Energy Update: Week of December 21

Friends,

“So this is Christmas”…goes the John Lennon song.  And it is crazy times for at least a couple more days here in DC as Congress locks up the big COVID, spending, tax and energy deals.  It sounds like they have hammered out everything and are now just running the final administrative traps to lock it up, finalize it and get it to the President, who has said he will sign it.  It sounds like the tax package will address some short terms extensions while the energy legislation includes the HFC phasedown, the USE-IT act for CCS, PHMSA pipeline reauth, advanced nukes, energy storage and much, much more.  In fact, the HFC phasedown bill becomes the first “real” climate bill to pass Congress (and would reduce 0.5C in global temps) and the overall energy legislation is the biggest energy bill passed since 2007.  Full language just emerging HERE.  We have experts who can discuss the action, its impacts and will provide a full update as the details become readily available.  I also have including a couple statements (US Chamber GEI & AHRI) right after the lead-in and expect more in the next day or so as votes start to occur.

So, I also read Amy Harder’s column in Axios Generate on Friday and man, it really hit home because I have been talking about this approach to climate change since 1997.  Basically, Amy spoke to physicist and former top executive at a large renewable energy company in India, Varun Sivaram, who is now an expert at Columbia University. Sivaram calls it the 5% and 95% problem.  Most debate/policy work in the US focuses on how we can reduce our emissions, including P-E Biden’s 2050 goal for net-zero emissions and many companies/states that are setting similar goals. Sivaram says that is only tackling the 5% problem.  It is important, but it is not the 95% of future cumulative emissions outside of the US.  Sivaram argues that its initiatives need to speed global transitions to cleaner energy, not just domestic progress. In other words, tackle the 95% problem and the 5% problem.  I highlight this because this underscores ways that the International community can actually work together to address climate challenges through innovation and tech transfer programs. Making this approach succeed is the missing piece that is rarely discussed currently is at the bottom of the solutions list when you start thinking about the Paris Agreement.

Speaking of climate, the Biden team trickled out in leaks last week which filled the news. He rolled out the team formally on Saturday. Gina McCarthy is a formidable leader of the group on the domestic side (of course, her appointment does not require Senate confirmation).  Key items for the other confirmations will be more details from EPA nominee and relative-unknown Michael Regan on many of his key positions on CAFOs, ethanol, coal ash reuse, etc. and how much Senate Republicans challenge Interior nominee Deb Haaland for her inexperience (an issue that concerned the Biden team too) and a number of statements she has made in her short tenure in Congress.   

Finally, forgot last week to offer congrats to Heather Zichal for taking the helm of America’s Clean Power, a group founded by merging AWEA and a number of other clean energy groups.  That will be a fun job (or maybe not fun, but definitely interesting) and Heather is an excellent choice…

I watched the college football games over the weekend and I have to say, I wasn’t that impressed.  Just not that interested this season. I was really interested to finally hear the NHL returns in January for a 56-game season, with a new alignment that will include and all-Canada division. I also did enjoy the PNC Golf Classic which featured father-son/daughter teams including Tiger Woods and his 11 year-old son Charlie (he can play!). Justin Thomas and his dad won the tournament shooting a final round 57 in the scramble format.

Well 2020 has been quite a year.  I hope you enjoy your holidays and get ready for a refreshed 2021!...Stay tuned for more details on the COVID/Spending/Energy legislation and feel free to call with any questions.  As Tom Petty says, “The waiting is the hardest part!” Stay safe & healthy.

Best,

Frank Maisano

(202) 828-5864

C. (202) 997-5932

 

KEY COMMENTS ON ENERGY PACKAGE APPROVED IN COVID, SPENDING LEGISLATION

US Chamber – Marty Durbin, senior vice president of policy at the U.S. Chamber of Commerce, issued the following statement today applauding the news that House and Senate negotiators have reached an agreement to include climate and energy innovation legislation in their year-end omnibus appropriations package.

“Passing a climate and energy innovation bill has been one of the U.S. Chamber’s top priorities this Congress. Today’s announcement of an agreement on this package is truly historic—setting up the biggest action Congress has ever taken to address climate change, and the first energy bill in 13 years.

“This package demonstrates the progress that is possible when businesses, environmental groups, labor and policymakers work together to find solutions on difficult issues. Over the last few years, we found a great deal of cynicism that a bill like this could actually get done. But passage of this bill will prove that there is common ground on which all sides of the debate can come together to begin to address climate change, promote American technological leadership, and foster continued economic growth.

