Survey Says:  Energy Policy Matters – Increase Domestic Production.

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Today’s Key Takeaways: EPA regulatory decision in Permian will affect gas prices. Russia takes stock in Arctic oil field. EU to curb gas consumption. 71% of voters want government to boost domestic energy production. Chilean copper miner secures options on Alaska copper-gold project.


Industry: Permian Basin ozone plan will affect gas prices
Sean Reilly, Greenwire, July 26, 2022

As EPA mulls a regulatory decision regarding air quality in the nation’s largest oil-producing region, industry groups are already angling to frame the issue in terms of gas prices and are mobilizing to push the White House to consider the impact at the pump.

EPA regulators have yet to unveil a proposal to flunk all or part of the Permian Basin for compliance with the agency’s latest smog standard, but the oil and gas industry is preemptively pressing for White House scrutiny as a “significant regulatory action” that could affect gasoline prices.

Such Clean Air Act “nonattainment” designations are customarily exempt from review by the White House Office of Information and Regulatory Affairs. “This action, however, is different in that it is a discretionary redesignation,” the American Petroleum Institute and a half-dozen other groups wrote in a publicly released letter late last week.

And while EPA’s latest rulemaking roster lists it as “nonsignificant,” they wrote, “we believe such a classification is inappropriate as this action is likely to be economically significant.” As grounds for that claim, the groups say that a redesignation would affect U.S. Treasury receipts because of the impact on oil and gas production and also conflict with President Joe Biden’s statement earlier this year to use “every tool at our disposal to protect” businesses and consumers from increased pump costs. While gas prices have fallen in recent weeks, they are still averaging about $4.35 per gallon, according to AAA, and are widely seen as a major political liability for Democrats in this year’s midterm congressional elections. Among other steps, deeming a proposednonattainment designation as “significant” could force EPA to assess the possible costs and benefits.

The industry letter is addressed to Shalanda Young, director of the Office of Management and Budget, which includes OIRA. An OMB spokesperson had no comment. An API spokesperson did not respond to an emailed question about the letter’s timing. The Permian Basin, which covers a 75,000-square-mile swath of West Texas and southeastern New Mexico, accounts for almost 40 percent of U.S. oil production, according to Texas regulators.

Smog is mostly made up of ground-level ozone, a lung irritant linked to asthma attacks in children that is in turn formed by the reaction of volatile organic compounds and nitrogen oxides in sunshine. Oil and gas operations spawn both classes of pollutants; under a move by EPA to deem all or part of the basin out of compliance with its 2015 ozone standard, producers could have to install “costly” pollution controls and face permitting delays, the letter said.

Currently, the region meets the 70 parts per billion limit, according to EPA listings made during former President Donald Trump’s administration. The possibility of a reclassification first surfaced last month with the rulemaking roster’s release (E&E News PM, June 24). While the agency at that point indicated that a formal notice could be coming shortly, this fall appears more likely, said Jeremy Nichols, climate and energy director for WildEarth Guardians, a Western environmental group that last year petitioned EPA to declare four New Mexico counties in nonattainment with the 70 ppb limit. While the Texas portion of the basin has no ozone trackers, monitoring on the New Mexico side is still showing violations, Nichols said.

Should EPA move forward, the process would kick off with a letter to governors of the affected states seeking feedback on the redesignation and the potential boundaries of any nonattainment area, an agency spokesperson said in a Friday email, adding that a final decision would be at least eight months away.

But even the possibility has already triggered opposition from Texas Gov. Greg Abbott (R), who urged Biden in a letter last month to halt any move in that direction by the end of this week (E&E News PM, June 27).

Under a Clinton-era executive order, a significant regulatory action could be one that carries a minimum economic impact of $100 million or raises “novel legal or policy issues.” For any proposed rule falling in that category, EPA and other agencies are supposed to provide an analysis of the possible costs and benefits, and “to the extent permitted by law,” an explanation of how it promotes the president’s priorities.

Determining whether a regulatory proposal is “significant” is a decision made within the executive branch, Cary Coglianese, a University of Pennsylvania law professor, said in an email. While the process typically involves communications between career staff at OIRA and agency employees, political appointees may also be pulled in, Coglianese said, and “rules can be classified as significant for even the most unspecified grounds.”

