General News

Drilling, Mining Boom Possible But Unlikely Under Trump’s Final Plan For Southern Utah Lands. According to Inside Climate News, “As ominous as it might seem, the Trump administration’s plan to reverse limits on new mining, drilling and development across a vast swath of federal land in southern Utah is unlikely to unleash a fossil fuel bonanza anytime soon. These days, it’s too costly for fossil fuel companies to extract the oil, gas and coal buried within 2 million redrock acres Trump excised two years ago from the Grand Staircase-Escalante and Bears Ears national monuments. That’s not to say that there aren’t climate impacts of the Trump administration’s final decision, announced Thursday, to strip national monument protections from the wild, desolate landscape, which archeologists and conservationists treasure for its artifacts and natural rock formations. The land also has rich spiritual connotations for the indigenous people of the Four Corners region. In a report ordered by the Obama administration but published just over a year ago, the U.S. Geological Survey estimated the carbon dioxide emitted and retained by public lands in the United States: Nearly 24 percent of U.S. carbon dioxide emissions can be traced to public lands, the report found, and those same lands act as a sink that sucks up and stores carbon from the atmosphere, offsetting in addition about 15 percent of the nation’s CO2 emissions. The climate impact of the final Trump policy is more likely to affect these carbon sinks than it is emissions.” [Inside Climate News, 2/7/20 (=)]

NM Gas Production Up Significantly. According to the Albuquerque Journal, “New Mexico’s natural gas production is ramping up to record heights, with 2019 output on track to surpass the peak levels the state reached nearly 20 years ago. The surge comes courtesy of southeastern New Mexico, where the oil boom is extracting billions of cubic feet of ‘associated’ natural gas, which comes up alongside the crude that operators are pulling out of the Permian Basin’s lucrative shale-rock reservoirs. That oil-associated output has reversed a decadelong decline in state gas production that bottomed out in 2013, when natural gas extraction plummeted to its lowest level since the early 1990s. But the rebound is doing very little to revive the industry in the northwestern San Juan Basin, the state’s traditional gas-producing region, where most operators are still struggling to stay afloat. That’s because gas prices remain stuck at recession-era lows, providing little incentive for companies there to invest beyond the minimum needed to keep current wells running, much less drill new ones. ‘We’re producing so much gas in the Permian Basin, but it’s a much tighter environment in the northwestern part of the state,’ said New Mexico Oil and Gas Association Executive Director Ryan Flynn. ‘Unfortunately, we don’t really see that situation changing in the near future.’ From January to November of last year, the Permian boom pushed state output up to 1.65 trillion cubic feet. That’s up from 1.3 trillion cubic feet in all of 2017, and 1.5 trillion in 2018, according to the latest statistics from the state Oil Conservation Division.” [Albuquerque Journal, 2/10/20 (=)]

Shell’s New Solar Farm To Help Power A Natural Gas Plant In Australia. According to CNBC, “Shell Australia is set to construct and operate a solar farm made up of around 400,000 photovoltaic panels in the state of Queensland. In an announcement Friday, Shell Australia described the facility as its ‘first large-scale solar farm’ and said it would have a capacity of 120 megawatts. Work on the project is set to finish in 2021, with Shell Australia saying up to 200 new jobs will be created during the construction phase. Queensland was chosen as the project’s location because it had ‘some of the most reliable sunshine in the world’, the company added. The solar farm will help to power operations at the QGC onshore natural gas project and cut carbon dioxide emissions by an estimated 300,000 tonnes a year. ‘We believe solar will play an increasing role in the global energy system, especially when partnered with a reliable energy source such as gas,’ Tony Nunan, the chairman of Shell Australia, said in a statement. While Shell is indeed turning to renewable sources such as solar, the overall business is still heavily reliant on fossil fuels. In 2018 Royal Dutch Shell produced 3.7 million barrels of oil equivalent per day, while it sold 71 million tonnes of liquefied natural gas. At the end of January, Reuters reported that the entrance to the company’s headquarters in the Netherlands had been blocked by protestors chanting ‘keep it in the ground’. Demonstrations such as this reflect the current debate – and increasing anxiety – over what many describe as ‘the climate emergency’ and how best to stop it.” [CNBC, 2/7/20 (=)]

Report Attacks Industry Campaign To Fix Natural Gas’s Climate PR Problem. According to DeSmog, “A new report from advocacy group Food and Water Watch argues that fracking and continued reliance on natural gas is detrimental to addressing climate change. The report, which calls out the fossil fuel industry’s misleading narratives around natural gas, comes at a time when progressive members of Congress like Senator Bernie Sanders and Representative Alexandria Ocasio-Cortez are introducing a bill to ban fracking and when the industry is ramping up its public relations push around gas. According to Food and Water Watch’s (FWW) report, greenhouse gas emissions reductions from the power sector over the past decade are not as great as the gas industry claims. FWW researchers found that combined emissions from coal and gas power plants declined 10.4 percent over the last decade. If emissions continue to decline at this roughly 10 percent pace, the report says, they will not reach zero until 2100. The report examines data from the Energy Information Administration (EIA), an academic emissions inventory, and a recent Cornell University study. FWW developed a model that evaluates life-cycle emissions of power production, including methane emissions from coal and natural gas production, processing, transportation, and end use. The organization’s analysis is also based on a comprehensive synthesis of methane leak research.” [DeSmog, 2/9/20 (=)]

