Support for West Su Road.   EV’s Over ICE Cars Won’t Reduce Crude Oil Demand.

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Today’s Key Takeaways:  60% of residents surveyed favor the West Su Access Project. Oil hits 2023 high on tighter supplies. China invests in LNG for energy security. Who will finance mining projects needed for energy transition? Biden’s “mandates over markets” EV policies will not reduce crude oil demand.


Survey Says:  Mat-Su Residents Favor West Susitna Access Road
Tim Bradner, The Frontiersman, April 11, 2023

A new survey of Matanuska-Susitna Borough residents shows 60 percent in favor of the proposed West Susitna Access Project, a 100-mile access road built into the undeveloped western part of the borough west of the Sustina River.

Twenty nine percent of those polled said they oppose the road, according to the survey results. Friends of West Susitna, a support group, commissioned the poll, which was done by Dittman Research.

Three hundred and thirty-four Mat-Su residents were asked about their opinions between Feb. 2 and Feb. 7, said Cindi Herman, who is chair of Friends of West Susitna’s board.

While a majority of those polled favored the road, 60 percent also said they hadn’t heard of it, while 22 percent said they had heard some, Another 11 percent said they had heard some about the road, but “not a lot.” However, seven percent said they had heard, “a lot.”

“Friends of West Susitna commissioned the survey to gain an accurate idea of what Borough residents think about the proposed West Susitna Access Project, a development that would construct a two-lane, 100-mile unpaved road near Wasilla into the West Susitna area,” Friends of West Susitna in an April 10 press release.

“The project would provide public access to fishing, hunting, recreation, agriculture, and resource development, most of which is currently accessible only by small, private aircraft or watercraft.”

It would also improve access to natural resource development in the region. Nova Minerals, an Australian minerals exploration company, is testing two gold deposits near the western terminus of the road west of Skewentna.

While 60 percent favored the road in the survey 84 percent favored the state of Alaska investing in infrastructure and economic development projects. The West Susitna road, at this point, is being sponsored by the Alaska Industrial Development and Export Authority, or AIDEA, the state’s development finance corporation.



Oil Rises to 2023 High on Mounting Signs of Tighter Supplies
Julie Fanzeres, Yahoo! Finance, April 12, 2023

Oil rose to the highest intraday price this year as slowing flows from Russia, production cuts by OPEC+ and falling US inventories pointed to a tightening market.

West Texas Intermediate rallied above $82 a barrel, bolstered by a broader relief rally triggered by signs of moderating US inflation. Russian shipments slid below 3 million barrels a day for the first time in eight weeks, after Moscow vowed to cut production. And, in the US, oil inventories at the key Cushing, Oklahoma, storage hub slid for a sixth week to hover near the lowest since January.

Oil prices are likely to “move a bit higher from here as a result,” said Rob Thummel, a portfolio manager at Tortoise Capital Advisors.

Crude has rebounded from the 15-month low seen in March, after the Organization of Petroleum Exporting Countries and its allies cut output. Traders are also sticking to the view that Chinese demand will pick up. In the Middle East, pipeline flows from Iraq’s semi-autonomous Kurdistan region remain halted.

The commodity’s strength is also reflected in measures tracking the oil market’s structure. WTI’s prompt spread — the difference between its two nearest contracts — is trading near 9 cents in backwardation, the highest this year on a closing basis.


China Invests in Qatar LNG Plant in Energy Security Push
Walid Ahmed and Stephen Stapczynski, Bloomberg, April 12, 2023

Sinopec has bought into a liquefied natural gas project in Qatar in a bid to bolster the energy security of China, the world’s second-largest buyer of the fuel.

At a signing ceremony in Doha, Sinopec — officially known as China Petroleum & Chemical Corp. — agreed to take a 5% stake in a train with a processing capacity of 8 million tons a year. It’s part of the North Field East LNG export project that’s under construction and is expected to begin shipping gas in 2026.

Cooperation with QatarEnergy will help “optimize China’s energy consumption structure and enhance the security, stability and reliability of clean energy supply,” Sinopec Chairman Ma Yongshen said at the event on Wednesday.

