2023
Congresswoman Mary Peltola (D-AK) hasn’t always made votes that Power The Future would say are pro-energy and pro-Alaska in nature since arriving in Congress last September, following her election victory to replace the late (great!) Don Young. In fact, we’ve disagreed with more votes than we’ve thought were positive for her state.
So, when Peltola shrugged off Democrat-led efforts to fight legislation aimed at curbing the ongoing attack against gas stoves and voted “yes” to support the bill, it got our attention. Not only for the vote itself, but because, with that vote, Peltola shows she understands the role natural gas plays throughout the state.
With over a hundred trillion cubic feet of natural gas on the slope, a LNG pipeline being backed by the Biden administration and natural gas being the leading source of heat for the majority of Alaskans, attacking natural gas makes little practical – nor political – sense in Alaska.
The Anchorage Daily News quoted Peltola, saying she backed the bills “because access to gas and propane-compatible stoves is important to Alaskans” and cited worries that the gas stove regulations could increase Alaskans’ energy costs. She further added, “Government has more important things to focus on than our kitchens.”
We couldn’t agree with her more on that sentiment. The eco-left’s obsession with taking away individual freedoms in the name of a made-up ‘climate crisis’ is despicable, so it is always refreshing when Congress rises up and says “enough.” Kudos to the 248 members – including Peltola – who stood up for Americans and against government overreach this week.