Today’s Key Takeaways: Oil and gas industry drilling techniques can be used for geothermal. Oil price impacts on Alaska treasury. Coeur Alaska gives $100,000 to diesel and welding students in Southeast Alaska. Data Centers boost gas-fired power generation. Urgent call for Permitting Reform.
NEWS OF THE DAY:
INTERNATIONAL ENERGY AGENCY BACKS FRACKING TO HARNESS GEOTHERMAL ENERGY: Long-standing drilling techniques used by the oil and gas industry can also be used to harness enough geothermal energy to rival renewables like wind and solar, the International Energy Agency said.
The details: Today the intergovernmental organization released its latest report on the future of geothermal energy, finding that hydraulic fracturing and horizontal drilling – commonly used to extract oil and natural gas within the United States – could help make geothermal energy an “attractive” alternative resource worldwide.
Currently, geothermal energy only meets less than 1% of global energy demand, primarily in countries like the U.S., Iceland, Italy, Turkey, Indonesia, and Kenya. However, using techniques like fracking, the IEA said, the alternative source of energy could meet up to 15% of global demand by 2050. The agency said this could produce nearly 6,000 terawatt hours per year of power, roughly equivalent to the current demand of the U.S. and India combined.
A reminder: Fracking uses high pressure from a drill and perforating gun system to crack shale rock layers thousands of feet underground, where natural gas and oil can be found. A perforating gun is a device lowered into a deep well loaded with explosive charges to puncture cracks in the shale rock. Then, millions of gallons of water, chemicals, and sand are pumped into these open fissures in the shale. As the sand keeps these cracks open, the chemical and water mixture helps natural gas and oil to flow back to the surface.
In the case of geothermal energy, fracking could be used to circulate water beneath the earth’s crust, collecting heat from the rocks below and sending it up to the surface. The IEA has said up to 80% of the current investment required for geothermal projects already involves skills commonly found in the oil and gas industry, making it easy to transfer data, technologies, and supply chains.
“Diversifying into geothermal energy could be of great benefit to the oil and gas industry, providing opportunities to develop new business lines in the fast-growing clean energy economy, as well as a hedge against commercial risks arising from projected future declines in oil and gas demand,” IEA said.
From the Washington Examiner, Daily on Energy, December 13, 2024
OIL:
Lower prices dim expectations for Alaska oil earnings in coming years, revenue forecast says
Yereth Rosen, Alaska Beacon, December 12, 2024
North Slope production is expected to start rising in a few years, but revenues to the treasury will decline through the end of the decade, according to the state’s forecast
Alaska oil revenues are expected to decline over the next few years, helping create a budget deficit that will have to be filled in with state savings, according to a semiannual forecast released by the state Department of Revenue on Thursday.
The new forecast is more pessimistic about the state’s oil-money prospects over the next few years than the department’s previous forecast, released in March, noted Department of Revenue Commissioner Adam Crum.
“This is due to lower oil prices, as well as higher lease expenditures,” Crum said at a news conference held by Gov. Mike Dunleavy. Oil price estimates are based on the futures market, he said.
Oil production through the end of the 2020s decade will also likely be lower than what was expected in the department’s previous forecast, released last spring, “but there is an expected increase in production and revenues after that,” Crum said.
The new forecast predicts that North Slope oil production will average 466,600 barrels per day in the current fiscal year, which started on July 1, and rise slightly to 469,500 in the fiscal year after that. Average production for fiscal 2024, which ended on June 30, was 461,000 barrels per day.
Alaska North Slope production peaked in 1988 at over 2 million barrels per day.
GAS:
Chevron and Exxon Target Data Centers with Reliable Gas Power
Irina Slav, OilPrice.Com, December 14, 2024
- Oil majors are looking to increase their bets on gas-fired power generation.
- Big oil is scaling down investment in wind and solar power.
- Chevron is talking with generators that supply electricity to data center operators.
The supermajors are moving into power generation, tempted by forecasts of a looming surge in demand. Yet there is a twist: the temptation is natural gas generation. Wind and solar—typically described as green or clean power—are turning into a fiasco for Big Oil.
Chevron and Exxon both recently said they were planning to venture into the exciting—and quite profitable—field of electricity generation. Speaking at a Reuters event in New York, Chevron’s head of the New Energies division said that it has been in talks for the supply of natural gas to power generators for a year. But not just any power generators. Chevron is talking with generators that supply electricity to data center operators.
“It fits many of our capabilities – natural gas, construction, operations, and being able to provide customers with a low-carbon pathway on power through CCUS (carbon capture, utilization and storage), geothermal, and maybe some other technologies,” Jeff Gustavson said.
MINING:
Coeur is investing in SE Alaska students
Shane Lasley, North of 60 Mining News, December 11, 2024
Kensington gold mine owner commits $100,000 to support UAS diesel and welding programs for high schoolers.
Coeur Alaska Inc. has committed to investing $100,000 to cover tuition and fees for local high school students taking diesel and welding courses at the University of Alaska Southeast (UAS) School of Career and Technical Education in Juneau.
“We are excited to partner with UAS on this workforce development initiative,” said Steve Ball, general manager at Coeur Alaska’s Kensington gold mine about 45 miles north of Juneau. “By investing in local students, we are not only fostering their future success but also building a strong and sustainable workforce for Southeast Alaska’s mining industry and beyond.”
UAS says the commitment to cover tuition and fees for diesel and welding students through the spring semester of 2026 also significantly bolsters the sustainability of the Mining Pathways program, which is a collaboration between industry, UAS, and the Juneau School District to introduce students to the fields of power technology, environmental science, and geology.
“The support from Coeur Alaska significantly strengthens this program’s ability to inspire and prepare the next generation of mining professionals,” said University of Alaska Southeast Chancellor Aparna Palmer.
POLITICS:
Oil, Gas Groups Issue ‘Urgent Call’ to House Speaker
Andreas Exarheas, Rigzone, December 16, 2024
In a statement posted on its website, the Energy Workforce & Technology Council (EWTC) said a coalition of oil and gas trade associations “has issued an urgent call to House Speaker Mike Johnson for immediate action on permitting reform before the close of the 118th Congress”.
The coalition represents over 80 percent of U.S. domestic production, according to the statement, which revealed that the group comprises the EWTC, the Gulf Energy Alliance, the International Association of Drilling Contractors, the Independent Petroleum Association of America, the National Ocean Industries Association, the Texas Alliance of Energy Producers, the U.S. Oil & Gas Association, and the Western Energy Alliance.
“In a letter to Speaker Johnson, the coalition highlights an alarming trend: the average time for energy infrastructure projects to go from initial permitting to operation has more than doubled, from two years in 2000 to over five years in 2021,” the statement noted.
“This significant delay is deterring investment, impedes the nation’s ability to meet future energy demands, and jeopardizes national energy security,” it added.