Energy Update: Week of April 3rd

Friends,

Welcome to April and DC’s Cherry Blossoms have popped.  I know California is NOT looking forward to April showers although I heard they are now skiing at Mammoth until July. MLB baseball is underway and with the completion of the Texas Valero Open in San Antonio, now it is Masters Week in Augusta.

The Biggest News First: Tom Kuhn plans to step down as EEI President and CEO after more than 30 years of leading the association that represents all U.S. investor-owned electric companies.  Second: OPEC+ members on Sunday announced plans to reduce oil production by 1.16 million barrels per day, an unexpected decision that sent oil prices up by 7% and annoyed almost everyone.

After passing its Energy Legislation HR 1 last week, Congress is out for Passover and Easter these next two weeks. While HR 1 is a lot of messaging that is D.O.A. in the Senate, one thing to follow are the minor/bipartisan permitting reforms in HR 1, which puts them in the “House-passed” category. This becomes interesting if the Senate moves on any bipartisan effort on permit reform – especially if the House struggles to move forward with the efforts being led by Reps. Westerman and Peters.

We also finally saw the anxiously awaited EV tax credit guidance from Treasury which seemed to make everyone mad – including Senate Energy Chair Joe Manchin, who unloaded as a main speaker at the SAFE Summit on critical minerals and supply chains last Wednesday. The Treasury's complex domestic sourcing requirements will make it more difficult for many EVs to qualify for the $7,500 tax credit, at least in the short term, as they attempt to incentivize EV purchases while not angering the nation's closest trading partners. 

Finally, EPA is issuing a decision that grants two requests for waivers of preemption regarding four California Air Resource Board (CARB) regulations related to California’s heavy-duty vehicle and engine emission standards. While this is interesting, don’t be fooled into thinking this will make electric trucks any more viable. Given battery size, weight, payload, refueling time and range, they are very challenged, unlike hydrogen, which remains a much better option for long-haul, heavy-duty trucking. 

As for events, the White House plans to host the Energy Communities Summit tomorrow, featuring Energy Secretary Jennifer Granholm, Treasury Secretary Janet Yellen, National Economic Council Director Lael Brainard, senior adviser to the president for clean energy innovation John Podesta and national climate adviser Ali Zaidi.

Also tomorrow, the EU-US Energy Council holds its Ministerial Meeting. In a letter to key leaders, LNG Allies and EuroGas urged both administrations to recognize the need for increased support to deliver secure and regular volumes of US LNG with the lowest carbon and methane footprints possible to the EU. I will forward the letter if you want to see it; let me know.

Congrats to LSU who just had too much for Iowa yesterday to win the NCAA Women’s Final Four. Also, props to undefeated Transylvania University (KY) for knocking off Christopher Newport U (VA) to win the DIII Women’s Final Four.  CNU did take the Men’s DIII Championship with a buzzer beater win over Mt. Union (OH).  Ashland (OH) took the Women’s DII Championship while Nova Southeastern (FL) took the Men’s DII title to finish an undefeated season. San Diego St and Connecticut tonight at 9:00 p.m. from Houston which also is Jim Nantz’s Final Four Swan Song. Frozen Four starts Thursday with BU-Minnesota, followed by Michigan-Quinnipiac.

                                                                                                                                          

FRANKLY SPOKEN   

“For decades, Tom Kuhn has been one of the nation's premier energy leaders, and his passion to effectively address important energy issues for our customers and our country is admirable. Tom has led our industry on many critical public policy and operational initiatives, including our robust safety and mutual assistance programs, the clean energy transition, enhancing the reliability and security of our energy grid, and diversity, equity, and inclusion, just to name a few. Tom's vision, energy, leadership skills, and ability to work with policymakers and key stakeholders in a non-partisan and collaborative manner have delivered significant long-term benefits to our industry, the customers and communities we serve, and our country. We are extremely grateful for his extraordinary service.””

EEI Chair Warner Baxter, executive chairman of Ameren Corporation, speaking of Kuhn’s immeasurable impact on EEI and the electric power industry.

 

ON THE PODCAST

AFPM Talks E15 – In the latest Capitol Crude podcast, American Fuel & Petrochemical Manufacturers Senior Director of Fuel and Vehicle Policy Patrick Kelly joins host Jasmin Melvin to lay out challenges the group sees with this call for a new Midwest gasoline blend. He also provided his take on calls for emergency waivers and legislation to address the provision of E15.

