Today’s Key Takeaways: Finland pipeline sabotage – NATO response? Reshaping U.S. oil industry. 27-year LNG deal for Qatar and France. Mineral Security Partnership announces projects to strengthen critical mineral supply chains. House speaker candidates and their energy policy.
NEWS OF THE DAY:
Finland Pipeline Sabotage Proof Would Draw NATO Response
Natalia Drozdiak, Ott Tammik, Kati Pohjanpalo, Bloomberg News, October 11, 2023
NATO Secretary General Jens Stoltenberg cautioned that any deliberate damage to the alliance’s critical infrastructure would warrant a response after an undersea gas pipeline was ruptured in a suspected act of sabotage in Finland.
As the newest member of the North Atlantic Treaty Organization investigates what caused the damage, Stoltenberg said that defense ministers will discuss the topic during a meeting in Brussels.
“The important thing now is to establish what happened and how this could happen,” Stoltenberg told reporters Wednesday. “If it is proven to be a deliberate attack on NATO critical infrastructure, then this will be serious but will also be met by a united and determined response from NATO.”
The gas pipeline connecting Finland and Estonia, another NATO member that also borders on Russia, started leaking at the weekend, and people familiar with the matter said on Tuesday the investigation is proceeding on the basis that it was sabotage. Finnish Prime Minister Petteri Orpo told reporters that it was caused by an “external source” as he declined to speculate who may be responsible.
Russian President Vladimir Putin’s spokesman Dmitry Peskov called the report on damage of the pipeline “alarming news,” adding the Kremlin is waiting for further details, according to the state-run Tass newswire. He was also cited as saying that the explosions that damaged the nearby Nord Stream pipeline almost one year ago have set “dangerous precedents” in the Baltic Sea.
Estonian Prime Minister Kaja Kallas said she isn’t ruling out Russia’s involvement until the investigation is concluded, speaking in interview with local news publication Delfi. If that were proven, NATO “would start Article 4 consultations,” she said, referring to a clause in the bloc’s founding treaty on talks initiated by any member that feels their territorial integrity or security is threatened.
The Balticconnector pipeline that was damaged in the early hours of Sunday is ruptured on one side and dragged out of place, according to Estonian military officials.
“Something has dragged this pipe from one side to the other,” Estonian Navy Commander Juri Saska told public broadcaster ERR Tuesday night.
Exxon to buy Pioneer for $59.5B, reshaping U.S. oil industry
Dan Primack, Ben Geman, Axios, October 11, 2023
ExxonMobil announced Wednesday it will buy U.S. shale driller Pioneer Natural Resources for $59.5 billion in stock.
- It also could produce an antitrust face-off with a White House that’s already at odds with Big Oil.
By the numbers: The merger would more than double Exxon’s production in the Permian Basin to 1.3 million barrels of oil-equivalent per day, with expected growth to 2 million daily in 2027.
- The tie-up will merge Pioneer’s 850,000 acres in the Permian with Exxon’s 570,000 acres.
- The proposed deal is a $59.5 billion all-stock merger at $253-per-share that rises to a value of $64.5 billion once debt is included.
The bottom line: Exxon buying Pioneer would be an audacious move in a proven region, enabled by strong balance sheets after the oil price run-up in recent years.
- If completed, it’s the biggest step yet in ongoing consolidation of the shale patch.
Qatar Signs 27-Year Deal To Supply France With LNG
Tsvetana Paraskova, OilPrice.Com, October 11, 2023
QatarEnergy and TotalEnergies have signed two long-term LNG agreements under which Qatar will supply up to 3.5 million tons per year of LNG to France for 27 years beginning in 2026, Qatar’s state giant said on Wednesday.
TotalEnergies is a minority partner in Qatar’s huge LNG expansion projects North Field East (NFE) and North Field South (NFS), from which the volumes to be delivered to France will be sourced. TotalEnergies’ partnership in the expansion projects is made up of a 6.25% share in the NFE project and a 9.375% interest in the NFS project.
The LNG will be delivered on an ex-ship basis to the Fos Cavaou LNG receiving terminal in southern France.
Today, the partners of the Minerals Security Partnership (MSP) held a principals’ meeting in London, the world capital of mining and metals finance, on the margins of London Metal Exchange (LME) Week 2023. The theme of the meeting was responsible investment in critical minerals, with the key objective to strengthen collaboration between the MSP, like-minded partners, and the global financial community. Nusrat Ghani, Minister of State for Business and Trade of the United Kingdom, and Jose W. Fernandez, U.S. Under Secretary of State for Economic Growth, Energy, and the Environment, co-chaired the meeting.