The investment marks the first time China has directly backed an LNG plant in Qatar, one of the world’s top exporters. It’s also the latest in a flurry of deals to lock-in gas supply for decades amid intensifying global competition for fuel, particularly between Europe and Asia. Japan is currently the world’s primary buyer of LNG.


Who Will Finance the Energy Transition’s Mining Projects?
Priscilla Barrera, Lithium Investing News, April 11, 2023

“The issue is that it seems to be easier to raise money if you’re building a gigafactory than if you are building a mine,” said Simon Moores of Benchmark Mineral Intelligence.

Lithium-ion batteries are at the forefront of the electric vehicle and energy storage revolution, and they’ve been attracting more attention as governments continue looking for ways to phase out fossil fuels in favor of greener energy sources.

As the platform technology for the energy transition, lithium-ion batteries feed into three core industries — electric vehicles, solar energy and wind energy — but the sector is also still being built from scratch, Benchmark Mineral Intelligence CEO Simon Moores said during a keynote at the Battery Gigafactories Europe event in March.

“When you look at the amount of critical minerals supply that goes into this one technology, there are five key critical minerals supply chains that have to be scaled: lithium, nickel, cobalt, graphite and manganese,” he said. “These are specialty chemicals — they are not just commodities, not just minerals. So that’s a challenge.”

According to Benchmark Mineral Intelligence data, there are 187 gigafactories active today, up from 144 just two months ago.

“187 gigafactories active with a total capacity of 1.7 terawatt hours … that cost US$150 billion to get to that level,” Moores said. “The issue is that it seems to be easier to raise money if you’re building a gigafactory than if you are building a mine.”

To reach net-zero goals by 2050, the industry will need to grow to a maximum of 20 terawatt hours.

“At a maximum of 20 terawatt hours, how much money will be needed? If we add battery cells, gigafactories, all the way up to the mine, it’s about US$5 trillion,” Moores said. “Sounds like a lot, but if you take the entire energy transition into account that will cost about US$100 trillion … 5 percent of the energy transition tab is lithium-ion batteries.”

For Moores, of the US$5 trillion that is needed, one-third should be allocated to battery capacity and two-thirds to the upstream.

“The money and the thinking needs a shift from the mid-low to mid-hundreds of millions (of dollars) into the early billions if we are to stay on track for this energy transition,” he told the audience in Budapest. “What we’re building today is just the start. It might feel like it’s a far cry from where we were five years ago, but actually it is just the start, and it is happening.”



Biden Looks To Boost EV Uptake With Strictest-Ever Vehicle Pollution Standards
Tsvetana Paraskova, OilPrice.Com, April 12, 2023

The U.S. Environmental Protection Agency (EPA) proposed on Wednesday the toughest-ever tailpipe emission standards for new cars and trucks, aiming to accelerate the adoption of electric vehicles to the point of EVs becoming a larger portion of new sales than conventional vehicles by 2032.

Depending on the compliance pathways manufacturers select to meet the proposed standards, EPA projects that EVs could account for 67% of new light-duty vehicle sales and 46% of new medium-duty vehicle sales for model year 2032.

The proposed MY 2032 light-duty standards are expected to result in a 56% reduction in projected fleet average greenhouse gas emissions target levels compared to the existing MY 2026 standards. The proposed MY 2032 medium-duty vehicle standards would result in a 44% reduction compared to MY 2026 standards, according to EPA’s proposal. 

The agency expects the proposals would reduce oil imports by approximately 20 billion barrels. Overall, EPA estimates that the benefits of the proposed standards would exceed costs by at least $1 trillion, the agency said.

“These ambitious standards are readily achievable thanks to President Biden’s Investing in America agenda, which is already driving historic progress to build more American-made electric cars and secure America’s global competitiveness,” said EPA Administrator Michael S. Regan.

The Alliance for Automotive Innovation has warned that a massive rollout of EVs will depend not only on automakers but also on the grid and charging infrastructure investments.

“A lot has to go right for this massive — and unprecedented — change in our automotive market and industrial base to succeed,” John Bozzella, head of the alliance, told Bloomberg.