S&P Chats with Plug Power on Green Hydrogen – More from the S&P podcast vault, Energy Evolution co-host Taylor Kuykendall spoke with Plug Power General Manager of Energy Solutions and Chief Strategy Officer Sanjay Shrestha during the CERAWeek by S&P Global conference in Houston in early March. Tune in to their conversation about challenges in the hydrogen space, building out hydrogen supply chains, and the policy environment for green hydrogen projects.

 

FUN OPINIONS

NY Official Highlights Potential New Focus on Electrification – In an op-ed in Utility Dive, former CEO of AEMO, the national grid operator of Australia, and former chairwoman of the New York PSC Audrey Zibelman write With Victoria Harman that Inspired by the Rural Electrification Act of 1935, they suggest investing a portion of federal energy transition funding, jointly with private capital to support the creation of not-for-profit electrification cooperatives nationally. These co-ops would have the responsibility and platform to work directly with individual owners and representative communities wishing to electrify and use clean technology and resources to make their homes and businesses more efficient, healthier, and affordable, while providing equitable access.

Reps Highlight Value of Energy Legislation – In an op-ed in the Washington Examiner, U.S. Reps. John Curtis (R-UT) and Mariannette Miller-Meeks (R-IA) write Lower Energy Costs Legislation will provide affordable, reliable, and clean energy. We support policies that can lower energy costs for people, help our nation become energy independent, and lower global carbon emissions. This legislation is an opportunity for the United States to reemerge as a global leader and power the world with our clean resources, all while creating more jobs at home. It’s past time for the U.S. to rise to the occasion and provide clean, affordable, and reliable energy to the world. If we can set the standard, other nations are sure to follow.

 

FROG BLOG

Fannon: US Need to Not Provide Loopholes in IRA for China, Others – In a blog post for the Atlantic Council, former State Department Energy official Frank Fannon writes we cannot continue to recognize China for clean tech cost reductions without acknowledging – and condemning – how they achieved those reductions: through state-sponsored intellectual property theft, human rights abuse, environmental destruction, and predatory investment practices. The administration should build on that rare bipartisan consensus. The U.S. should close loopholes and clearly prohibit American taxpayer funds from benefitting our greatest strategic adversary. To do otherwise could politically imperil and substantively undermine the spirit of the IRA – to increase American security and clean energy revolution.

Hurricane Flaw in IPCC – Thanks to our friend and former science reporter from the NY Times, Andrew Revkin for this piece on Hurricanes and climate: Roger Pielke, Jr. of the University of Colorado has posted this valuable piece (with some humor, too) on how a flawed conclusion on tropical cyclone/hurricane trends and causes ended up in the latest IPCC report synthesis. He links, among other references, to a 2021 paper on Atlantic basin hurricane activity showing the vital need for tracking dynamics over many decades: "increases in basin-wide hurricane and major hurricane activity since the 1970s are not part of a century-scale increase, but a recovery from a deep minimum in the 1960s–1980s." More on Atlantic hurricanes from Revkin HERE. 

 

FUN FACTS

NatGas Heavy in 3 Regions: Three US regions — Appalachia, Permian and Haynesville — accounted for 60% of all US production in 2022, just like in 2021. Insert: EIA’s monthly NG production, by region (as a percentage share of total US production)

 

IN THE NEWS                  

LNG Groups Urge Admin, EU to Support LNG, Long-Term Contracts – In view of the forthcoming EU-US Energy Council Ministerial Meeting tomorrow, LNG Allies and EuroGas urge both administrations to recognize the need for increased support to deliver secure and regular volumes of US LNG with the lowest carbon and methane footprints possible to the EU in a letter to key leaders. “It is important that the administrations reaffirm the role of natural gas as a critical component of energy security in the energy transition and ensure the delivery of US LNG in accordance with the March 2022 US-EU Energy Security Taskforce declaration. We also call for support for more long-term LNG contracts to be signed through providing better visibility on the mid-term future of natural gas in the EU.”  The letter was sent to Sect of State Blinken, Energy Sect Granholm, EU High Representative Josep Borrell Fontelles, Vice-President of the European Commission Maroš Šefčovič, European Energy Commissioner Kadri Simson.  If you are interested, I will send you the letter.