“One former OIRA Administrator has told me that what counts as ‘novel’ is whatever the administrator thinks it is,” he added. By going public with a disagreement over a significance determination, Coglianese said, a lobbying group can bring the issue to the attention of Congress, the news media, and officials elsewhere in the executive branch.

“For interest groups, activating others can sometimes be advantageous for purposes of trying to influence regulatory decisions.”

Along with API, the letter’s signers are the American Exploration and Production Council, Energy Workforce and Technology Council, GPA Midstream Association, Independent Petroleum Association of American, Permian Basin Petroleum Association, and Texas Oil and Gas Association.


Russia taking over ownership stakes in Arctic oil field
Associated Press, July 26, 2022

Russia has announced it is acquiring the stock in an Arctic oil field now held by French and Norwegian companies

Russia announced further moves Tuesday to take over foreign ownership stakes in energy projects, saying it would acquire the stock in an Arctic oil field now held by French and Norwegian companies.

The Russian government said it approved a proposal for the Russian oil firm Zarubezhneft to acquire the stakes of TotalEnergies of France and Equinor of Norway in the Kharyaga project in the Arctic. The move gives Zarubezhneft 90% of the project’s shares, and the balance are held by another Russian company.

The Kharyaga oil project is operated under a product-sharing agreement, with Zarubezhneft serving as operator. Financial terms and other details of the transactions weren’t disclosed.

The acquisition is part of a divestment trend following foreign companies saying they would exit the Russian market because of the country’s military action in Ukraine.

On June 30, Russian President Vladimir Putin signed a decree handing full control over a major oil and natural gas project partly owned by Shell and two Japanese companies to a newly created Russian firm.

The new company takes over ownership of the Sakhalin Energy Investment Co., which was nearly 50% controlled by British energy giant Shell and Japan-based Mitsui and Mitsubishi.


EU agrees to curb gas consumption
Erin Doherty, Axios, July 26, 2022

European Union countries on Tuesday approved a plan to curb their natural gas consumption this winter in preparation of expected supply cuts by Russia.

Driving the news: EU energy ministers approved a proposal to reduce 15% of gas from August to March.

The big picture: The proposal comes as EU countries are facing reduced gas supply from Russia, after Russia’s Gazprom said this week, it will halt another turbine engine in the Nord Stream 1 pipeline.

  • The halt, which will reduce natural gas flows to only 20% of the pipeline’s capacity, comes just days after Gazprom resumed sending gas to Europe after a 10-day shutdown for maintenance, Axios’ Jacob Knutson reports.
  • Russia is Europe’s largest gas supplier, so EU energy ministers are encouraging countries to brace for limited supplies as Russia continues its unprovoked invasion of Ukraine.

Between the lines: The proposal, which did not require unanimity to pass, gained the support from all 27 member states except Hungary, the New York Times notes.

What they’re saying: “Today, the E.U. has taken a decisive step to face down the threat of a full gas disruption by Putin,” European Commission president Ursula von der Leyen said in a statement.

  • “By acting together to reduce the demand for gas, taking into account all the relevant national specificities, the EU has secured the strong foundations for the indispensable solidarity between member states in the face of the Putin’s energy blackmail,” she said.


Antofagasta options Alaska copper project
Shane Lasley, North of 60 Mining News, July 20, 2022

Agrees to invest $30M to explore Tanacross over eight years

Chilean copper miner Antofagasta PLC has entered into an option agreement with Kenorland Minerals Ltd. to earn a 70% interest in Tanacross by investing US$30 million in exploration over eight years and publishing an NI 43-101-compliant preliminary economic assessment on the porphyry copper-gold project in eastern Alaska.

“We’re very excited to be working with Antofagasta on the Tanacross Project,” said Kenorland Minerals CEO Zach Flood. “The property, which covers numerous mineralised systems and target areas, warrants significant exploration to unlock the discovery potential that we believe exists.”

Five decades in the making

Lying alongside the Alaska-Yukon border, the 113,400-acre Kenorland property hosts world-class porphyry copper-gold deposit potential.

