Today’s Key Takeaways: Banning use of fossil fuels in wind turbine and solar panel production. Oil prices fall in anticipation of Fed rate decision. Long-term future for Natural Gas. Drills mobilized for Alaskan gold project. Are carbon credits worth producing?
NEWS OF THE DAY:
New York Lawmaker Wants To Ban Use Of Fossil Fuels In Making Wind Turbines And Solar Panels
Kevin Killough, Cowboy State Daily, June 9, 2023
New York state Sen. George Borrello, R-Wyoming County, has introduced a bill to require that all wind turbines, solar collectors, and infrastructure for producing green energy be manufactured and constructed without the use of fossil fuels.
His bill would also apply to the manufacture and distribution of electric vehicles.
If the bill were to become law, it would be the end of renewable energy. There’s no feasible way to manufacture and transport wind turbines, solar panels, and electric vehicles without fossil fuels.
Borrello is well aware of this fact and said he suspects most of his colleagues in the New York Legislature do too.
Like a resolution that was introduced in the last Wyoming legislative session earlier this year that would’ve banned auto dealerships from selling electric vehicles, the goal of Borrello’s bill is to get people thinking a bit harder about the outcomes of extreme green energy policies.
“The intent of the bill is to start an honest conversation about the reality of wind turbines and solar panels,” Borrello told Cowboy State Daily. “These energy sources are praised as the answer to reducing emissions and saving the planet. However, rarely discussed is the environmental damage that results from the manufacture, transport, and installation of these systems.”
OIL:
Oil prices fall as nervous investors await US Fed rate decision
Shariq Khan, Reuters, June 12, 2023
Oil prices fell to multi-week lows on Monday as analysts highlighted rising global supplies and concerns about demand growth just ahead of key inflation data and a U.S. Federal Reserve meeting later this week.
Brent crude futures fell $2, or 2.7%, to $72.79 a barrel by 11:50 a.m. EDT (15:50 GMT), while West Texas Intermediate crude futures fell $2.16, or 3.1%, to $68.01 a barrel.
Goldman Sachs cut its oil price forecasts on higher-than-expected supplies from Russia and Iran. The bank’s December crude price forecast now stands at $86 a barrel for Brent, down from $95, and at $81 a barrel for WTI, down from $89.
GAS:
Shell CEO’s New Strategy Sees a Long-Term Future for Natural Gas
Stephen Stapczynski, Bloomberg News, June 12, 2023
Shell Plc sees a long-term role for natural gas in the world’s energy mix and aims to expand in key growth markets as Chief Executive Officer Wael Sawan revises the company’s strategy.
Liquefied natural gas teams are being urged to do more business in China and India, and the company is providing higher bonuses for deals struck in those and other target nations, according to people who have been briefed on the company’s plans.
Shell will examine investment opportunities for LNG export facilities or long-term supply deals, according to the people, who asked not to be named as the details are private.
“We have always known that gas is crucial for the energy transition, but our new strategy is built around a new belief — that gas will continue to play a key role in the energy mix,” Cederic Cremers, an executive vice president for LNG at Shell, said in an internal memo seen by Bloomberg News.
Shell declined to comment. Sawan, who became CEO in January, is scheduled to update investors Wednesday at a Capital Markets Day.
His plan comes after the performance of Shell’s integrated gas business helped lift first-quarter profit and follows the unit’s record annual performance last year when LNG was boosted by Russia’s decision to cut pipeline supplies to Europe. It also comes as the wider sector reassesses the pace of its shift away from fossil fuels.
Shell will keep oil output steady or slightly higher into 2030, scrapping annual production cuts, Reuters reported last week.
BP Plc is also moving to pump more oil and gas than previously planned in the near term, while Chevron Corp. forecasts strong long-term demand for natural gas — rather than a shorter-term role as a transition fuel to cleaner energy sources.
Sawan has already flagged Shell will exit businesses that aren’t producing adequate returns and the firm’s renewable power division has been told that it needs to become more profitable, not just deliver lower carbon emissions.
Some investors and activists have raised opposition to a weakening of climate pledges among the largest energy producers. Shell’s annual meeting last month was disrupted for over an hour by protests, including calls for the company to invest more in renewables.
Shell’s refreshed LNG strategy will include additional work with customers to reduce emissions from the fuel by using carbon capture and storage, and also focus on hydrogen, according to the internal memo.
MINING:
Drills mobilized for Herbert Gold program
A.J. Roan, North of 60 Mining News, June 9, 2023
Grande Portage Resources Ltd. June 6 announced the start of its 2023 drilling program, which aims for 20,000 meters in 15 to 20 holes at the company’s Herbert Gold project in Southeast Alaska.
