Today’s Key- Oil is here to stay AND we can reduce its emissions. Sixty percent of Americans favor law that would increase oil and gas drilling in U.S. Is nuclear power an option for mines in the North? Alaska Congressional Candidate forum this Thursday – public invited.
NEWS OF THE DAY:
Voters More Worried About Gas Prices Than Climate Change
Rasmussen Reports, May 9, 2022
A majority of voters are concerned about rising energy costs and favor increased drilling for oil and gas, although most Democratic voters consider reducing climate change a higher priority.
A new national telephone and online survey by Rasmussen Reports and the Heartland Institute finds that 82% of Likely U.S. Voters are concerned about rising energy and gasoline prices, including 60% who are Very Concerned. Only 14% aren’t concerned about the rising price of energy. (To see survey question wording, click here.)
Sixty percent (60%) favor a law that would dramatically increase oil and gas drilling in the United States, including 47% who would Strongly Favor such a law. Thirty percent (30%) would oppose a law to increase drilling, while 11% are not sure.
Fifty-two percent (52%) of voters believe Congress and President Joe Biden should focus more on increasing oil and gas drilling to help reduce energy prices, but 34% think the policy focus should be more on limiting carbon dioxide emissions in an attempt to reduce climate change.
While 74% of Republicans and 54% of voters not affiliated with either major party believe increased oil and gas drilling should be the policy focus, 54% of Democratic voters want the president and Congress to focus more on reducing climate change.
“When push comes to shove, polls consistently show energy and economic security trump climate change for a majority of the public when asked which is more important,” said H. Sterling Burnett, director of Arthur B. Robinson Center on Climate and Environmental Policy at the Heartland Institute. “Oil and gas remain, for the foreseeable future, vital to maintaining our present standard of living and lifestyles and to ensure continued economic and national security. This Heartland/Rasmussen poll indicates the public understands that fundamental fact.”
The survey of 1,004 U.S. Likely Voters was conducted on April 28 and May 2, 2022, by Rasmussen Reports and the Heartland Institute. 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.
The survey finds that 50% of voters believe it’s likely that climate change will be catastrophic for humans, plants, and animals within the next 100 years, including 30% who think it is Very Likely climate change will have a catastrophic impact within a century. Forty-two percent (42%) don’t believe climate change is likely to be catastrophic within 100 years, including 24% who say such a catastrophe is Not at All Likely.
“Despite three decades of propagandizing, just 50 percent of those surveyed believe climate change poses a real threat to humans or the environment over the next 100 years,” Burnett said in a statement. “By contrast, a strong majority of Americans support government policies that would expand oil and gas production, regardless of climate change.”
Seventy-one percent (71%) of Democrats, but only 29% of Republicans and 49% of unaffiliated voters, consider it at least somewhat likely climate change will be catastrophic for humans, plants, and animals within the next 100 years. A majority (50%) of Democrats believe such a catastrophic impact from climate change is Very Likely within 100 years, but just nine percent (9%) of Republicans and 30% of unaffiliated voters share that belief.
Majorities of every political and racial category – 89% of Republicans, 77% of Democrats, 81% of unaffiliated voters, 84% of whites, 73% of Black voters, 79% of Hispanics, and 84% of other minorities – are at least somewhat concerned about rising energy and gasoline prices.
Majorities of every racial group – 62% of whites, 54% of Black voters, 57% of Hispanics, and 60% of other minorities – favor a law that would dramatically increase oil and gas drilling in the United States. Seventy-six percent (76%) of Republicans and 57% of unaffiliated voters also favor such a law, but only 46% of Democrats would favor a law dramatically increasing U.S. drilling.
Voters under 40 are more likely than older voters to believe climate change is likely to have a catastrophic impact within 100 years, while older voters are more in favor of increased U.S. oil and gas drilling.
More men (56%) than women voters (48%) think Congress and President Biden should focus more on increasing oil and gas drilling to help reduce energy prices.