ACI Launches “Cleaning Chemistry Catalog”, Online Resource for Ingredient Safety – The American Cleaning Institute (ACI) kicked off National Cleaning Week (March 26 - April 1) by launching a redesigned database for the Cleaning Chemistry Catalog (C3), a resource that provides information related to the safety of ingredients used in household cleaning products. Originally launched in 2012 under the name Cleaning Product Ingredient Safety Initiative, the Cleaning Chemistry Catalog illustrates how safety assessment data from publicly available sources can be incorporated into a screening risk assessment for household cleaning product ingredients. The database now provides human and environmental health screening level risk assessments for more than 1,100 ingredients. The new database offers a new name, look and feel, increased functionality and search, and combines human and environmental health data in one location. Additionally, information from ACI’s ‘What Cleaning Ingredients Do', which provides consumer-tested ingredient function descriptions, has been included in C3 to provide enhanced understanding and an opportunity to standardize industry language, applicable across brand and product websites, education resources and packaging. This relaunch during National Cleaning Week is part of an overall effort to raise the visibility and accessibility of cleaning product ingredient information. ACI has declared the theme for the week “Understanding Clean” and will be sharing resources, including C3, designed to enhance understanding about the cleaning products consumers bring into their homes.

HR 1 Passes, But What is the True Value of It –House Republicans passed their signature energy package yesterday which will deliver lower emissions, lower costs, and more energy independence. While it Is likely dead on arrival in the Senate because of many of the “messaging” elements of it, there is true value in passing the permitting provisions, which are less controversial.  That value lies in the fact that the House now has permit elements in passed legislation should efforts to pass a broader bipartisan effort (lead by members like Bruce Westerman or Scott Peters) fail or fall short. It is especially important If the Senate acts on any bipartisan effort, which seems more likely given the interest among all factions of the Senate, including a significant number of Senate Climate Hawks that know they need permitting reform to speed the energy transition. So, keep that in mind as you look at HR 1.

Cheniere Looks to Expand LNG in TX – Cheniere Energy has formally requested permission from the Federal Energy Regulatory Commission to add two mid-scale liquefaction trains to its Corpus Christi LNG export plant in Texas, thereby increasing its production capacity by 3.61 million short tons per year. The company has already secured the necessary commercial support and anticipates receiving FERC approval by Sept. 27, 2024, with construction starting shortly thereafter and potentially lasting four years.

EIA releases consumption, expenditures data from Residential Energy Consumption Survey – US households on average consumed less energy in 2020 than in 2009, according to newly released data from EIA’s Residential Energy Consumption Survey (RECS). RECS data show that households used an average of 76.8 million British thermal units (MMBtu) of energy, including electricity, natural gas, propane, and fuel oil. That consumption is relatively consistent with the 2015 RECS estimate but is a significant decrease from the 89.6 MMBtu used by households in 2009. For the first time, EIA has gathered energy use data for households in all 50 states and DC. This new data series from the 2020 RECS includes consumption and expenditures for electricity, natural gas, and petroleum fuels used in homes. The uses of each fuel vary considerably across states. In Florida, for example, electricity accounts for 94% of household energy use. In Illinois, where natural gas is widely used, electricity accounts for just 29%.Notable takeaways from the 2020 RECS results for the estimated 123.5 million homes in the US include:

• U.S. households spent an average of $1,884 on energy in 2020.
• In 2020, households in places where the climate required more heating consumed more energy on average. For example, households in Alaska used an average of 125.1 MMBtu of energy.
• In Hawaii, where only 57% of households use air conditioning and 5% use space heating equipment, households used 30.3 MMBtu of energy on average—the lowest consumption per household in the United States.
• At the national level, households use similar shares of electricity and natural gas (47% and 45% of total consumption), but those shares vary widely across states.
• Households in the South used the most electricity, 13,376 kWh on average in 2020. Southern homes are more likely to have air conditioning and to use electricity for heating than other regions.
• Newer homes consumed less energy per square foot than older homes in 2020. Households living in homes built before 1950 used 51.3 MBtu per square foot, compared with 31.2 MBtu per square foot for homes built in 2016 or later. This difference in energy use translates to higher costs per square foot as well: $1.14 per square foot for homes built before 1950 compared with $0.82 per square foot for homes built in 2016 or later.
• Consumption of natural gas varied by housing unit type. Households living in single-family detached homes, which tend to have more square footage, used an average of 669 hundred cubic feet of natural gas annually, compared with households living in apartment units in buildings with five or more units, which used an average of 224 hundred cubic feet.
• Household expenditures on fuel oil were highest in the Northeast. In Connecticut, fuel oil accounts for 20% of all residential energy expenditures in the state.

