NEWS OF THE DAY:
“Republican Gov. Mike Dunleavy of Alaska said in his state of the state speech in January: “If a regulation needs to be suspended during a crisis, we have to ask ourselves, why was it there in the first place, and can we live without it?””
Calls Grow to Abandon Regulations Eased Under Covid (Hello, Cocktails to Go)
Aaron Zitner, Julie Bykowicz, The Wall Street Journal, April 6, 2021
One day early in the coronavirus pandemic, El Arroyo, a Tex-Mex restaurant in Austin, banked just $186 in sales. Owner Ellis Winstanley put a cheeky plea on the marquee: “Now would be a good time to legalize drive-up margaritas.”
Days later, Texas Republican Gov. Greg Abbott did just that by issuing temporary approval of alcohol pickup and delivery from licensed bars and restaurants. Mr. Winstanley changed his sign to credit the governor’s move with his ability to rehire 40 employees.
Across the country, state and local governments have temporarily eased hundreds of regulations during the pandemic, aiming to help consumers social distance and businesses avoid economic disaster. Now, some want to abandon them for good.
Lawmakers in Texas and at least 19 other states that let bars and restaurants sell to-go cocktails during the pandemic are moving to make those allowances permanent. Many states that made it easier for healthcare providers to work across state lines are considering bills to indefinitely ease interstate licensing rules. Lawmakers in Washington are pushing for Medicare to extend its policy of reimbursing for certain telehealth visits. States also are trying to lock in pandemic rules that spawned new online services, from document notarization to marijuana sales.
Deregulation has long been a central tenet among Republican politicians, but many of the coronavirus-inspired changes have gained bipartisan support.
“I’m a Democrat. I’m not instinctively antiregulation. But I think this pandemic reminds us that some regulations are from a bygone era and make no sense for anyone anymore,’’ said Sen. Brian Schatz (D., Hawaii), who is leading Senate efforts to permanently expand Medicare coverage for telehealth.
Similarly, Republican Gov. Mike Dunleavy of Alaska said in his state of the state speech in January: “If a regulation needs to be suspended during a crisis, we have to ask ourselves, why was it there in the first place, and can we live without it?”
OIL
Treasury puts a number on its fossil tax plan
Ben Geman, Axios, April 8, 2021
The Treasury Departmentestimates its plan to end subsidies for fossil fuel companies would bring in over $35 billion in federal revenue over 10 years.
Driving the news: “The main impact would be on oil and gas company profits. Research suggests little impact on gasoline or energy prices for U.S. consumers and little impact on our energy security,” officials said in a report on the wider White House tax policy proposal.
- The White House has not spelled out precisely what tax code provisions that affect fossil fuel companies they want to change.
- But past Democratic proposals have taken aim at areas like write-offs for certain drilling costs and the oil-and-gas industry’s eligibility for deductions on manufacturing income.
- The White House is looking to boost tax revenue from the oil industry while expanding tax incentives for renewable power, creating new transmission and storage credits and more.
The other side: The oil-and-gas industry argues that it doesn’t get special treatment under the tax code, and instead uses provisions aimed at spurring a wide range of business investment.
Via Reuters, the American Petroleum Institute argues that “Targeting specific industries with new taxes would only undermine the nation’s economic recovery and jeopardize good-paying jobs, including union jobs.
Go deeper: Biden Tax Plan Targets Fossil Fuel Subsidies Worth $35 Billion (Bloomberg)
GAS
Biden looks to appoint special envoy to kill Russia-Germany energy pipeline
Natasha Bertrand, Andrew Desiderio, Politico, April 7, 2021
The White House is in talks to appoint a special envoy to lead negotiations on halting the construction of Russia-to-Germany gas pipeline Nord Stream 2, current and former U.S. officials said, as the Biden administration grapples with how to stymie a nearly completed energy project that would serve as a major financial and geopolitical boon to Moscow.
Amos Hochstein, who served as the special envoy and coordinator for international energy affairs under President Barack Obama and was a close adviser and confidant to then-Vice President Joe Biden, was informally offered the role by National Security Adviser Jake Sullivan late last month and is being vetted, the officials said, but he has not yet accepted the job.