Located 25 kilometers (16 miles) north of Juneau, the Herbert Gold project is an exploration stage, high-grade, gold-mineralized mesothermal quartz vein system in the historic Juneau Gold Belt.
According to a 2021 calculation, Herbert Gold hosts 3.64 million metric tons of indicated resource averaging 10.23 grams per metric ton (1.2 million ounces) gold, and 5.87 g/t (686,700 oz) silver; plus 1.14 million metric tons of inferred resource averaging 8.91 g/t (325,900 oz) gold, and 4.63 g/t (169,300 oz) silver.
Due to hiccups in 2022, Grande Portage has enlisted the help of NISS (Nasco Industrial Services and Supply) Global, whose clients include Hecla Mining, Rio Tinto, Barrick, and Newmont Gold, to drill up to 20,000 feet.
You can read about the company’s drilling agreement with NISS at Grande Portage enlists drilling powerhouse in the March 17, 2023 edition of North of 60 Mining News.
“Our 2022 began late due to unforeseen contractor and supply chain delays,” Grande Portage Resources President and CEO Ian Klassen said in November. “This, coupled with unseasonably poor and foggy weather, further interrupted the company’s original drill plan.”
The company aims for 2023 to be different and will utilize up to four different drill platforms to test numerous targets and satellite structures; and is considered a continuation of previous drilling, which successfully tested multiple gold-quartz veins of the Herbert mesothermal vein system with very encouraging results.
This year’s program will target several geologically promising high-value targets at the Main, Goat, Deep Trench, Ridge, and Sleeping Giant veins from multiple locations and is expected to conclude in late October 2023.
“Our geological team has gone to great lengths to design a very ambitious program from 2023,” said Klassen. “Our project is well situated in a historically proven and prolific gold belt. We look forward to building upon the Herbert resource, a high-grade gold system that has a current National Instrument Mineral Resource of 1.2 million ounces of gold (Indicated) at an average grade of 10.23 g/t gold and an (Inferred) resource of 325,900 ounces of gold at an average grade o.
POLITICS:
Low-Energy Fridays: Are Carbon Credits Worth Pursuing?
Phillip Rosetti, R Street, June 9, 2023
One of the best parts about my job is that I get to meet a ton of smart people and have fascinating conversations about policy topics that nerds like me love (but that would likely have an effect like Ambien for others). One chat that has always stuck with me was when I spoke with an expert on carbon credits and offsets, and his off-the-record and anonymous insight was that most people don’t realize the volume of carbon credits that are probably junk. This wasn’t based on any hard science; this was his gut instinct in looking at the huge volume of carbon credits that come from things like renewable energy or forest conservation—things that are very hard to demonstrably prove offer “additional” climate benefit from the purchase of the credit. Personally, I’m bullish on carbon credits because, despite their problems and scandals, they are fixable, and they offer a potential market benefit that isn’t easily replicated elsewhere. I covered this in detail in a recent paper, but here is the gist of how we should be thinking about carbon credits.
A carbon credit is a purchasable credit that allows a buyer to claim that their investment has resulted in some offset or sequestration of carbon dioxide (or another greenhouse gas), usually equaling one metric ton. About half of these credits are from renewable energy projects, and another huge amount come from forest conservation. The benefit of carbon credits is that they’re really cheap (often under $10) and are an easy way to get capital from private investors into climate priorities without imposing costs on taxpayers.
But because so many of those carbon credits don’t seem essential to achieving the climate benefit they claim, confidence in the credits has dropped, and the market seems to be flooded with low-quality credits that depress the overall price. Consequently, capital is steered toward the cheapest credits that also have the least certain benefit, while many genuine opportunities for emission abatement are left unfunded. And because many consumers of carbon credits only care about price, this creates a perverse system where the stated intent of the capital (emission avoidance) is divorced from the utility to the consumer (brand value from carbon neutrality).
The fix, as noted in my recent paper, is to raise the bar for carbon-credit quality. This need not be through regulation; it can simply be through establishing higher standards of credibility under existing governmental and intergovernmental programs that seek to utilize or expand carbon offsetting. The value proposition is significant, with potential emission avoidance increases comparable to total annual U.S. agricultural emissions. This works because the losers under such a system are the purveyors of low-quality credits, and the winners are the ones who could change their emission behavior but are unable to cover the investment costs on their own. Put simply, the benefit comes from reducing fraud in the market.