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Nevada court fights raise caution flags on green energy push

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RENO, Nev. (AP) — Opposition from friends, not foes, is creating potential roadblocks to President Joe Biden’s green energy agenda on federal lands in the blue-leaning, Western swing state of Nevada.

Two lithium mines and a geothermal power plant in the works in the biggest U.S. gold-mining state are under attack from conservationists, tribes and others who otherwise generally support Biden’s efforts to expedite the transition from fossil fuels to renewables.

The conflicts put a spotlight on an emerging reality as the Biden administration tries to meet its goal of having the U.S. power grid run on clean energy by 2035.

Renewable or not, the actual mining of the resources faces many of the same regulatory and environmental hurdles the government has encountered for decades when digging for coal or drilling for oil.

Whether it’s tapping hot underground water to generate electricity with steam-powered turbines or extracting lithium to make electric car batteries, the operations still must comply with laws designed to protect wildlife habitat, cultural and historical values, and guard against pollution or other degradation of federal lands.

During a recent failed attempt to overturn a Nevada water permit for a mine near the Oregon line above the biggest known lithium deposit in the nation, opponents raised some of the same concerns leveled four decades ago about some of the largest gold mines in the world.

Specifically, the Great Basin Resource Watch and others say the lithium mine will produce toxic waste. More generally, they still accuse regulators of rubber-stamping industry plans without a thorough review of the potential harms.

“Everything seems to be in the hands of the mining company,” Sarah Wochele, a mining justice organizer for the Progressive Leadership Alliance of Nevada, said at last month’s appeal hearing. “And we just ignorantly praise new technology, new technology.”

Ramped up domestic production of lithium is key to Biden’s blueprint for a greener future, a critical element for electric vehicle batteries. Worldwide demand for the lightest metal on Earth is projected to increase six-fold by 2030 compared to 2020.

The big deposit bordering Oregon where Lithium Nevada plans to begin construction in December is “vital to our national security and nation’s need for lithium to support green energy development and achieve climate change objectives,” the company said in recent court filings.

But in addition to concerns about toxic waste, the mine sits on federal land local tribes say is a sacred site where dozens of their ancestors were massacred by the U.S. Cavalry in 1865.

Another big lithium mine still on the drawing board, halfway between Reno and Las Vegas, is home to a rare desert wildflower the U.S. Fish and Wildlife Service has proposed for listing under the Endangered Species Act.

Meanwhile, the geothermal power plant faces both cultural and environmental challenges in a case pending before the 9th U.S. Circuit Court of Appeals.

The San Francisco-based appellate court could rule any day on a lawsuit seeking to halt the development in a high-desert oasis 100 miles (161 kilometers) east of Reno where a rare toad currently protected under the Endangered Species Act lives in the same hot springs where Native Americans have worshipped for thousands of years.

The Interior Department’s Bureau of Land Management approved Ormat Nevada’s geothermal project last November over the objections of another Interior agency, the U.S. Fish and Wildlife Service.

Since then, USFWS has taken the rare step of declaring the Dixie Valley toad endangered on a temporary emergency basis — something it’s done only one other time in 20 years.

This month, the Center for Biological Diversity and the Fallon Paiute-Shoshone Tribe amended their lawsuit against the Reno-based Ormat and the Bureau of Land Management in U.S. District Court in Reno to include the April listing.

The updated version alleges both are in violation of the Endangered Species Act because they’ve failed to halt construction “despite USFWS’s unambiguous finding that the project poses an imminent and existential risk to the Dixie Valley toad.”

The government hasn’t responded yet, but the case continues in district court on a parallel track with the appellate court. And the ongoing legal battles underscore the difficulty of turning Biden’s vision of a cleaner energy future into reality.

Administration officials insist they’ve known all along that implementing their plans to slow the warming of the Earth wouldn’t be easy.

“Catalyzing the clean energy economy and seeing renewable energy projects through to completion is no small task,” said Tyler Cherry, press secretary for Interior Secretary Deb Haaland.