Interior Offshore Sale Largest in Since 2017 – Interior raised $263.8 million in an offshore oil and gas lease sale in the Gulf of Mexico — the largest amount in six years on Wednesday. 32 companies bought leases covering 1.6 million acres of offshore federal holdings on 313 tracts of offshore acreage, the most tracts in the Gulf of Mexico in nearly a decade, according to data BOEM. The sale brought the most money into government coffers since a $274 million lease sale for the Central Gulf of Mexico earned in March 2017. API said the lease sale “a positive step toward a more energy-secure future” and called on the administration to finish the five-year plan. “It is well past time for the Department of the Interior to finalize a five-year program for federal offshore leasing that will empower U.S. energy producers to meet the needs of consumers here at home and around the world,” Holly Hopkins, API's vice president of upstream policy,

 

 

ON THE SCHEDULE THIS WEEK

Brookings Looks at Social Cost of Carbon – This morning at 11:00 a.m., the Hutchins Center on Fiscal and Monetary Policy at Brookings convened a panel to explain why putting a number on the social cost of carbon is so important. Participants included New York Times reporter Coral Davenport, Noah Kaufman of Columbia, RFF’s Brian Prest and Glenn Rudebusch of Brookings.

Hydrogen Conference Features bp Hydrogen Speaker – The S&P Global Hydrogen Markets Americas Conference will be held on today to Wednesday in San Diego.  The event gathers hundreds of energy professionals from across North America to discuss the growth of hydrogen as part of the move toward de-carbonization. Keynotes include bp’s head of Hydrogen North America Tomeka McLeod and Air Products VP for Hydrogen Mobility Eric Guter.

Malpass to Chat World Bank at Atlantic Council – The Atlantic Council GeoEconomics Center is hosting an AC Front Page event featuring David Malpass, president of the World Bank Group, on April 4, 2023 at 10:00 am. Malpass will participate in this keynote event at the Atlantic Council studios one week before the world’s finance ministers and central bank governors convene in Washington for the World Bank-International Monetary Fund Spring Meetings.

Forum Looks at Hydrogen, Methane Detection – Tomorrow at 11:00 a.m., the US Energy Association holds a forum to provide an introduction to novel hydrogen and methane detection technologies. Hydrogen Naturally, Inc. has found the key to removing gigatons of carbon from the atmosphere: power facilities and communities with Bright Green™ Hydrogen made from residual forestry waste fiber. Boilermakers’ climate advocate Cory Channon joins Hydrogen Naturally’s Ian MacGregor.

Air Pollution Control Conference Set for OKC – The Association of Air Pollution Control Agencies’ (AAPCA) holds its 2023 Spring Meeting tomorrow to Thursday at the Sheraton Oklahoma City Downtown Hotel.  AAPCA’s 2023 Spring Meeting will feature presentations from state and local air quality agencies, U.S. EPA, and other air quality professionals on timely Clean Air Act topics.

Innovation in Hard to Abate Sectors – The American Security Project holds a virtual discussion tomorrow at 12:30 p.m. on innovating out of climate challenges in the hard to abate sectors.  The event will focus on heavy industry, including steel, cement and chemical manufacturing. Our friend Jeremy Harrell of ClearPath speaks. 

Forum to Look at EV Infrastructure – The ASU Consortium for Science Policy and Outcomes holds a forum on Wednesday at 9:00 a.m. at its Barrett & O'Connor Washington Center to look at how to solve electric vehicle charging infrastructure. A paradigm shift needs to occur if we hope to effectively transition to electric vehicles - electric vehicle charging policy should focus on the quantity of chargers, as opposed to the quality of chargers.

WaPo Looks at Sustainable Cities – The Washington Post Live holds a forum on Wednesday at 9:00 a.m. featuring a series of conversations with key public officials, experts and activists leading the charge to build greener cities, invest in the clean energy economy and incentivize citizens to live sustainably. Brenda Mallory, chair of the White House CEQ, will be a speaker.

JHU Looks at ESG – The Johns Hopkins University Paul H. Nitze School of Advanced International Studies holds a discussion Wednesday at Noon on de-mystifying environmental, social and governance issues. The event will provide a company, investor and regulatory perspective. Speakers include Dell’s Macani Toungara, Jade Huang at Calvert Research and Management and Bryan McGannon of the U.S. Sustainable Investment Forum.

NASA to Look at Asir Pollutant Analysis – The National Aeronautics and Space Administration holds a conference call briefing on the upcoming launch of TEMPO (Tropospheric Emissions Monitoring of Pollution instrument), the first space-based instrument to observe major air pollutants across North America every hour during the daytime.

Forum Looks at Carbon Capture – On Thursday at 10:00 a.m., the Atlantic Council Global Energy Center holds the next episode of its EnergySource Innovation Stream when the Global Energy Center will host Calli Obern, director of public policy and stakeholder engagement at Capture6, to discuss the company’s approach to carbon removal. This series highlights energy innovations with the potential to reshape the global energy system through discussions with the companies and individuals working diligently to enable those innovations to impact and accelerate the energy transition.