Unmarried and childless voters are most likely to believe climate change is likely to have a catastrophic impact within 100 years.
Voters with annual incomes over $200,000 are less likely to think Congress and the president should focus more on increasing oil and gas drilling to help reduce energy prices.
President Biden’s strongest supporters are most concerned about climate change. Among voters who Strongly Approve of Biden’s job performance as president, 70% believe it is Very Likely that climate change will be catastrophic for humans, plants, and animals within the next 100 years. By contrast, among voters who Strongly Disapprove of Biden’s performance, only eight percent (8%) think such a catastrophic impact of climate change is Very Likely within the next century.
A majority of voters think President Biden shouldn’t seek reelection in 2024, and he would lose a rematch with former President Donald Trump by double-digit margins.
Most voters rate President Joe Biden poor for his handling of the economy, and say inflation will be a very important issue this fall in the midterm elections.
Additional information from this survey and a full demographic breakdown are available to the public as well as Platinum Members.
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OIL:
Oil Is Here To Stay, But We Can Reduce Its Emissions
Felicity Bradstock, OilPrice.Com, May 8, 2022
- If the recent energy crisis has taught us anything, it is that the world is not ready to give up fossil fuels, a fact that has made the low-carbon crude more important than ever.
- In order to reduce the emissions associated with oil production, companies are increasingly abandoning old projects and focusing on new discoveries.
- As well as turning to newer production to reduce emissions, oil companies are electrifying elements of production and investing in carbon capture and storage
Low-carbon oil seems pivotal to the future of fossil fuel production as it becomes clear that the world is still highly dependent on crude. Working to fill the gap left by Russia, countries and oil firms around the world are increasing their oil production and long-term output plans. But to achieve ambitious carbon emissions promises, low-carbon oil will be necessary. Several international oil majors have announced plans to shift their fossil fuel production to low-carbon oil, alongside natural gas, in the coming years as they strive to reduce carbon emissions without giving up on crude. Most of these low-carbon promises are based on new operations in regions with recent discoveries of huge reserves such as the Caribbean and Africa. Many are abandoning existing operations in countries with dwindling oil reserves in favor of new areas, where they can establish low-carbon production methods and incorporate carbon capture technology.
In April, Equinor announced plans to electrify offshore operations to produce low-carbon oil. It stated that the average offshore oil output produced around 15kg of carbon emissions per barrel in 2021. However, Equinor claims it can reduce its current 7kg of CO2 per barrel to just 6kg by 2030 by using electrification methods.
In its Johan Sverdrup field in western Norway, Equinor has constructed a cable to connect to the national power grid. The energy firm now has plans to lay another cable to electrify the field further as it expands, connecting oil platforms across the region to transmit power over long distances. It could eventually link to other oil fields in the region to dramatically reduce carbon emissions across its operations.
In Canada, President Trudeau is continually reiterating the government’s climate change promises while refusing to give up on oil. While this may seem contradictory to many, Canadian politicians insist that low-carbon oil production can be compatible with the country’s ambitious climate pledges. This could be particularly important as the world looks to Canada to fill the gap left in the market due to sanctions on Russia dramatically cutting the world’s oil supply.
In March, Canada achieved a record $13.6 billion from oil, natural gas, coal, and refined petroleum exports, supporting the country’s aim to maintain its fossil fuel output. Trudeau’s policy ambitions appear to have shifted in recent months in favor of a slow phase-out of fossil fuels, aiming to decarbonize the oil and gas industry instead of stopping production. At present, the Canadian government is aiming for a carbon emissions reduction of 42 percent in the oil and gas industry by 2030.
Environment Minister Steven Guilbeault stated at a parliamentary committee meeting this month, “Low-carbon oil is not a myth, it’s not an invention.” Suggesting the world will continue to need oil to meet its growing energy demands, and that it should at least be low-carbon oil that will still help to reduce the current level of carbon emissions.