“Indeed, these are complex, large-scale projects that require a robust public process,” he wrote in an email July 12 to the AP in response to a request for comment.

The three-judge panel at the 9th Circuit that heard oral arguments on the geothermal case in June said they couldn’t consider the April listing of the toad because it came after the appeal was filed in January.

But the judges acknowledged USFWS had raised similar objections in earlier opinions, warning about the likelihood the geothermal plant’s operations could push the toad to the brink of extinction.

The Justice Department lawyer representing the bureau, Michelle Melton, said federal law required the bureau to consider USFWS’s criticisms but it wasn’t bound by them.

The emergency listing of the toad doesn’t change the bureau’s position that the project will have no significant impact on the tribe or the toad, she said.

“Fish and Wildlife has a different opinion,” Melton said. “It was not a surprise to BLM that Fish and Wildlife felt that way.”

Ormat Vice President Paul Thomsen said the emergency listing overstates the potential impact of the project on the toad partly because it makes false assumptions about underground faults in the geothermal reservoir it intends to tap.

“There are sufficient safeguards in place to avoid endangering the toad,” he wrote June 6 in comments to USFWS.

The 9th Circuit judges appeared sympathetic last month to some of the opponents’ arguments. But they noted that the lower court judge had weighed the pros and cons and determined the public was best served by allowing the temporary injunction blocking construction to expire 90 days after it was issued in February.

They pointed to Judge Robert C. Jones’ conclusion that the electricity produced at the geothermal plant would significantly reduce greenhouse gas emissions compared to other energy production facilities and that “depriving the public of a source of carbon-free” electricity is not in the public’s best interest.

Scott Lake, a lawyer for the Center for Biological Diversity, said the benefits of renewable energy resources are “something the tribe and the center actually agree with.”

“But nothing in the record establishes a public interest in, or a compelling need, for this particular project … on a tribal sacred site and in such a way that threatens the entire existence of the Dixie Valley toad,” he said.

Scott Sonner, The Associated Press

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Alberta

Alberta landowners fear repeat of orphan well crisis as renewable energy booms

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By Amanda Stephenson in Calgary

Once bitten, twice shy.

It’s an old adage that explains why Jason Schneider, the elected reeve of Vulcan County, Alta., is jittery about the renewable energy boom under way in his province.

Like many in rural Alberta, Schneider is still smarting over the way municipalities were left holding the bag when an oil price crash nearly a decade ago resulted in billions of dollars of unfunded liabilities left behind by bankrupt fossil fuel companies.

In Vulcan County alone, the landscape is littered with hundreds of wells with no owners that need to be cleaned up, and the municipality itself is owed more than $9 million in back taxes left unpaid by insolvent oil and gas firms.

So Schneider has a hard time looking at acre upon acre of massive wind turbines or solar panels without fearing a repeat of Alberta’s orphan well crisis, or wondering who’s going to fix everything if something goes wrong.

“These are large industrial developments, and the reclamation costs are going to be substantial,” he said.

“We can see the warning signs, and we are being ignored.”

Across rural Alberta, concerns are growing about the long-term implications of the province’s renewable energy boom — the speed and scale of which has been nothing short of stunning.

A province that not that long ago was largely reliant on coal for electricity, Alberta is now home to more than 3,800 MW of wind and solar capacity, 1,350 of which came online in just the last 12 months. An additional 1,800 MW of capacity is currently under construction, putting the province on track to meet or exceed the target it set in 2016 to generate 30 per cent of its total electricity from renewable sources by 2030.

In Schneider’s Vulcan County, which is home to both the country’s largest solar farm and one of Western Canada’s largest wind farms, renewable energy developments now account for more than 40 per cent of the local tax base, displacing oil and gas as the number one source of revenue for the local municipal government.

But while many in rural Alberta welcome the economic activity, and farmers and ranchers enjoy the extra income that playing host to solar panels or wind turbines can bring, others are sounding the alarm.

For example, the Rural Municipalities of Alberta recently passed a resolution calling on the provincial government to protect taxpayers from incurring costs associated with the potential decommissioning of renewable energy infrastructure.