Forum Looks at Circular Carbon Economy -- On Thursday at 1:00 p.m., the Institute for Carbon Removal and Policy holds a forum on transitioning to a sustainable, circular carbon economy by converting waste into essential chemicals, fuels and products. This event will feature a representative from carbon transformation industry leader, LanzaTech, on transitioning to a sustainable, circular carbon economy by converting waste into essential chemicals, fuels, and products.

Forum Looks at Critical Minerals – The Institute for Policy Studies holds a virtual discussion Thursday at 5:00 p.m. on the geopolitics of critical minerals. The event Features Debamanyu Das, a doctoral candidate in the Department of Economics at UMass-Amherst. His research focuses on the political economy of critical minerals used for the green transition.

 

IN THE FUTURE

MIT Energy Conference Set – MIT holds its annual energy conference on Tuesday and Wednesday April 11^th and 12^th in Boston. The event brings experts across the three key fields of technology, finance, and global policy to discuss critical solutions that will shape the future of the energy landscape, particularly during this time of uncertainty, urgency, and hardship. Our friend Laura Parkan of Air Liquide will speak.

CGEP to Host Granholm – To kick off the celebration of its 10^th anniversary, Columbia Center for Global Energy Policy (CGEP) will host a special 10^th Anniversary Global Energy Summit on Wednesday April 12^th where they will discuss turbulence in global energy markets, the growing gap between climate ambition and reality, and the tensions between today’s energy needs and tomorrow’s energy transition imperative. Speakers include Energy Sect. Jennifer Granholm, NRDC CEO Manish Bapna and BlackRock Investment Institute chair and former US National Security Advisor Tom Donilon, among others.

Forum Looks at Climate, Education – On Wednesday April 13^th, the Center for Universal Education (CUE) and the Global Partnership for Education (GPE) will co-host an event at the Brookings Institution to help advance discourse on climate change and the education nexus. At the event, GPE will launch the Climate Smart Education Systems Framework, which outlines a concrete action agenda to strengthen the resilience and relevance of education to climate change and environmental degradation. Through channeling diverse voices on the topic—including youth leaders, a minister of education, other policymakers, and civil society organizations—the event seeks to foster a rich and inclusive conversation that not only brings each dimension of the framework to life, but also inspires new ideas and approaches to build climate-smart school systems.

G7 Energy Ministerial Set – The G7 holds its Energy Ministerial on April 15^th and 16^th in Sapporo, Japan. The 2023 Group of 7 (G7) Ministers’ Meeting on Climate, Energy and Environment will take place under the Japanese G7 Presidency, and consider priority issues in the areas of climate, energy, and the environment. Recently, the U.S. Chamber and other organizations sent a letter to Japanese Prime Minister Fumio Kishida following a meeting held with G7 nations on the sidelines of the CERAWeek conference regarding the inclusion of a discussion about the role of natural gas at the upcoming G7 meeting hosted by Japan

Power Conference Set – The 38^th Platts Global Power Markets Conference is set for The Wynn in Las Vegas on April 17-19^th.  The event brings together leaders from utilities, regulators, finance and more to discuss the trends moving the power markets forward. Keynote speaker is Xcel Energy CEO Robert Frenzel to discuss his views on sustainability and how companies are generating clean, affordable, and accessible energy, as well as what lies ahead. Other topics include trends and opportunities around infrastructure, the IRA and its implications, wholesale power markets, global and emerging power market investment, supply chain challenges, impact of global energy market upheaval and much more.

Reed to Talk China – The Center for a New American Security holds a fireside chat with Senator Jack Reed (D-RI), Chairman of the Senate Armed Services Committee on Monday April 24^th at 3:00 p.m. The event will be moderated by Dr. Stacie Pettyjohn, Senior Fellow and Director of the CNAS Defense Program. Senator Reed will outline his priorities for the Department of Defense. Then the conversation will cover a range of issues, including the challenge posed by China, ongoing support to Ukraine, AUKUS, and the health of the defense industrial base.

FP Hosts Climate Summit – On Wednesday April 26^th, Foreign Policy holds its third annual Climate Summit, where they will convene climate-minded leaders and experts for high-profile discussions on maintaining momentum from COP27 and following through on commitments. With a focus on achieving net-zero, addressing climate justice and the logistics of implementation, this event will look at the first steps of making the world’s answer to climate change a reality. The event will also explore how governments and organizations are making progress, identifying, and implementing best practices and navigating the road ahead to COP28.

BioGas American Set for Chicago – The American Biogas Council holds 2023 BioGas Americas in Chicago at the Sheraton Grand Chicago Riverwalk on May 15^th to 18^th. The event is the biggest event in the US for biogas/RNG.