“Geologically speaking, the property has the right ingredients to host a significant mineral deposit – it sits on the intersection of two major crustal structures, has a large geophysical and geochemical expression, and the mineralized intrusions are the right age,” Flood told Mining News in 2018.

One of the major crustal structures at Tanacross, the Big Creek Fault, is also a major feature of Western Copper and Gold‘s world-class Casino porphyry deposit in the Yukon.

Situated about 90 miles southeast of Tanacross, Casino hosts 1.22 billion metric tons of reserves containing 5.1 billion pounds of copper, 8.5 million ounces of gold, 64.9 million oz silver, and 572 million lb of molybdenum.

Like Casino, Tanacross is located at the intersection of a second major structure intersecting the Big Creek fault.

Since the discovery of the East Taurus deposit in 1971, 17,076 meters of drilling in 67 holes have been completed at Tanacross.



Energy Policy Matters: Voters Trust GOP More on Issue
Rasmussen Reports, July 25, 2022

With gasoline prices still near an all-time high, voters want the government to boost domestic production, and trust Republicans more than Democrats by more than 2-to-1 on the issue.

A new national telephone and online survey by Rasmussen Reports finds that 71% of Likely U.S. voters believe the U.S. government should encourage increased oil and gas production to reduce America’s dependence on foreign sources of oil and gas. Only 19% oppose a policy of encouraging U.S. energy independence, while 10% are not sure. These findings are nearly unchanged since March. (To see survey question wording, click here.)

Fifty-three percent (53%) of voters’ trust Republicans more to encourage U.S. oil and gas production, compared to just 24% who trust Democrats more. Another 18% think there is not much difference between the two parties on this issue.

Eighty-six percent (86%) of voters believe energy policy will be important in this year’s congressional elections, including 59% who say it will be Very Important. This finding also has barely changed since March.

The survey of 1,000 U.S. Likely Voters was conducted on July 18-19, 2022, by Rasmussen Reports. The margin of sampling error is +/- 3 percentage points with a 95% level of confidence. Field work for all Rasmussen Reports surveys is conducted by Pulse Opinion Research, LLC. See methodology.

Majorities across party lines – 85% of Republicans, 61% of Democrats and 68% of voters not affiliated with either major party – believe the U.S. government should encourage increased oil and gas production to reduce America’s dependence on foreign sources of oil and gas. Similarly, 71% of Republicans, 51% of Democrats and 56% of unaffiliated voters believe energy policy will be Very Important in this year’s congressional elections.

While 51% of Democratic voters trust their party more to encourage U.S. oil and gas production, only six percent (6%) of Republicans and 14% of unaffiliated voters share that opinion. Eighty-four percent (84%) of Republicans and 57% of unaffiliated voters trust Republicans more to encourage U.S. oil and gas production, and even 21% of Democratic voters agree.

Majorities of every racial category – 72% of whites, 64% of Black voters and 73% of other minorities – think the government should boost U.S. oil and gas production. Black voters trust Democrats more to encourage U.S. energy independence by a 42%-38% margin, while a majority (57%) of whites’ trust Republicans more and other minorities trust Republicans more by a 49%-30% margin.

More men (76%) than women voters (66%) believe the U.S. government should encourage increased oil and gas production to reduce America’s dependence on foreign sources. While men overwhelmingly trust Republicans (61%) more than Democrats (24%), the margin is only 46%-25% among women voters.

While a solid majority of voters 40 and older trust Republicans more than Democrats to encourage U.S. oil and gas production, the margin among voters under 40 is just 44% for Republicans to 33% for Democrats. Voters 40 and older are also significantly more likely to say energy policy will be Very Important in this year’s congressional elections.

Far more private sector workers (59%) than government employees (31%) trust Republicans more to encourage U.S. oil and gas production. 

Voters with annual incomes below $100,000 are most likely to think the government should encourage increased U.S. oil and gas production.

Among voters who believe the government should encourage domestic energy production, 65% trust Republicans more to promote such a policy.

Media rumors suggest Hillary Clinton may be planning a comeback, but voters overwhelmingly don’t want her to make another White House run in 2024.

The 2022 midterm elections are now less than four months away, and Republicans have a 10-point lead in their bid to recapture control of Congress.