Today’s Key Takeaways: Shark Tank Investor Believes in US Energy Independence. Biden administration renews support for AKLNG. G7 shows tepid support for LNG. Australia to double lithium production by 2028. Lobbying intensifies with EV announcements.
NEWS OF THE DAY:
O’Leary Looks For A U.S. State To Host His $14 Billion Refinery
Tsvetana Paraskova, OilPrice.Com, April 15, 2023
- Kevin O’Leary: the U.S. needs another refinery to become more energy independent.
- The U.S. has been losing refining capacity in recent years.
- While U.S. refining capacity is shrinking, China and the Middle East are adding more capacity.
Shark Tank investor Kevin O’Leary has just announced plans to build a new $14-billion refinery in the United States to help America become more energy independent.
The U.S. needs a new refinery as it would not be weaning off fossil fuels for decades to come, the chairman of O’Leary Ventures told FOXBusiness this week.
“Unfortunately, no matter how much you think we’re getting off hydrocarbons, it’s not going to happen for 50 years,” O’Leary said on The Big Money Show, revealing for the first time plans to work on getting a permit and syndicating the funding for a new refinery expected to cost $14 billion.
Referring to the need for hydrocarbons for decades, he added, “I’m sorry, that’s just the way it is. You are not going to have a wind aircraft take you across the ocean, that’s not going to work.”
Biden Administration Renews Green Light for Alaska LNG Project
Malte Humpert, High North News, April 17, 2023
As part of an ongoing global push to produce and export more liquified natural gas (LNG), the US government renewed its approval of the proposed Alaska LNG facility.
The project, overseen by the Alaska Gasline Development Corporation, pitches the construction of a 1,300km pipeline from Alaska’s North Slope to deliver natural gas to a future liquefaction terminal on the Kenai peninsula.
There the natural gas would be turned into liquefied natural gas before exporting it to customers, primarily in Asia, via LNG tankers. The approval by the Biden administration relates to the issue of exporting LNG to countries the US does not have free trade agreements with. This would apply to most countries in Asia.
Unlike LNG produced in Russia’s Arctic, which has to travel thousands of kilometers on ice-capable tankers along the frozen waters of the Northern Sea Route, Alaska LNG would not encounter any ice-infested waters. Nonetheless, the economics of the project remain uncertain and no investment decision has yet been made.
The G7’s Uneasy Support For Gas
Ben Geman, Axios, April 17, 2023
One awkward, endless sentence in a new joint statement from Group of Seven energy ministers shows how natural gas sits uneasily at the intersection of resource security and climate policies.
Driving the news: The gas section of the G7’s communique notes Russia’s invasion of Ukraine has intensified competition for supplies, and that high prices hurt economies and vulnerable people.
The intrigue: The statement — issued after a weekend meeting in Sapporo, Japan — then drops an 81-word (!) sentence that makes all these points at once, and more:
- Accelerating clean energy is a huge priority.
- Gas demand should be cut, but supply investment “can be appropriate to help address potential market shortfalls provoked by the crisis.”
- But investment should be “subject to clearly defined national circumstances,” mindful of climate change, and avoid “creating lock-in effects” (code for unnecessarily prolonging use).
Why it matters: It reflects wider tensions over how to ensure adequate supplies, even as meeting Paris Agreement goals requires rapidly shifting away from fossil fuels.
Between the lines: Reuters reported an earlier draft contained language wanted by Japanese officials that supported “necessary upstream investments in LNG and natural gas.”
🖼️ The big picture: Nobody knows the future of global demand, which makes things tricky for investors and policymakers.
- Making things dicier still: Expensive and scarce gas could prolong coal use in Asian economies.
🔍 Zoom in: The International Energy Agency projects that under nations’ existing policies, demand will rise slightly this decade, then will plateau through 2050.
- But if nations’ current climate pledges are met, demand would be 10% lower in 2030, and 40% lower in 2050. Some investment is needed to offset declines in existing fields.
What they’re saying: A new IEA report for the G7 says the range of futures creates a “key dilemma” for investors considering expensive LNG projects.
Could Lithium Become A More Lucrative Alternative To Fossil Fuels?
Felicity Chambers, OilPrice.Com, April 16, 2023
- Global demand for lithium, copper and zinc is increasing rapidly due to the shift towards green energy.
- Australia, with significant lithium reserves, is turning its attention to mining this mineral for economic prosperity and to reduce reliance on fossil fuels.
- Australia’s lithium production is expected to double by 2027-28, with revenues tripling, potentially overtaking the South American Lithium Triangle development to become the world’s biggest producer.
While the world is still relying heavily on fossil fuels, and the revenues they bring in, as green energy becomes more widespread, we can expect a new range of high-cost energy projects that could earn countries billions. The global demand for metals and minerals has been on the rise for years and is continuing to climb rapidly –too fast, in fact, for mining activities to keep up. As the need for these resources becomes greater as the world undergoes a green transition, the price of minerals, such as lithium, and metals, such as copper and zinc, are expected to soar. And this could be just the incentive that is needed to turn efforts away from fossil fuels to greener alternatives.
Australia, which still relies heavily on coal mining for its economic prosperity and energy security, is beginning to turn its attention to lithium. With extensive mining experience and huge lithium reserves, Australia could play a major role in the green transition and make good money while doing it. Chile and Australia are home to the largest lithium reserves in the world, with 9.2 million metric tonnes and 5.7 million metric tonnes of lithium respectively. And while Chile has the bigger reserves, Australia is already exploiting its mining potential successfully, with a lithium output of around 68,450 metric tonnes in 2022 compared to Chile’s 26,000 tonnes output.
Biden’s electric car push sparks lobbying surge
Timothy Cama, Hannah Northey, Politico, April 17, 2023
The Biden administration’s climate change agenda has spurred a lobbying boom driven by mineral and battery companies seeking a share of billions in federal incentives.
More than 30 of those companies retained lobbying firms for the first time since President Joe Biden took office, POLITICO’s E&E News found through an analysis of disclosure records. Other companies and industry groups have boosted their lobbying staffs or spending.
READ MORE Refinery. Australian Doubles Lithium Production.