Today’s Key Takeaways: Rely on sound science re: Willow – not the sound of outside voices. Natural gas prices fall below $3. Trilogy Metals confirms high grade copper at Arctic site in Ambler Mining District. Tongass restrictions reinstated by Biden Administration.
NEWS OF THE DAY:
Willow project must survive: Biden needs to approve Alaskan petroleum reserve
Todd Tiahat, The Washington Times, January 26, 2023
In the northeast corner of Alaska’s National Petroleum Reserve, there’s a 600-million-barrel reserve of petroleum called the Willow project. The United States needs that oil and has had to wait too long to get it.
The lease was acquired in 1999, when Bill Clinton was president. The permitting process has continued on over two decades and through five presidential terms. Its final approval is now with the Biden administration’s Bureau of Land Management.
It has the ongoing support of Alaska’s bipartisan congressional delegation. The bureau estimates it will generate more than $10 billion in tax and royalty revenue, which, under current law, will be administered by the state of Alaska. Half the federal royalties will be used to support local native communities’ public health clinics, schools, public safety, transportation, and search and rescue capabilities.
The Willow project has the backing of native groups. This support was expressed directly to the bureau by Joe Nukapigak, president of the Kuukpik corporation. John Hopson Jr., an Inupiat whaling captain and local elected official, has called on the White House for support. Alaska Federation of Natives President Julie Kitka wrote that the project “has undergone stringent environmental permitting and a vigorous community engagement process” in a letter urging approval to President Biden’s interior secretary, Deb Haaland.
Alaska’s workers and unions are on board, too. Joey Merrick, president of the Alaska District Council of Laborers, called the project a job creator that will generate 2,000 construction jobs and 300 permanent positions. That’s a lot of jobs and paychecks in a small community. Mr. Merrick also noted the bureau’s estimate that 75% of Willow’s installation work, about 9 million man-hours, will come from union labor working for union wages.
Most of the opposition to the Willow project comes from the lower 48. The Alaska Wilderness League, which is based in Washington, D.C., and The Wilderness Society, the Sierra Club, the Defenders of Wildlife, Evergreen Action, and Friends of the Earth are the groups that rallied outside the White House, calling for the termination of the $8 billion NPR-A Willow project.
Relying on the sound of their voices rather than sound science, the protesters complained about the potential impact on the environment, and the caribou and their migratory habits. They didn’t have much to say about the jobs that won’t be created if the project isn’t allowed to move forward.
In Alaska, Voice of the Arctic Inupiat, which represents Inupiat groups on the North Slope — says the protests from green groups are a threat to their way of life. “Outside groups from nearly 4,000 miles away are actively co-opting our voices and promoting misinformation to the Biden administration in an effort to drown out the perspectives of the local communities and regional leadership who overwhelmingly support the Willow Project. Those actively working to stop the Willow Project threaten our Iñupiat culture that relies on and coexists with projects like Willow.”
The greens’ loudest complaint is that the project would produce as much carbon emissions as 66 new coal-fired power plants.
Setting aside the argument that, based on demand, an equal amount of oil will be consumed, whether from Willow or Venezuela, the opposition’s carbon emissions claims are full of soot. Using EPA calculations for the latest Chinese coal-fired power plant, all the oil produced by the Willow project will produce what comes out of about eight new coal plants in a single year.
If the anti-Willow protesters were truly concerned about carbon emissions, why not picket the Chinese? In 2021, China added more coal plants than the rest of the world combined. Their emissions will wipe out several years’ worth of carbon emission reductions here in the U.S.
Perhaps carbon emissions are the real target. To compare, China produces about twice as much of the world’s carbon dioxide — 23% — as the U.S. The U.S. reduced its carbon footprint to 2005 levels by 2020. Policies remain in place to continue that trend. America leads the world in carbon dioxide emission reduction, while China is on track to double its emissions in less than 20 years.
There is a certainty that energy costs will continue to rise. This hurts Americans’ bottom line. When demand is stable and more energy is available, costs decline. When less energy is available, the price rises.
Americans cite the price of energy as one of their biggest concerns. To reduce it, produce more of it. Once online, the Willow project will help do that. Equally important, it will benefit native Alaskans, union workers and the Alaskan economy. It is time for the Biden administration to move past the protest placards and give life to Alaska’s Willow project.
• Todd Tiahrt is a former member of Congress and ranking member of the Appropriations Subcommittee on Interior, Environment and Related Agencies.