Oil firms around the world have dramatically increased their investment in low-carbon oil operations over the last year in response to International Energy Agency and national governments’ aims to cut global carbon emissions to net zero by 2050. According to Offshore Energies UK (OEUK), energy companies are planning to invest almost $309 billion in low-carbon energy projects in the U.K. by the end of the decade. As well as renewable energy projects, this will also contribute to the introduction of several carbon capture technologies across oil and gas operations.
With oil and gas majors announcing their Q1 earnings this month, many thank their low-carbon operations for their continued profits. BP stated that it boosted production by launching several new projects in 2021 in its ‘gas & low carbon’ unit. Last year, Chevron announced a $300 million in low-carbon technologies, which it expects will support the longevity of its oil operations. Exxon announced $3 billion in carbon capture technologies (CCS) and American firm Occidental Petroleum said CCS is the core component aim of net-zero emissions by 2050.
However, the push for the introduction of low-carbon oil technologies by major energy firms hasn’t stopped many from accusing Big Oil of continuing to greenwash with big carbon-cutting promises. ClientEarth argues that while Shell says it will use “lower-carbon energy products to reduce GHG emissions,” it still plans to increase its fossil fuel business by 20 percent by 2030. Growing its operations, ClientEarth disputes, will inevitably be detrimental to the environment, suggesting that Shell and other major oil firms are overstating their low-carbon promises.
As the world demand for oil continues to increase, more low-carbon oil operations will be developed to meet governmental and energy firm climate promises without giving up on crude. While some suggest this is not a positive contributor to the clean energy transition, the continued reliance on fossil fuels worldwide means it may be a necessary evil.
GAS:
U.S. gas prices soar as Europe and Asia scramble for LNG
John Kemp, Reuters, May 8, 2022
U.S. gas prices have surged to the highest level in real terms since the financial crisis in 2008 as strong demand for LNG from buyers in Europe and Asia puts pressure on inventories.
Front-month futures for gas delivered to Henry Hub in Louisiana are trading at almost $9 per million British thermal units, up from just over $3 at the same point last year and less than $3 in 2019.
Front-month futures have surged into a record backwardation of almost $4 above futures for delivery one-year from now, as traders anticipate inventories will remain under pressure through the rest of the year.
Working gas stocks in underground storage are 335 billion cubic feet or 18% below the pre-pandemic five-year seasonal average for 2015-2019.
Inventories have remained low despite a fairly mild winter, with population-weighted heating demand this winter in the Lower 48 states around 7% below the average.
Domestic gas production has recovered to its pre-pandemic peak, according to data from the U.S. Energy Information Administration (https://tmsnrt.rs/3sjBf61).
But exports especially in the form of LNG have risen sharply, which is keeping inventories low and putting upward pressure on prices.
In recent months, LNG exports have been equivalent to 10-12% of domestic dry gas production, up from around 4% in early 2019.
Exports have become a big enough share of the market they have started to enforce a partial convergence with prices in Europe and Asia.
U.S. gas supplies have tightened as Europe and Asia scramble to buy LNG to refill their own depleted storage after last winter and amid fears about a disruption of gas supplies from Russia.
The rise in prices will enforce maximum fuel-switching among power generators from gas to coal to conserve fuel stocks this summer, with spot gas now uncompetitive against coal except for peak generation.
More importantly, high prices have started to encourage more gas-focused drilling, which should continue boosting output through the end of the year and into 2023.
The number of rigs targeting gas-rich rock formations has increased to 144, up from only 100 this time last year, according to field services company Baker Hughes.
As the U.S. gas industry becomes more export-focused, drilling rates, inventories and prices are all becoming more responsive to conditions in Europe and Asia.
MINING:
A nuclear option for mines in the North
Shane Lasley, North of 60 Mining News, May 6, 2022
What if remote mines and communities across Alaska and Canada’s North could plug into batteries the size of cargo containers that could deliver multi-megawatt levels of zero-carbon electricity for at least eight years without needing a charge?
