Alaska LNG Scores Regulatory Win

The Alaska LNG project, proposed over a decade ago, has gained new momentum from increased demand for US LNG supplies in Europe and interest from Japan. Not to mention a recent approval from the US Department of Energy (DOE) to export to countries without a free-trade agreement.

"Since the Russian invasion of Ukraine, the world got tipped upside down," said Frank Richards, president of the Alaska Gasline Development Corporation (AGDC).

“But AGDC has not taken a final investment decision (FID) on the $39 billion project proposed more than a decade ago, having been unable to secure financing for what would be one of the biggest construction projects in US history,” reports Energy Intelligence. “Adding to the difficulties, environmentalists continue to seek ways to block the project, and the DOE appeared to address at least one of their concerns by ‘prohibiting venting of CO2’ in the LNG export process.”

Environmentalists are currently pursuing a lawsuit to review the Federal Energy Regulatory Commission’s approval of the project in a US District Court.

TransWest Wind Transmission Line Woes

The Bureau of Land Management has OK’d a 732-mile transmission line that will zap 3,000 megawatts of power from the Sierra Madre and Chokecherry wind energy projects in Wyoming all the way to Southern California.

The permitting process took fifteen years and it will take another five years of construction before it goes live.

“The National Renewable Energy Laboratory estimated that if the U.S. got 90% of its electricity from renewable sources, it would need to build twice as much capacity as its current 240,000 miles of high-voltage power lines now carry,” reports Cowboy State Daily.

Experts predict that the US needs to increase its transmission capacity by 3.2 times its existing infrastructure by 2050 to onboard more renewables. But current permitting process and local opposition to transmission lines makes it difficult to accomplish.

Not to mention the physical challenges. “In 2012, the National Renewable Energy Laboratory estimated that if the U.S. were to attempt to derive 90% of its electricity from renewable sources, it would have to roughly double its high-voltage transmission capacity,” writes Robert Bryce. “The US now has about 240,000 miles of high-voltage transmission lines. Put another way, trying to run the electric grid on renewables would require enough high-voltage transmission to circle the Earth nearly 10 times.”

Other problems: transmission costs often aren’t factored into the Levelized Cost of Energy for renewables and renewable energy policy targets rarely appreciate the aforementioned obstacles.

Copper Industry Sounds Supply Gap Alarm

Copper mining executives and analysts warn that the world's surging demand for copper will outstrip supply over the next decade unless dozens of new mines are built. The forecast highlights the growing tension over where and how the world can procure metals for the green energy transition.

“If we don’t have enough copper, it could seriously short circuit the energy transition,” Jeremy Weir, CEO of metals trader Trafigura AG, said at the copper industry’s largest gathering since 2019.

According to data released by the International Copper Association (ICA), even with increased recycling, the global supply of copper is expected to rise 26% to 38.5 million tonnes annually by 2035, but it is likely to fall short of demand by 1.7%.

“Regulatory approval for new copper mines has fallen to the lowest in a decade, according to Goldman Sachs, an ominous harbinger as mines often take 10 to 20 years to permit and build. Goldman expects surging copper demand to push prices to $15,000 a tonne by 2025, 67% above current levels,” reports Mining.com. “Much of the new demand is expected to come from electric vehicles, which are built with far more copper than internal combustion engines. But without enough copper, EV manufacturers could use less than expected or even turn to aluminum, analysts warned.”

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Conversation Starters

1. Another strike could KO UK O&G. “The United Kingdom’s oil and gas industry is bracing for another strike, after the British labor union Union announced that more than a thousand offshore workers would begin a 2-day strike starting on Monday,” reports Oilprice.com. “The 1,300 offshore workers that are set to walk off the job for 48 hours starting on Monday could disrupt oil and gas production for BP, CNRI, EnQuest, Harbour, Ithaca, Shell, TAQA, and TotalEnergies. The UK’s Unite Union called the strike, set to go into effect on Monday, earlier last month over pay issues.”

2. Japan’s emissions rose for the first time in almost a decade. “Japan’s emissions rose for the first time in eight years, driven by a post-pandemic recovery that the nation said mirrored similar increases across the world’s most advanced economies,” reports Bloomberg. “Japan’s emissions expanded 2% in the year ending March 2022 to 1.12 billion metric tons of carbon dioxide equivalent, the Ministry of Environment said Friday. The new figures represent a 20% reduction over 2013 levels; in order to meet its mid-century net zero goal, Japan has said it needs to cut emissions by 46% by the end of this decade.”

3. More countries are paying Russia in yuan than rubles. “Russian Deputy Prime Minister Alexander Novak said on Saturday that Russia will continue to accept more payments for energy exports in the country's rouble currency and China's yuan as Moscow works to ditch U.S. dollars and euros,” reports Reuters. “According to the Russian central bank, the yuan's share in Russia's import settlements in 2022 jumped to 23% from 4%.”

Crom’s Blessing