“The Chamber endorsed dozens of specific, innovation-focused bills during this Congress, with many of them included in this package. We worked closely with members of Congress and key committee staff on both sides of the aisle, and mobilized business community support for this bill, including several coalition letters that demonstrated support across a broad diversity of stakeholders.

“Why does the business community stand so strongly behind this bill? Because we know that the development and commercialization of technology is the single most important factor that will determine how quickly and at what cost greenhouse gas emissions can be reduced around the world. No emissions goal or degree target will matter if the technology essential to meet it is not developed and deployed. While the American business community has already committed billions to these efforts, the federal government can push these efforts to the next level. This includes support not just for near-term R&D, but also “moonshot” projects that are more difficult for the private sector to launch. This legislation delivers on this front, and on many others with support for carbon capture and sequestration, nuclear, geothermal, hydro, energy storage, and much more.

"We commend Congress for its inclusion of important innovation-enabling environmental policies that are a priority for the Chamber. These include the USE IT Act and the long-awaited phase down of hydrofluorocarbons (HFCs) consistent with the Kigali amendment, which itself will have a major impact on reducing emissions that contribute to global warming. We look forward to the adoption of this package in the coming days, and to the President’s signature.”

Air-Conditioning Heating & Refrigeration Institute – The Air-Conditioning, Heating, and Refrigeration Institute (AHRI) expressed its gratitude to House and Senate negotiators who included language in the just-passed Omnibus bill to bring about a national phasedown of HFC refrigerants.  The language included in the bill would bring about a national phase down of a class of refrigerants known as hydrofluorocarbons (HFCs) and allow for a market- and consumer-friendly transition to new and better performing refrigerants and related products and equipment.

“We are gratified that negotiators included this bipartisan, jobs-promoting language in the Omnibus bill and we are grateful to the Senate and House champions who worked so hard to see it accomplished, and to the House and Senate for passing the bill” said AHRI President & CEO Stephen Yurek. “Our industry has been working toward this goal for more than 10 years and it is very exciting to see our vision of an HFC phasedown reach the home stretch. We are hopeful that President Trump will quickly sign the bill so we can pivot toward implementation.”

According to a 2018 study by Interindustry Forecasting at the University of Maryland (INFORUM), an HFC phasedown will create 33,000 new manufacturing jobs, increase direct manufacturing output by $12.5 billion, and increase the U.S. share of the global HVACR export market by 25%.

FRANKLY SPOKEN

“We don’t have enough electricity on the grid now. And they want to ban natural gas?”

Jennifer Hernandez, an attorney for The Two Hundred, a coalition of Latino civil-rights leaders who have sued the state of California over its energy and housing policies.

ON THE PODCAST

CA State Rep Blasts Enviro Groups, Impacts on Minorities – On last week’s episode of the Power Hungry Podcast, Columnist and energy author Robert Bryce interviews California State Assemblymember Jim Cooper, who was recently sworn in for his fourth term in the California Assembly serving his minority district in Sacramento.  Cooper told Bryce that the environmental groups that are pushing the bans on natural gas are showing “deliberate indifference” to the needs of California’s low- and middle-income consumers. “It’s outrageous,” he said.

FUN OPINIONS

CalMatters: Former Commissioner Takes on PUC Over Secret Deal – In an op-ed in Cal Matters, former California Public Utility Commissioner Timothy Simon writes despite natural gas’s demonstrated environmental and cost benefits, the California Public Utility Commission’s independent Public Advocates Office has allied itself with the Sierra Club to eliminate the use of natural gas. The recent discovery of a “common interest agreement” exposing this “partnership” between the Public Advocates Office and the Sierra Club is disturbing. This document calls for cooperation, confidentiality and, should discussions between these two entities break down, the destruction of documents among other activities. This agreement runs counter to the Public Advocates Office’s mission and puts in jeopardy its revered role of ratepayer advocacy and protection in CPUC proceedings.

US Needs to Pick Up Pace in Battery Arms Race – In a column in the Washington Examiner, former US chief of naval operations Jonathan Greenert and LS Power CEO Paul Segal write we are at risk of conceding battery technology leadership to China at a critical moment in global energy markets. The battery arms race is underway, and China has seized the early initiative and the U.S. is barely in the running at all.  Beijing has worked hard to control the battery supply chain, developing the largest minerals processing industry in the world. Chinese companies manufacture 83% and 61%, respectively, of the anodes and cathodes that go into batteries, and China is home to more than 70% of global EV battery manufacturing capacity. The U.S. holds less than 10%.  “Without concerted, comprehensive action, we could wake up 10 years from now and discover that we lost a race we didn’t compete in because we didn't appreciate its importance. Therefore, we must develop a minerals-to-markets solution.”