This is the type of power source Westinghouse Electric is delivering with its eVinci microreactor, a 5-megawatt-electrical power module expected to generate heat and electricity at the United States Air Force’s Eielson Base just outside Fairbanks, Alaska.
Most small modular reactors on the horizon are built as permanent power generating plants that are fundamentally scaled-down versions of the large reactors that deliver grid power around the world – albeit with some technological upgrades and safety systems built in.
eVinci, on the other hand, is a truly micro and modular system. Each 5 MW unit can be delivered in four shipping containers – one for each reactor, power conversion unit, heat exchanger, and controls module, and equipment for interconnections. These modules were purposefully designed to be easily and quickly delivered to remote locations such as northern mines and communities and installed in buildings similar to those that house the diesel generators that are a staple for delivering electricity across the north.
“This type of transportable design solves some key challenges we see in Alaska and remote markets in Canada,” Michael Valore, senior director of advanced reactors at Westinghouse, said during an April 26 presentation at the Alaska Alliance offices in Anchorage, Alaska.
With each eVinci unit completely built at a factory, the installation and ramp-up to full delivery of clean and nearly silent electrical and heat generation only takes about 30 days. And much like batteries, the reactor units are simply swapped out for a recharged one when the specialized self-encapsulated fuel is depleted – which would be about every eight years for eVinci modules running at full capacity.
This is expected to be an ideal low-cost solution for remote arctic and subarctic regions, where cold and dark winters make other forms of zero-carbon energy such as solar and wind unfeasible for operations that sometimes need enough electricity to power a small city.
Westinghouse’s eVinci microreactor, on the other hand, really likes cold weather where the larger temperature differential allows for more efficient generation of electricity.
“In Alaska, with well-sub-below temperatures for significant portions of the year, we could potentially exceed 6 megawatts,” said Valore.
At the same time, each microreactor pumps out roughly 7 MW of thermal energy. The waste heat, which is about 350-degree-Fahrenheit after electrical generation, can be captured by a heat exchanger connected to the power conversion module and used to warm buildings or production processes. This essentially free byproduct of the clean and low-cost electricity being delivered by eVinci would be very useful during the winter months across the North.
Eielson, an Interior Alaska air force base that only sees about four hours of daylight and often dips to 40 degrees below zero during the darkest and coldest days of winter, would be an ideal locale for the electric and heat cogeneration abilities of the Westinghouse eVinci microreactor.
“Micro-reactors are a promising technology for ensuring energy resilience and reliability and are particularly well-suited for powering and heating remote domestic military bases like Eielson AFB,” said Air Force Deputy Assistant Secretary for Environment, Safety, and Infrastructure Mark Correll.
Sen. Lisa Murkowski, R-Alaska, who has been one of Congress’ most avid proponents of small modular reactors, commended the Pentagon on its decision to install “smart, safe, and clean next-generation” energy in her home state.
“The implementation of micro-reactor technology will bring clean, and resilient energy opportunities that boost our economy and strengthen our national security infrastructure without the concerns of a large nuclear reactor,” she said.
Northern nuclear mines
Mining companies are increasingly looking into ways to lower the carbon footprint of their global operations to net zero. This is a tall order for an industrial endeavor that has traditionally relied on diesel to power the large earthmoving machines that dig up and transport rock and generate electricity for the power-hungry processing plants.
While global mining companies are making strides in electrifying mining fleets and plugging mines into renewable energy sources in regions closer to the equator, such solutions are not readily available to northern mines that are often hundreds of miles away from the nearest electrical grid, and solar intermittency is more of an annual than daily event.
Generators that burn the same diesel as the earthmoving machines have traditionally been considered the best solution for generating power for mines in Alaska and Northern Canada, which often need as much electricity as a small city.
The Diavik diamond mine in Northwest Territories, for example, requires somewhere between 19 and 26 MW of electricity to operate, which is roughly the same as the NWT capital of Yellowknife, a city of around 19,000 people.