Hochstein, who stepped down from the supervisory board of the Ukrainian energy company Naftogaz late last year, declined to comment.
Hochstein, who stepped down from the supervisory board of the Ukrainian energy company Naftogaz late last year, declined to comment.
The potential appointment of an envoy indicates a new strategic focus by the administration. Previously, the White House had tasked the European affairs experts at the National Security Council and the State Department with handling the pipeline diplomacy; officials tell POLITICO there’s consensus that the thorny geopolitics surrounding Nord Stream 2 now require more dedicated attention — especially as the pipeline, which is already nearly 96 percent finished, races toward completion.
It’s also a nod to the pressure campaign from Capitol Hill, where senators from both parties have been pushing the Biden administration to effectively cripple the pipeline before it’s too late. Sen. Ted Cruz (R-Texas) has held up speedy confirmation of Biden’s top State Department nominees as part of that effort, and other senators have publicly called on the administration to accelerate a sanctions package targeting entities involved in the pipeline’s construction, as required by law.
MINING
Constantine drilling again at Palmer, water permit in limbo
Elwood Brehmer, Alaska Journal of Commerce, April 7, 2021
Constantine Metal Resources plans to put nearly $9 million into further drilling work at its underground Palmer mine prospect near Haines this summer after the pandemic curtailed work last year.
The $8.8 million summer work budget is largely for drilling to further delineate the Palmer project resource base as well as collect geotechnical data for the large underground exploration tunnel the company hopes to dig in the coming years.
In total, the leaders of Vancouver-based Constantine hope to conduct roughly 6,000 meters of drilling; the work is being funded by large Japanese mining company Dowa Metals and Mining Ltd. Constantine, which has led exploration at the polymetallic Palmer prospect for years and is continuing as the project operator, will see its ownership share drop to no less than 44 percent, according to a March 30 statement.
Constantine CEO Garfield Mac Veigh said in an interview that the company advanced its understanding of the environmental factors at play during the $2.2 million surface work program conducted at Palmer last summer.
This year the company hopes to find the “offset” to the prospect’s South Wall deposit with some of its drilling, according to Mac Veigh.
An offset is generally a similar geologic formation — in this case likely metal-bearing — that has been displaced and shifted by a fault.
“That could have a substantial impact on the economics of the project because that offset should be pretty accessible from our underground exploration,” Mac Veigh said.
If developed as currently envisioned, the Palmer project would be an underground mine that would process up to 3,500 metric tonnes of ore per day, or approximately 12.5 million metric tonnes over the life of the mine, based on figures from a 2019 preliminary economic assessment.
From that, the mine would produce more than 1 billion pounds of zinc, 196 million pounds of copper, 18 million ounces of silver, 91,000 ounces of gold and nearly 2.9 million tonnes of barite, a common industrial mineral, according to Constantine.
The deposit is adjacent to the Alaska-Canada border and near the Haines Highway about 40 miles northwest of Haines along the Klehani River, which flows into the Chilkat River. It is on a mix of federal mining claims surrounded by land owned by the Alaska Mental Health Trust Authority, which is open for development.
The mine would cost $278 million to develop and require another $140 million for sustaining capital and reclamation costs for an estimated all-in cost of $418 million, according to the 2019 report.
About 1,700 meters of the drilling this summer is dedicated to advancing the company’s knowledge of the geotechnical structures and hydrologic systems in the area of the proposed exploration tunnel, according to Mac Veigh.
Constantine was moving towards the major exploratory endeavor to blast a roughly 1.25-mile tunnel that would serve as a space to conduct exploration drilling and collect further geotechnical and hydrologic data in 2019 before a Supreme Court case originating from Maui pushed Department of Environmental Conservation officials to remand and review the wastewater discharge permit for the work and the company to reevaluate its wastewater plan.
In the Maui case, the Hawai’i Wildlife Fund and attorneys for the national environmental law firm Earthjustice contend the County of Maui for decades has been polluting near shore ocean waters by injecting millions of gallons of treated sewage water into the groundwater.