There’s More Oil And Gas Than Ever — And The Industry Is Tanking. According to Axios, “The world’s oil and natural gas companies are drilling their way into financial and social hell. Driving the news: The industry’s stocks are in the toilet, and climate change is fast becoming a mainstream investor worry. These problems overlap and neither is going away any time soon — if ever. Why it matters: We all use products from oil and natural gas, those products are heating up the Earth, and many of us probably own (perhaps unwittingly) stock in these companies. The financial and social standing of these companies will somehow affect us all, whether we hate or love them. The intrigue: CNBC’s Jim Cramer raised eyebrows by saying recently that he was ‘done’ with fossil fuels and likened them to tobacco. ‘This has to do with new kinds of money managers, who frankly just want to appease younger people who believe you can’t ever make fossil fuels sustainable,’ he said. A few days later amid backlash, he doubled down in an op-ed. Sure, Cramer is known to be intentionally provocative and has been infamously wrong, but in any case, many Wall Street analysts agree. ‘That’s absolutely representative of what a lot of people are thinking in terms of investing,’ said Paul Sankey, a well-known oil analyst in the sector for 30 years, now at the Japanese bank Mizuho Financial Group. When asked if climate change and potential action on it are affecting the sector’s stocks, Sankey replied: ‘It’s unquestionable. But it is just very, very difficult to put numbers around it.’” [Axios, 2/10/20 (=)]

Power And Natural Gas Roil Energy Shift: What To Know At E-World. According to Bloomberg, “Electricity and natural gas traders arrive in Essen, Germany, this week for the annual E-World conference, one of the industry’s biggest gatherings in Europe this year. With power and natural gas prices tumbling, attention is focused on how quickly German Chancellor Angela Merkel will move to squeeze coal out of the energy market. Here’s a few themes traders will be discussing: After last year’s warmer than usual winter, gas storage sites were brimming at the start of the heating season. And temperatures for the most part have remained above normal. That has shaved down demand for gas at a time of abundant supplies both from pipeline and in cargoes of liquefied natural gas. The result: gas prices are tumbling and dragging power down across Europe. ‘The driver for the low power prices at the moment is a unsustainably low gas price,’ said Alexander Esser, a power markets analyst at Aurora Energy Research in Berlin. ‘That’s pushing more power supply to switch to gas from coal.’ While cheaper power is a relief to consumers, it complicates the picture for utilities already struggling to cope with governments demanding they slash greenhouse gas pollution. German Chancellor Angela Merkel is seeking to phase out nuclear as a power generation fuel by 2022 coal by 2038. European Union policy makers are working toward a goal of zeroing out fossil fuel emissions by 2050, and that suggests gas will need to come off the grid next.” [Bloomberg, 2/10/20 (=)]

Think Tank Says Future GHG Policy Might Halve Value Of Oil, Gas Projects. According to Inside EPA, “A new report by the think tank Carbon Tracker Initiative (CTI) warns that oil and gas companies could see the value of their new projects cut in half and become ‘stranded assets’ under what CTI calls inevitable future policy that will impose strict limits on greenhouse gas emissions. The London-based CTI’s January report, ‘Handbrake Turn,’ underscores the potential financial setbacks for oil, gas, and other fossil fuel investments as climate change concerns increase among investors and others. ‘Oil companies basing future investments on ‘business as usual’ risk seeing the value of their new projects halved on tougher policy,’ creating stranded assets if governments fail to act now on climate change and then later, in the face of worsening conditions, are forced into a ‘handbrake turn,’ or sharp reversal of direction, CTI says in a press release. CTI adds that investors ‘should demand a higher rate of return to compensate for risk when companies pursue high-cost projects relying on higher oil prices,’ and names ExxonMobil, ConocoPhillips, and Chevron as the companies most exposed to price falls. The Obama EPA attempted to pursue GHG regulations for the oil and gas sector, noting the industry’s large contribution to overall GHG levels. And observers expect future U.S. climate policies to encourage a shift away from reliance on fossil fuels. In its analysis, CTI uses the concept of ‘Inevitable Policy Response (IPR),’ commissioned by the United Nations Principles for Responsible Investment.” [Inside EPA, 2/7/20 (=)]

Federal Lease Sale In West Nets $20M. According to E&E News, “A federal oil and gas lease sale in New Mexico and Oklahoma yesterday netted $20 million, reflective of the robust interest industry has shown to federal lands in New Mexico’s southeast corner. The state is a longtime oil and gas producer with many legacy fields in decline, but industry returns have skyrocketed in recent years as drillers have drifted from West Texas’ prolific and expensive Permian Basin into the Land of Enchantment (E&E News PM, Jan. 24). A Bureau of Land Management lease sale in New Mexico in late 2018 brought in a record $1 billion. That sale was largely responsible for a record year for federal oil and gas lease sale revenues, touted by the Trump administration. The increasing production of oil and gas in the United States, a result of technological revolution in shale drilling, has often been noted by the president as a point of pride. President Trump highlighted energy jobs and revenues resulting from what he called a deregulatory campaign from his agencies as one of his successes in the State of the Union address Tuesday. ‘With the tremendous progress we have made over the past three years, America is now energy independent, and energy jobs, like so many elements of our country, are at a record high,’ he said. Increased leasing under the administration has also raised the ire of the conservation community, which says Interior is leasing land at or below the minimum price of $2 per acre in environmentally sensitive areas (Energywire, Sept. 20, 2019).” [E&E News, 2/7/20 (=)]

Chad Ellwood

Climate Action Campaign

cellwood@cacampaign.com

202.448.2877 ext. 119