To ensure there is plenty of power at all times, this northern Canada operation has 11 Caterpillar diesel generators with the capacity to deliver around 50 MW of power, which are supplemented by three wind turbines that can generate about 6.9 MW of electricity on an ideal day. The overcapacity diesel gensets provide redundancy for maintenance and emergency, and the wind turbines help reduce the burning of diesel by about 10% on average.
According to Caterpillar, gensets the size of those used at Diavik burn about 175 gallons of diesel per hour when running at 75% capacity. At this rate, keeping the lights on at Diavik requires roughly 1.5 million gallons of diesel to be purchased, delivered, and burned each year.
It would likely take around seven or eight eVinci reactors, which require less redundancy due to the lack of maintenance downtime, to replace the diesel generators at this mine.
A 2021 feasibility study completed by Westinghouse and Bruce Power estimates that a single eVinci microreactor would reduce electrical generation costs by between 14% and 44%. Considering that diesel prices have risen steeply over the past year, these savings would be even higher today.
Westinghouse estimates that electrical costs from its very first commercial eVinci microreactor run about US25 cents per kilowatt-hour of delivered electricity over the eight-plus years of operation on a single charge. This is expected to drop to somewhere between US10 and 18 cents per kWh once increased production reduces the per-unit build costs.
“The first reactor is always by far the most expensive – whether it is a small one or big one, that is always the case,” said Valore.
And the costs are anticipated to be even lower over the 20-plus years a mine is in operation due to the lower costs of subsequent units, which are swapped out like batteries.
These significant cost savings come with some even more substantial environmental benefits – a massive reduction in CO2 emissions and the elimination of the need to transport diesel for heat and electricity.
In mining scenarios, the Westinghouse and Bruce Power study determined that an eVinci microreactor with diesel backup could reduce carbon emissions by about 90%.
Having a zero-emissions baseload power source that also happens to be less expensive to operate than diesel generators opens the door for considering the idea of electric equipment to do the digging and hauling at northern mines.
While the implementation of battery-powered mining equipment is in its nascent stages, especially for surface operations, some of the world’s largest mining companies are already swapping out diesel-burning haul trucks and digging equipment in places where solar, hydro, and other sources of low-carbon power are available.
Electric mining equipment does not make sense, however, if the operation needs to add diesel generators to plug them into. Adding a couple of zero-emission eVinci reactors to handle the extra load of charging and powering electric trucks and excavation equipment, however, would result in even less diesel being hauled and burned across the North.
Time will tell whether the economic and ESG benefits of installing microreactors at northern operations pencil out for mining companies.
Native and First Nations peoples that live in the remote areas of Alaska and northern Canada would also need to be comfortable with nuclear before this technology would be a viable option for powering mines and communities in the North.
How eVinci works
Westinghouse, which has safely been building and operating nuclear reactors around the world for more than 60 years, has designed eVinci to be a safe and resilient source of power with superior reliability and minimal maintenance, particularly for energy consumers in remote locations.
eVinci’s safety and reliability are products of a relatively simple and nearly solid-state design.
The microreactor module itself only has one moving part, an outer control drum that surrounds the core. This drum either absorbs or reflects neutrons based on its position, which serves as a kind of thermostat for the reactor – the more neutrons being reflected, the higher the thermal energy the unit produces and the more it absorbs, the less energy produced. This drum can be rotated to shut down the reactor or to run it at full capacity, and everything in between.
Once the drum is rotated to the operating position and the reactor is generating heat, eVinci passively delivers thermal energy to the electrical and heat units. Also, the reactor is cooled without the need for water or pumps.
Instead, hundreds of heat pipes filled with sodium metal passively transfer heat away from the core at sub-atmospheric pressures.
As the reactor heats up, the sodium in these heat pipes that run through special graphite blocks vaporizes and flows away from the core to the heat exchange unit. As the sodium cools, the liquid is wicked back to the core with a wire mesh inside the heat pipe. This self-regulating system keeps the reactor cool and provides thermal energy that can be transformed into electricity without the need for either pumps or high pressure.