FROG BLOG

WSJ: Sierra Club has Hijacked Cal Independent Advocate on Nat Gas – In an opinion column, the Wall Street Journal writes that despite the high prices paid by California residents for electricity, the Public Utilities Commission’s Public Advocates Office has Dropped the ball on its statutory mandate “to obtain the lowest possible rate for service consistent with reliable and safe service levels.” Instead it’s busy trying to banish fossil fuels. Now two Democratic Assembly members who represent low-income and minority areas are investigating this apparent collusion. The Public Advocate’s stated mission is “in conflict with what appears to be a new focus . . . to aid the Sierra Club in their effort to seek the ban of natural gas usage in California even though it is proven to be favored by customers as a fuel source because of the affordable cost,” Blanca Rubio and Jim Cooper wrote Nov. 30 to the Utility Commission president. The Public Advocates shouldn’t be part of the Sierra Club’s campaign to banish fossil fuels, and ratepayers certainly shouldn’t be made to bankroll it.

Forbes: CA Grid Problems an Energy Tax on Poor – In a column in Forbes, energy expert and author Robert Bryce Blasts California for its reliance on a Third World Electric grid, adding that closure of Diablo Canyon nuclear plant and natural gas Bans will only make the situation worse.     About 86% of all the homes in California use natural gas. Banning the direct use of the fuel for cooking, home heating, water heaters, and clothes dryers, will force consumers to instead use more electricity which, on an energy-equivalent basis, costs four times as much as natural gas. Bryce writes that’s an “unconscionable energy tax in California, which has the highest poverty rate of any state in America.” 

IN THE NEWS

RFF Report: Innovative Energy Techs Will Save Billions – We know that congressional leaders have agreed on a clean energy package that reconciles the Senate’s American Energy Innovation Act (S. 2657) and the House’s Clean Economy Jobs and Innovation Act (H.R. 4447). As reported, the final legislation will lead to smarter, more targeted investments by the Department of Energy focused on outcomes, and the resulting technological innovation will provide options for both American and global energy systems to go clean and address the global emissions reduction challenges.  Thanks to the hat tip from our friends at ClearPath, last week Resources for the Future released a new analysis of advanced energy technologies included in the proposed legislation finding that cost reductions could lead to billions of dollars per year in benefits in the United States, with most of those benefits seen in lower consumer electricity bills. 

Princeton Report Shows Difficult Hill on Net Zero, Infrastructure – A major study released by a team of energy experts at Princeton University provides several exhaustively detailed scenarios for how the country could slash its greenhouse gas emissions down to zero by 2050. The study’s findings say reaching “net zero” by 2050 appears technically feasible and affordable, but a difficult climb. There are ways to get there that rely solely on renewable energy, as many environmentalists prefer, or that lean on other technologies such as nuclear power or carbon capture. Each approach carries different social and economic trade-offs.  The researchers identified a common set of drastic changes that the United States would need to make over the next decade to stay on pace for zero emissions. That initial groundwork has to start pretty much immediately.

MIT Study Says Transmission Will Make Major Difference to in Clean Energy Race – A new study published in Joule from researchers with MIT’s Energy Initiative says that expanding transmission lines across states and regions, as well as implementing a national process for coordinating regional grids, could cut the cost of obtaining carbon-free power by 46% compared with a state-by-state decarbonization process.  While sounding good, the practical challenge of grid operators working together across regions and the federal government driving transmission permitting and development remain significant flaws in the analysis that would have to be overcome. 

PPI Report Shows Increase Wind, Solar, Nat Gas – The Progressive Policy Institute is urging President-Elect Biden to “strike a new bargain” with oil and gas companies to encourage the decarbonization of natural gas. The institute released a report today arguing the Biden administration should embrace a role for gas in reaching its goal for carbon-free electricity by 2035, since an approach that relies entirely on renewables could lead to “high prices and low reliability.” “Washington would acknowledge and support the role gas plays in enabling rapid deployment of renewable energy in exchange for industry’s commitment to make consistent progress toward zero carbon emissions,” the report says. U.S. policymakers should work with industry to invest more heavily in carbon capture for gas plants, a nascent technology that has not been deployed in the U.S., and to adopt more ambitious goals to reduce methane emissions. Industry would accept stronger regulation of methane if Biden were to accept natural gas as a tool for decarbonization, the report argues.