US Natural Gas Falls Below $3 For First Time Since May 2021
Gerson Freitas, Jr, Bloomberg Investing, January 25, 2023
US natural gas futures extended losses below $3 amid mild winter weather that helped spark the worst selloff among the country’s commodities.
Gas for February delivery lost as much as 9.7% to $2.77 per million British thermal units Thursday on the New York Mercantile Exchange. Prices have been at the lowest levels since April 2021 after dipping below $3 on Wednesday.
Doomsday fears that suppliers wouldn’t be able to meet wintertime demand have been erased by a confluence of factors, leading gas prices to plunge more than 70% after hitting a 14-year high of $10.03 in August. The key reason for the fall: The US and Europe managed to refill their buffer inventories ahead of winter, and relatively balmy seasonal temperatures in the Northern Hemisphere have so far damped demand for heating.
The latest revisions to the weather forecast were “absolutely brutal”, indicating that a looming cold shot in the US won’t last much and leading traders to bet on mostly mild February temperatures, said Gary Cunningham, director of market research at risk management firm Tradition Energy.
The premium typically commanded for gas delivered in March rather than April — essentially a bet on how tight supplies will be at winter’s end — has reversed to a discount.
“That alone tells you that traders have given up on winter,” Cunningham said. “The bears are ruling the market and the bulls have been chased into the shadows.”
The amount of gas stored in salt caverns and depleted aquifers fell by less than usual for a second straight week after an unprecedented increase earlier this month, and is now almost 5% above the average for the past five years, the Energy Information Administration said Thursday.
Also weighing on prices, the longer-than-expected shutdown of a Texas liquefaction terminal has constrained US gas exports and thus boosted domestic supplies. On Monday, Freeport LNG, the terminal operator, requested permission to resume some operations at the facility, but the Federal Energy Regulatory Commission hasn’t yet responded.
Natural gas had been one of the most bullish commodity stories in recent years. Prices hit the August high amid a global supply crunch that was aggravated last year by Russia’s invasion of Ukraine.
Drills confirm Arctic deposit consistency
Shane Lasley, North of 60 Mining News, January 26, 2023
Trilogy Metals Inc. Jan. 25 reported that consistent high-grade intercepts from its 2022 infill drill program at Arctic confirm the continuity of high-grade copper-zinc-lead-gold-silver mineralization within this volcanogenic massive sulfide deposit within the famed Ambler Mining District in Northwest Alaska.
“As expected, the 2022 infill drill program continues to yield high grades of copper, zinc and precious metals, demonstrating the continuity of the high-grade zones of these metals at Arctic,” said Trilogy Metals president and CEO Tony Giardini.
Arctic is the most advanced deposit within the Upper Kobuk Mineral Projects, a 448,217-acre land package that includes Arctic and more than a dozen similar VMS targets on state lands, plus the world-class Bornite copper-cobalt deposit and similar carbonate-hosted prospects on land owned by the Northwest Alaska Native regional corporation, NANA Corp.
A 2020 feasibility study for developing a mine at Arctic details a financially robust operation that would produce 1.9 billion pounds of copper, 2.3 billion lb of zinc, 388 million lb of lead, 386,000 ounces of gold, and 40.6 million oz of silver over an initial 12-year mine life.
TONGASS ROAD-BUILDING AND LOGGING RESTRICTIONS REINSTATED: The U.S. Forest Service said yesterday it is reinstating restrictions on road-building and logging in the Tongass National Forest in Alaska, an effort to settle a two-decade long dispute over America’s largest temperate rainforest, after its Clinton-era protections were rolled back during the Trump administration.
Tongass is roughly the size of West Virginia, and has a unique ecosystem made up of rainforests, fjords, and coastal islands, as well as ancient, towering trees that store more than 8 percent of the carbon accumulated by the rest of the country.
In addition to prohibiting road construction, the Forest Service rule would restore protections making it illegal for logging companies to remove timber in the roughly 9.3 million acre forest.
“As our nation’s largest national forest and the largest intact temperate rainforest in the world, the Tongass National Forest is key to conserving biodiversity and addressing the climate crisis,” Agriculture Secretary Tom Vilsack said in a statement yesterday.
Alaska’s governor, Mike Dunleavy (R), objected to the decision, writing on Twitter yesterday that “Alaskans deserve access to the resources that the Tongass provides — jobs, renewable energy resources and tourism, not a government plan that treats human beings within a working forest like an invasive species.”
From the Washington Examiner, Daily on Energy