Specifically, the association wants to see the government mandate the collection of securities for reclamation from developers before a project goes ahead. That way, municipalities won’t be footing the bill if a developer becomes insolvent and walks away.

“What we’ve learned, and what Albertans have learned, is that the cheapest way to get out of reclamation is going bankrupt,” said Paul McLauchlin, president of the Rural Municipalities of Alberta.

“Some of these solar installations are being installed by one company, sold to another company … I talked to a gentleman who’s on his fifth owner, and his solar installation has been there maybe two years. So we’re seeing small companies owning these, and whether they have the wherewithal for reclamation, that’s really what’s driving this conversation.”

In Alberta, the Orphan Well Association is an industry-funded organization tasked with decommissioning old oil and gas infrastructure and returning the land to its prior state. (It’s currently backlogged, in spite of a $200 million loan from the federal government. In 2020, the feds also provided $1 billion for well clean-up to active companies under Alberta’s Site Rehabilitation Program.)

But there’s no equivalent for the renewable energy industry, though renewable energy companies are required to provide an overview of how they plan to cover decommissioning and reclamation costs before they can receive the go-ahead for their project.

However, for a landowner, entering into a wind or solar lease is entirely voluntary. That’s very different from oil and gas, where under Alberta law, property owners are not allowed to refuse companies seeking to develop the fossil fuels that lie under the surface of their land.

Evan Wilson, director of policy and government affairs for the Canadian Renewable Energy Association, said that because solar and wind leases remain private civil contracts between the developer and the landowner, the onus is on the landowner to ensure the inclusion of some kind of provision to mitigate risks associated with the project’s end-of-life.

But he added many companies do offer landowners some form of reclamation commitment, either in the form of a letter of credit or bond.

“Landowners do have the ability to veto these projects being built on their land,” Wilson said.

“So that puts a lot of pressure on our members to ensure that landowners do feel comfortable with the terms.”

Sara Hastings-Simon, an expert in energy, innovation and climate policy at the University of Calgary’s School of Public Policy, said it’s understandable that municipalities have concerns.

However, she said it’s odd that there’s a push to enforce new regulations for the renewable sector, when the scope of the orphan well problem shows the oil and gas regulatory system could also use an overhaul.

According to the Alberta Energy Regulator, there are more than 83,000 inactive oil and gas wells in the province currently, and close to 90,000 more that have been sealed and taken out of service, but not yet fully remediated.

A report released last year by the Parliamentary Budget Officer estimated that the cost of orphan well clean-up in Canada will reach $1.1 billion by 2025.

“Obviously we need to make sure that all of our industrial development is done in a way that doesn’t offload costs to the public,” Hastings-Simon said.

“But it would make a lot of sense for the province to look at energy development holistically, rather than just picking the one that right now perhaps has more growth.”

This report by The Canadian Press was first published Jan. 29, 2023.

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Canadian Energy Centre

Canada remains on the sidelines as global competitors double down on energy projects

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By Deborah Jaremko of the Canadian Energy Centre

From the Taliban to Russia, billions in oil and gas investment underway around the world

As Canada’s oil and gas industry faces the uncertainty of a looming emissions cap and a “Just Transition,” billions of dollars of investment is underway in other countries to grow oil and gas supply for the future.  

Here’s just a handful of examples.

Afghanistan – Amu Darya basin  

US$690 million 

Xinjiang Central Asia Petroleum and Gas Co. 

Afghan Deputy PM Mullah Abdul Ghani Baradar at a news conference in Kabul announcing an oil development agreement with Xinjiang Central Asia Petroleum and Gas Co. Photo: Twitter/Zabihullah Mujahid

In January, Chinese state-owned Xinjiang Central Asia Petroleum and Gas Co. signed a deal with the Taliban-controlled Afghanistan government to invest nearly US$700 million over four years on oil development in the country’s north. 

The 25-year contract also involves building Afghanistan’s first oil refinery.  

The Taliban militant group returned to power in Afghanistan after the withdrawal of U.S. forces in 2021. Its ownership share of the oil project will gradually rise to 75 per cent, according to spokesman Zabihullah Mujahid.  

The Taliban maintains close ties with the terrorist group al-Qaeda, according to the Council on Foreign Relations (CFR). Since resuming its rule in Afghanistan, authorities have resumed public floggings and executions, violently cracked down on protesters and activists, “obliterated” women’s rights, and “enforced prohibitions on behavior deemed un-Islamic,” the CFR says.  

Brazil – Santos Basin 

TotalEnergies 

US$1 billion 

Map courtesy TotalEnergies

France-based TotalEnergies announced in January it will go ahead with a US$1 billion expansion of oil production offshore Brazil. 

The development is located about 300 kilometres off the coast in the Santos Basin. TotalEnergies, which has operated in Brazil for more than 40 years, is 45 per cent owner along with partners Shell, Repsol and Sinopec.  

The project will consist of three new deepwater wells connected to an existing floating production and storage vessel. It is expected to increase production to 60,000 barrels per day in 2025, up from about 35,000 barrels per day today.  

Norway – Norwegian Continental Shelf 

Aker BP 

US$29 billion 

Rendering courtesy Aker BP

Oslo, Norway-based Aker BP and its partners filed formal plans in December for four offshore oil and gas projects on the Norwegian Continental Shelf. 

A total investment of nearly US$30 billion, the developments are expected to increase Aker BP’s oil and gas production to around 525,000 barrels per day in 2028, compared to 400,000 in 2022. 

The company’s strategy is to meet the world’s growing need for energy while simultaneously contributing to reducing emissions, said CEO Karl Johnny Hersvik. 

The projects are enabled by a 2020 government stimulus package that “allowed oil companies to embark upon new commitments,” he said. 

Qatar – North Field East LNG expansion 

Qatar Energy 

US$29 billion

Qatar’s Minister of State for Energy Affairs and QatarEnergy CEO Saad Sherida al-Kaabi (R) and TotalEnergies CEO Patrick Pouyanne announce partnership in the giant North Field East LNG project at the QatarEnergy headquarters in Doha on June 12, 2022. Getty Images photo

One of the world’s largest LNG exporters is expanding its capacity with the largest LNG project ever built.  

State-owned QatarEnergy’s US$29 billion North Field East Expansion will increase the country’s LNG export capacity to 110 million tonnes per year, from 77 million tonnes per year. Startup is expected in late 2024.  

A planned second phase of the project will further increase capacity to 126 million tonnes per year. QatarEnergy’s partners include Shell, TotalEnergies, Exxon Mobil, ConocoPhillips and Eni.  

World LNG demand reached a record 409 million tonnes in 2022, according to data provider Revintiv. It’s expected to rise to over 700 million tonnes by 2040, according to Shell’s most recent industry outlook.  

Russia – Vostok Oil  

Rosneft  

US$170 billion  

Russian President Vladimir Putin and executives with state oil company Rosneft present a major shipbuilding complex to Indian Prime Minister Narendra Modi. India will be an investor in a new US$170 billion oil project in the Russian Arctic. Photograph courtesy Rosneft

Despite the war in Ukraine and wide-ranging energy sanctions, Russian state-owned oil company Rosneft says work continues to advance on schedule for the massive Vostok oil project.  

The US$170 billion project will use the Northern Sea Route to export about 600,000 barrels per day by 2024. Production is expected to increase to two million barrels per day after the second phase.  

Rosneft reports that as of mid-2022, more than 1,000 units of special construction equipment are in operation, as well as seven new Russian arctic class drilling rigs, with another five on the way. Over 4,000 people and 2,000 vehicles have been mobilized.  

“This means that the project lives and develops as planned, the inevitable difficulties are being overcome, but we have full confidence that all the tasks will be completed,” Rosneft CEO Igor Sechin said. 

“In the context of decreasing investment in the oil and gas sector, Vostok Oil is the only project in the world capable to provide a stabilizing effect on the hydrocarbon markets.” 

From the Canadian Energy Centre Ltd. 

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