USC Price Center Study Shows Many LA Renters Cut Back on Basic Needs to Make Rent – A new study from the USC Sol Price Center for Social Innovation finds a majority of renters surveyed in Los Angeles have cut back on critical basic needs like food, and nearly half took on additional debt in order to afford rent over the past two years.  The study documents the deep economic vulnerability of many city residents even prior to the COVID-19 pandemic. Three out of four households surveyed were rent burdened, meaning they spent over 30% of household income on rent and utilities. Nearly half of renters surveyed were severely rent burdened, spending over half their household income on rent and utilities.  The results suggest many Los Angeles renters were already living on the razor's edge of food insecurity and homelessness prior to the coronavirus crisis, with implications for other urban regions across the country. Researchers used the results from an in-person survey of 800 renter households in South and Central Los Angeles between January and October 2019. Conducting the survey in both English and Spanish, surveyors asked renters about their housing and economic situations and how rental costs impacted their lives.

Report: Fly Ash Use in Concrete Increases Slightly –The American Coal Ash Assn says 52% of the coal ash produced during 2019 was recycled –marking the 5^th consecutive year that more than half of the coal ash produced in the US was beneficially used rather than disposed. The volume of fly ash used in concrete increased 1 percent over the previous year, but most other uses saw significant declines, leading to an overall decrease in recycling activity of 31 percent.  According to ACAA’s just-released “Production and Use Survey,” 41 million tons of coal combustion products were beneficially used in 2019 out of 78.6 million tons that were produced. The rate of ash utilization decreased from 58.1 percent to 52.1 percent and the total volume of material utilized decreased by 18.4 million tons compared to the previous year. Coal ash production volume decreased 23 percent (or 23.6 million tons) from 2018 levels. 

Coal Ash Uses – “Coal ash” is a generic term that encompasses several Coal Combustion Products (CCP) that can be beneficially used in a wide variety of applications. Highlights of CCP production and use in 2019 include: 

• Use of coal fly ash in concrete increased 1 percent to 12.6 million tons. Concrete producers and consumers indicated a desire to use more fly ash, but several regional markets were affected by shifting supply dynamics associated with closures of coal-fueled power plants. Fly ash improves concrete durability and significantly reduces greenhouse gas emissions associated with concrete production. 

• Use of all coal combustion products in cement production declined 22 percent to 5 million tons.  
• Utilization of a key “non-ash” coal combustion product also declined. Synthetic gypsum is a byproduct of flue gas desulphurization units, also known as “scrubbers,” located at coal-fueled power plants. Use of synthetic gypsum in panel products (i.e. wallboard) declined 21 percent to 9.7 million tons. 
• Synthetic gypsum use in agricultural applications – in which the gypsum improves soil conditions and prevents harmful runoff of fertilizers – declined 38 percent to 572,399 tons.  
• Use of CCP in pond closure activities declined 26 percent to 2.4 million tons, but remained well above 2016’s total of only 435,000 tons. This activity is driven by utility compliance with coal ash regulations enacted in 2015 that effectively require an end to the practice of wet disposal. Fly ash, bottom ash, boiler slag, and synthetic gypsum were all used in construction of new permanent disposal facilities.  
• Following a one-year volume increase in 2018, use of CCP in structural fills resumed a multi-year decline in 2019, dropping 62 percent to 1.7 million tons. 
• Production of boiler slag declined 37 percent as the number of cyclone boilers producing this material also continued to decline. Approximately 246,000 tons of boiler slag was utilized in the production of blasting grit and roofing granules. Approximately 362,000 tons of bottom ash was used in this application, a huge increase over 2018’s utilization of only 27,000 tons and an indication that consumers have begun to shift away from the declining boiler slag resource. 
• Approximately 944,000 pounds of cenospheres were sold in 2019, down 21 percent from the prior year but still well above 2017’s volume of 148,000 tons. Increased cenosphere recovery was likely linked to increased pond closure activities. 

Environmental Partnership Launches New Program to Reduce Flaring – The Environmental Partnership last week launched its latest performance program, which is focused on reducing flaring in upstream operations. The flare management program expands on The Environmental Partnership’s core mission — which recently added midstream operations and represents over 70 percent of total onshore U.S. oil and natural gas production — to share information on best practices, advance new and proven technologies, foster collaboration to reduce emissions and collect data to inform efforts to minimize flaring.  As part of the new program, companies will advance best practices to reduce flare volumes, promote the beneficial use of associated gas, and improve flare reliability and efficiency when flaring does occur. Flaring is typically used when there is a lack of gas gathering lines or processing capacity, during facility or gathering maintenance, or during unplanned events for safety measures to alleviate pressure. In these instances, flaring is the safer environmental option. Rather than venting the gas into the air, flaring burns the gas, which releases fewer greenhouse gases than venting. 

