Today’s Key Takeaways: Granholm to Industry: “We are eager to work with you.” Biden may be ready to sign off on AK drilling project. Global gas crunch getting worse. Gates/Bezos backing Zambia copper mine. Schumer promises vote on Manchin permitting amendment.
NEWS OF THE DAY:
USA Energy Sec Offers Olive Branch to Oil Industry
Ari Natter, Bloomberg/Rigzone, December 15, 2022
Energy Secretary Jennifer Granholm extended an olive branch to the oil and gas industry, telling executives at a meeting in Washington that she recognizes fossil fuels will be around for a long time, even as the Biden administration works to transition away from them to cleaner alternatives.
“We are eager to work with you,” she said at the Wednesday meeting of the National Petroleum Council, an outside federal advisory group that includes executives from Exxon Mobil Corp. and Royal Dutch Shell Plc. “Moving too fast could have unintended consequences that hurt people, cause backlash.”
Her remarks come at the end of a year that’s seen a deterioration in the relationship between the industry and the White House. Biden has accused fossil fuel companies of price gouging and has weighed additional taxes on their profits as well as curbs on exports of refined oil products.
Granholm nodded to that friction Wednesday, beginning her remarks by acknowledging the “elephant in the room” and that the administration has “butted heads” with industry. Fossil fuel production will need to increase in the near future to meet growing demand, including a shortage of diesel in the Northeast US, she said.
OIL:
Biden May Be About to Sign Off on a Huge Alaska Oil Drilling Project
Phillip Elliott, TIME, December 13, 2022
When Joe Biden was a candidate to be his party’s nominee for President, he ran as one of the biggest foes of fossil fuels ever to make a credible run for the White House. He pledged to eliminate net carbon emissions by 2050, ween the country off dirty sources of energy and “end fossil fuel.”
He canceled the high-profile Keystone XL pipeline, took millions of acres of possible drilling off the table by scrapping leases to oil and gas companies, and banned imports of Russian oil. He even threatened oil firms with a windfall tax and likened them to war profiteers.
Environmental groups went gaga over his rhetoric and action alike, buoying his political alliances and giving climate change activists heart after years of broken promises.
And yet, a unique alignment of political and geological confluences may spur Biden in the coming days to do something that will leave those same green allies seeing red.
Biden’s administration is nearing a final decision on a potentially game-changing oil and gas project that has now been under consideration across five presidencies. The proposed Willow project in the northeast section of the National Petroleum Reserve-Alaska would produce 180,000 barrels of oil each day, create $10 billion in tax and royalty revenues, and create 2,000 construction jobs and 300 permanent ones. The massive project would require as many as five drilling sites, a processing facility, 50 miles of new roads, seven bridges, and an airstrip.
Local groups, including those representing Alaska Natives, as well as labor unions and the state’s congressional delegation, have all championed the project as a source of good union jobs and money for Alaska’s North Slope.
GAS:
The Global Gas Crunch Is Set To Worsen As China Reopens
Irina Slav, OilPrice.Com, December 14, 2022
- Chinese energy major CNOOC has forecast a seven percent increase in the country’s natural gas imports next year.
- The energy giant is already looking for LNG cargoes for next year as the country continues to ease its Covid restrictions.
- Pipeline imports from Central Asia are in decline while gas inventories in the north are already depleting at a faster rate than usual.
China’s natural gas imports are set for a 7-percent rise next year as the country reopens after Covid lockdowns, which could aggravate an already tight supply situation globally.
The 7-percent import increase forecast was made by state-owned energy major CNOOC, which said, as quoted by Bloomberg, that it was already looking for LNG cargoes for next year.
The report notes that gas inventories at ports in the northern part of the country are depleting at a faster rate than usual because the weather is colder, pushing consumption higher, and this will, too, have an effect on future demand for imports.
What’s more, pipeline supply of natural gas from Central Asia is in decline, which means China will need to rely more on LNG in its gas import mix to make up the difference. And this means more intense competition for a limited number of cargoes between Asia and Europe next year as well.
This year, Chinese gas demand has been trending lower for most of the year, with imports declining consistently over the first ten months of the year, per a report by Energy Intelligence. LNG imports were down by a sizeable 21.6 percent over the ten-month period, reflecting the effects of lockdowns and other restrictions under the country’s zero-Covid policy.
Yet now this policy is being reversed, mass mandatory testing is being dropped and analysts expect a rebound in economic activity before too long. This will drive higher demand for energy and contribute to higher prices due to the tight supply situation in both oil and gas.
This reversal of Beijing’s Covid policy surprised many, who expected tepid demand for energy to continue in one of the world’s largest consumers. If activity rebounds fast, securing sufficient gas supply for the next heating season will likely become a major problem for most importers.
MINING:
Gates, Bezos-backed KoBold Metals to build copper-cobalt mine in Zambia
Cecilia Jamasmie, Battery Metals/Mining.Com, December 14, 2022
KoBold Metals, a start-up backed by a coalition of billionaires including Bill Gates and Jeff Bezos, has committed $150 million to developing the Mingomba copper-cobalt mine in Zambia, said to be the world’s highest-grade undeveloped large deposit of the orange metal.
The start-up, which has Gates’ Breakthrough Energy Ventures and the world’s top miner BHP (ASX:BHP) as shareholders, will use its artificial intelligence tools to process drilling data and optimize exploration for copper and cobalt at Mingomba.
POLITICS:
SENATE TO VOTE ON MANCHIN’S PERMITTING AMENDMENT, SCHUMER SAYS: Senate Majority Leader Chuck Schumer said he will force a vote on including Joe Manchin’s amended permitting reform bill in the annual must-pass National Defense Authorization Act (NDAA), seeking to honor the agreement made to secure the West Virginia senator’s support for the Inflation Reduction Act.
“As you know, Republicans blocked it in the House, even though permitting reform is something that they’ve always supported in the past,” he added. “So I hope they’ll help us [and] support it.”
From the Washington Examiner, Daily on Energy