At the meeting, the MSP partners confirmed they are working to advance the following projects that have a high potential to contribute to the development of responsible critical mineral supply chains, demonstrate high ESG standards, facilitate the global energy transition, and are collaborating with relevant governmental or financial agencies of MSP partners:
- Eleven projects in upstream mining and mineral extraction, four projects in midstream minerals processing, and two projects in recycling and recovery;
- One project focusing primarily on lithium; three on graphite; two on nickel; one on cobalt; one on manganese; two on copper; and seven on rare earth elements;
- Five projects in the Americas, seven projects in Africa, three projects in Europe, and two projects in Asia-Pacific.
SPEAKER CANDIDATES ON ENERGY POLICY: All eyes are on House Republicans as the caucus holds a candidate forum on Tuesday and an internal election on Wednesday for the speakership. The power dynamics of new leadership will eventually shape how critical issues are tackled this Congress, such as permitting reform.
Here are the potential candidates, and what they have to offer on the issue of energy:
Steve Scalise: Representing the 1st district in Louisiana, the majority leader hails from a state that is ranked third in natural gas production and fifth in natural gas reserves in the U.S. Within his district alone, the Port Fourchon service base houses over 95% of the Gulf of Mexico’s deepwater energy production and is the main facility transporting supplies and people to offshore locations within the state. The port is critical to the local and national economy, having connection to 50% of the U.S.’s refining capacity.
Scalise’s ties to the oil and gas industry are clear through his campaign contributions. Dating back to 1999 during his time in the Louisiana House of Representatives, he’s received more than $2.2 million from the industry, according to OpenSecrets.
The majority leader was also the lead on House Republicans’ sprawling energy package that passed the lower chamber earlier this year in March. Dubbed H.R. 1, the legislation would boost the production of fossil fuels and undo virtually all of President Joe Biden’s agenda to address climate change. The legislation, however, was stalled in the Democratic-controlled Senate.
Furthermore, the majority leader launched the House Energy Action Team in 2019 – a messaging board for GOP leadership on conservative environmental policy.
Jim Jordan: The Ohio Republican who’s competing against Scalise for the job isn’t a major player in the energy space – but has used his position as chair of the House Judiciary Committee to probe financial firms on their environmental, social, and governance goals and policies. Back in December 2022, the committee launched an investigation into Climate Action 100+ – an investor-led initiative that aims to hold the largest corporate greenhouse gas emitters accountable on climate change – calling it a “climate-obsessed corporate ‘cartel.’”
A founding member of the House Freedom Caucus, Jordan stands as a powerful member of the right flank that has often opted to elevate the cultural-war issues of energy and climate politics. During a 2019 Oversight Committee hearing on climate change, Jordan railed against the Democrats’ Green New Deal agenda, calling it “devastating for middle class families in all our districts.” When former President Donald Trump pulled out of the Paris climate accords, the Ohio Republican hailed the move, calling it “another government regulation restricting our economy’s ability to grow.”
The difference between the two approaches? Frank Maisano, a senior principal at the strategic communications firm Bracewell LLP, underlined Scalise’s industry knowledge and how that informs his approach towards the sector, versus Jordan’s method of elevating the fossil fuel industry through “consumer-driven culture issues that the administration is trying to impose on consumers.”
“I happen to think that a substantive voice is better because it understands the issues and the nuances of the issues better,” Maisano told the Washington Examiner in an interview. “And that doesn’t mean that the culture issues aren’t important.”
Kevin McCarthy (?): The former speaker is not formally putting his hat back into the ring to reclaim his position as leader of the conference – but isn’t ruling out the option if his colleagues nominate him to the position.
Taking a look at McCarthy’s record on climate, the former GOP leader has led his conference in blocking various Democratic efforts to address the issue of climate change. He worked to delay passage of Democrats’ sweeping climate bill, filibustering the legislation for more than 8 hours in November 2021. He has also joined Republicans in railing against the oppositional party’s “radical climate agenda,” arguing it gives a pass to China to pollute and punishes the American economy.
But the California Republican also has a conservationist side that leans to the left of some of his colleagues, creating a conservative policy platform that acknowledges the realities of climate change without forcing his members to distance themselves from fossil fuels. In 2021, McCarthy created a climate change task force that was tasked with devising a policy agenda to address global warming – but would also tie rising gas prices to Democratic efforts and set the basis of H.R. 1.
Furthermore, McCarthy is big on planting trees to sequester carbon, introducing the “Trillion Trees Act” with Republican Natural Resources Chair Bruce Westerman of Arkansas. He has also introduced his own bill, the “Save Our Sequoias Act” that would allow agencies to take further emergency actions and protect the large Californian trees from burning up in massive wildfires. The bills never made it to the floor, however.
From the Washington Examiner, Daily on Energy