Air Liquide Building Carbon Capture Project in Argentina – Further highlighting the commercialization of carbon capture projects, Air Liquide has signed a long-term agreement to build and operate the first on-site carbon dioxide (CO2) capture unit in northern Argentina. This plant will purify 70,000 tons of CO2 per year from a petrochemical complex for usage in the food and beverage as well as mining industries. The project avoid up to 700 tons per year of CO2 emissions. Air Liquide’s investment in this unit in Salta Province, Argentina will capture the carbon dioxide by-product from the mining services operations. The installation, planned to be operational by Q4 2021, will then repurpose it and deliver it to serve the needs of the region’s mining, food and beverage industries. The location of the plant, close to local CO2 needs, will also allow for a reduction in transport of approximately 700,000 Km/year, which will contribute to improved road safety and reduced fleet carbon emissions.

ON THE SCHEDULE THIS WEEK

MOST EVENTS SCHEDULED ARE NOW ONLINE WEBINARS

Wilson Hosts Forum on Nuclear Waste Issues – The Wilson Center and the National History Center host an event today at 4:00 p.m. on nuclear weapons testing and its resulting global environmental crisis.  The Partial Test Ban Treaty of 1963 is typically viewed as marking a first step toward nuclear arms control. But Georgetown’s Toshihiro Higuchi argues that it was also one of the first international agreements that addressed a truly global, human-induced environmental problem. By tracing a worldwide struggle to determine the biological effects, social acceptability and policy implications of radioactive fallout, Higuchi reexamines the Cold War in the context of the Anthropocene - an era in which humans are confronting environmental changes of their own making.

POSTPONED – ConservAmerica to Look at Transportation Emissions – Originally tomorrow at 2:00 p.m., the ConservAmerica’s discussion WILL BE POSTPONED UNTIL JANUARY.  The event was on the various technology and policy pathways available to curb carbon emissions from transportation and the role of competition in driving down costs and promoting innovation. As the largest direct source of U.S. greenhouse gas emissions, the transportation sector faces increasing pressure to decarbonize. Federal policymakers are focused on fully electrifying the sector to help meet national climate goals.

Crickets the rest of the time…. Except for Christmas – Friday December 25^th

IN THE FUTURE

Forum to Look at Reactor Innovations – The National Reactor Innovation Center is hosting the “Advanced Reactor Demonstration” webinar as part of the NRIC’s “What Inspires Us” webinar series on Thursday January 7^th at 2:30 p.m. This session will feature executives from TerraPower and X-energy as they discuss their advanced reactor designs, Natrium and Xe-100.

Chamber Holds State of American Biz – On Tuesday, January 12, 2021, at 12:00 p.m., the U.S. Chamber of Commerce holds its annual State of American Business event.  Over the past year, our country has been challenged in ways few could have planned for, or even imagined. From our public health, to our economy, to our politics, the road to recovery starts with healing a divided America. The business community can and must rally our nation around a series of solutions to overcome the pandemic and drive a widespread economic recovery.

API Hosts State of Energy Event – The American Petroleum Institute holds its 12^th annual State of American Energy Event on January 13^th 2021 , which will feature a panel of millennials employed by the oil and gas industry discussing the innovative careers they’ve found in the industry to be part of the climate solution. SOAE will examine energy’s role and actions to build a strong future – restoring our economy today, strengthening national security tomorrow and innovating to deliver continued environmental progress in the future. 2020 has been a year of defining moments that have tested our resilience as a nation. Join us as we examine the policies and innovators advancing American ingenuity, grit and technology that will power our nation’s comeback.

Cleantech Forum Set – The Cleantech Forum will be held in San Francisco on January 19 to 21^st.

NYT Climate Forum Set – The NY Times Climate team hosts another forum on January 19^th 2021 at 1:30 p.m. discussing whether it is possible to make 2021 the year we break fossil fuel addiction given the potential COVID recovery. 

USEA Holds State of Energy Industry – On January 28^th 2021, the US Energy Assn holds its annual State of the Energy Industry Forum. USEA begins each calendar year with its widely- recognized State of the Energy Industry Forum. The Forum brings together distinguished leaders from the most influential energy trade associations to share their outlook and to discuss dynamic issues facing the energy industry in the new year.