“This technology really doesn’t have anything to manually control; it is basically a solid-state device with a single-shaft power conversion,” Valore said.
The simplicity of the design is also what makes it safe.
“Even if a bad actor were to get to the controls, they only have an option to shut down,” the advanced reactors energy systems director said. “We are literally only giving the operator the capability to manually start up and manually shut down.”
Similarly sized research microreactors are already operating safely globally with appropriate levels of oversight and security at universities in major population centers.
The TRISO nuclear fuel that will be used to power eVinci reactors, which uses uranium pellets encapsulated by three layers of carbon- and ceramic-based materials adds an extra layer of safety.
After decades of development and testing, the U.S. Department of Energy has declared TRISO uranium to be “the most robust nuclear fuel on earth.”
“Simply put, TRISO particles cannot melt in a reactor and can withstand extreme temperatures that are well beyond the threshold of current nuclear fuels,” DOE wrote.
Valore said this meltdown-proof fuel has resulted in a massive step-change in the safety of nuclear.
To allay any concerns over the handling or storage of radioactive materials where eVinci reactors are operating, the fuel is never removed at the customer site. Instead, the eVinci reactor is like a battery that will be delivered fully charged with enough uranium to last eight years of operating the reactor at full capacity. When the fuel is depleted, Westinghouse comes in and swaps the microreactor unit with one fully charged with uranium. The depleted cell is brought back to a facility already set up and permitted to handle and store uranium, where it is refurbished and recharged.
Commercial by 2027
Having extensively tested all the critical individual parts and systems, Westinghouse Electric is now ready to finish the technology development and prepare a demonstration reactor.
The first eVinci demonstration reactor is slated to be installed at Idaho National Laboratory where it will be run through testing to gain final Nuclear Regulatory Commission approval for the microreactor design. Westinghouse says it has been working with NRC through every step of the eVinci design and testing. The Idaho testing will give the nuclear commission the final data required to sign off on the safety of the design.
In parallel, Westinghouse is advancing similar regulatory approvals in Canada. In March, the Canadian government announced that it is investing C$27.2 million (US$21.6 million) to support this effort.
“As our government moves swiftly with our green economic recovery, we are laying the foundation for a better and more prosperous climate-oriented future,” Canada Minister of Innovation, Science and Industry François-Philippe Champagne said upon the March announcement of the investment. “Westinghouse’s innovative technology will help deliver cleaner energy sources across Canada, especially in remote communities.”
In the U.S., the eVinci testing and design certification is expected to be completed in 2026, which would enable Westinghouse to support the microreactor at Eielson in 2027.
This pilot was initiated in response to the Fiscal Year 2019 National Defense Authorization Act requirement to identify potential locations to construct and operate a microreactor by the end of 2027.
“This technology has the potential to provide true energy assurance, and the existing energy infrastructure and compatible climate at Eielson make for the perfect location to validate its feasibility,” said Air Force Assistant Secretary Correll.
The Nuclear Regulatory Commission licensed microreactor at Eielson will be commercially owned and operated.
This pilot plant will give mining companies considering the potential of powering their operations with eVinci modules an opportunity to both see the microreactor in action and how these power units could be licensed, installed, and operated at mines.
Following the receipt of federal design approvals, the licensing of an eVinci reactor for any given site is expected to be much simpler and shorter than permitting a mine in the U.S. It is anticipated that a mining company could either own and operate its own eVinci reactors or utilize an independent operator.
With federal backing in both countries, eVinci could be ready to serve as the batteries to power mines in Alaska and northern Canada in about five years. The implementation of these microreactors has the potential to massively reduce the gallons of diesel shipped into and CO2 emitted from these mines that have few other options for zero-carbon energy. Reductions that could be multiplied by plugging electric mining equipment into what are essentially nuclear batteries that keep going and going for at least eight years.
POLITICS:
