US to sell part of their offshore oil drilling rights
On Wednesday a part of the Gulf of Mexico, the size of Italy, was put for auction to sell the oil and gas drilling rights. the area auctioned is 73.3 million acres, was made available to drilling companies, less than a month. The sale, known as lease 259, has the potential to extract more than 1 billion barrels of oil. The going rate for a barrel of oil at current is $77. This means the oil field has the potential to gross $77 billion dollars. There were 32 fossil fuel companies involved in the auction, collectively bidding $309.7 million for drilling rights. This opens a new market for the oil industry and the big players.
The auctions come just two weeks after President Joe Biden’s approved the controversial Willow project, a drilling endeavor in the remote tundra of Alaska’s arctic that will remove more than 600 million barrels of oil over its lifetime, and the two actions have caused major alarm among those in favor of a livable climate, including Biden’s usual allies. For this current deal, Climate campaigners mostly considered the trade-off to be worthwhile as the resulting emissions cuts should still be large. However, the new push for oil extraction could wipe out much of the benefits of wind and solar projects over the next decade.
One would assume the American Oil companies would place more favorable to earn these contracts. If the US government do not earn a percentage of future sales, then they would be missing out on large capital.
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US and Japan ink trade deal for EV battery materials
The U.S. and Japan have signed a new trade deal around critical resources for battery production, which is meant to strengthen the supply chains for electric vehicles. The deal is designed to promote competition, labor and environmental standards. In addition to cooperative efforts between the U.S. and Japan to procure sustainable mineral supplies, according to the press release from the U.S. Trade Representative’s office.
The commitments between the two countries include: An agreement not to impose duties on critical minerals. Best practices for reviewing investments from foreign entities within their territories. Measures promoting circular approaches to mineral supply to reduce the demand for virgin material extraction. Information-sharing and enforcement actions on labor rights in mineral extraction and processing. Pushing for employer neutrality in union organizing.
The bill is expected to raise demand for electric vehicles (EVs) through tax credits for consumers who buy vehicles that are assembled in North America. The credits also come with rules, still being finalized, requiring at least half of battery components to be sourced domestically or from allied countries (most likely NATO). However, ultimately to be fully sourced from North America.
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EU agrees to ramp up 2030 renewable energy targets
The European Union (EU) is set to ramp up its 2030 renewable energy targets, accelerating a shift away from fossil fuels as its members seek to rapidly cut emissions and reduce its dependence on Russia. Negotiators from the European Council and Parliament on Thursday reached a provisional deal to source 42.5% of the 27-nation bloc’s energy from renewable technologies such as wind and solar by the end of the decade, EU lawmaker Markus Pieper said via Twitter.
This need to cut dependence on Russian energy has been talking point since the invasion of Ukraine a year ago. Although energy prices sored as a result of the economic sanctioned placed upon Russia, the EU is now formulating a clear plan of action to adopt alternate fuels. January saw the EU’s new Liquified Natural Gas price plans, the assessment produced a stable price for LNG. This is to reduce the need for EU countries to bid against each other for supply, potentially driving prices up further. A standard price should boost trade and increase the popularity of using alternate fuels such as LNG in the European supply chain.
The EU has said it aims to be carbon neutral by 2050. In the medium term, it wants net greenhouse gas emissions to be cut by at least 55% by 2030, which the EU calls the Fit for 55 plan.
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