The groups brought a lawsuit against the County of Maui and in 2014 a federal District Court of Hawaii judge found the wastewater injection well operation violates the Clean Water Act because the wastewater seeping up through the ocean floor can be traced back to the injection wells.
The county’s appeal to the Ninth Circuit Court of Appeals was rejected as well. A 6-3 Supreme Court ruling hedged the issue somewhat, contending Maui needed a Clean Water Act National Pollutant Discharge Elimination System permit from the Environmental Protection Agency but also narrowing the scope of when such a permit is required from what the environmental groups were seeking.
In Alaska, where the state has taken primacy over wastewater management from the EPA, such permits are handled by DEC.
DEC spokeswoman Laura Achee wrote via email that Constantine’s wastewater permit remains valid but the company “is revising their wastewater disposal system engineering plans and will submit their plans to DEC for review and approval.”
There is no timetable for how long that will take.
Gershon Cohen, project director for Alaska Clean Water Advocacy, originally petitioned DEC officials to reconsider their 2019 approval of Constantine’s wastewater discharge permit, contending it was wholly inadequate for the amount of groundwater contaminated with hydrocarbons, blasting solids and explosive residue prior studies indicate could be released by the blasting for the exploration tunnel.
Constantine’s original plan called for diverting the water into two settling ponds to handle 500 gallons per minute and hold up to 358,500 gallons each for 12 hours to allow solid materials to settle out of the water before it is sent back underground. According to Cohen, that would be enough capacity to handle just two days’ worth of water flow from the tunnel area and doesn’t account for how the system would operate in winter conditions.
“This is going to be a truck traffic-sized opening under a glacier for a mile to reach a deposit,” Cohen said, noting nearby Glacier Creek is a major coho salmon rearing stream and insisting the wastewater would reach the Chilkat, treated or not.
“Once it starts leaking it’s never going to stop. If they start digging that tunnel, they will be setting in motion something that can’t be reversed.”
Constantine has dye water tracing tests ongoing in the area and will likely conduct seismic surveys of the Glacier Creek area to better understand the bedrock and soil makeup and how that could impact water flow as well as establishing infrastructure in the mountainous area, according to Mac Veigh.
He said it’s too early to tell how much the new water treatment design will differ from the original plan but added it probably won’t be finished until late this year after the company has been able to digest all of the data it gathers this year, at the earliest.
Constantine is also looking at technologies that would allow it to clean the wastewater before it leaves the tunnel, according to Mac Veigh.
POLITICS
From the Washington Examiner, Daily on Energy:
SHELL BACKS DEMOCRATS’ BID TO SAVE METHANE RULES: Shell lent its support yesterday to an effort by Democrats to use a procedural tool to cancel a Trump administration action that would essentially block the EPA from controlling methane emissions from oil and gas production.
European-based Shell became the first oil major to endorse a resolution introduced by Democratic Sen. Martin Heinrich and Independent Sen. Angus King of Maine, who caucuses with Democrats, to use the Congressional Review Act to scrap the Trump administration methane rollback in a fast-tracked manner with a simple majority vote.
Why it matters: Environmentalists said Shell’s endorsement could encourage other big oil companies to do the same. While Big Oil and its trade groups have said they support Biden’s plan to impose direct federal regulation of methane, they’ve been silent about Democrats’ CRA tactic until now.
“Energy companies that want to be part of the climate solution are going to support the methane CRA,” Ben Ratner, senior director with the Environmental Defense Fund+Business, told Josh.
CLIMATE CHANGE
Senator Bernie Sanders wants fossil fuel execs to testify to the budget committee
Cara Korte, CBS News, April 8, 2021
Senator Bernie Sanders, chairman of the Senate Budget Committee, has called on three oil and gas executives to testify next Thursday at a hearing on climate change.
BP America Chairman and President David C. Lawler, Chevron CEO and Chairman Michael Wirth and ExxonMobil Chair and CEO Darren W. Woods were invited to participate in a hearing titled, “The Cost of Inaction on Climate Change.”
In an interview with CBS News, Sanders said that Lawler already declined the request, sent Tuesday. BP America declined to comment to CBS News.