Energy Update: Week of January 22nd

Friends,

As we run into the New Hampshire primary this week, the big news is Ron DeSantis is headed back to Florida to be Governor. That news rolled out during the middle of the Lions-Tampa game, which frankly was much more interesting.  Fun to watch what happens next between Haley and Trump, but also remember Biden is NOT on the ballot up there because of his efforts to move South Carolina up in the list. Should make for some interesting storylines.

Speaking of storylines, the Ravens looked so tough, but let me just say ahead of time, even before it potentially happens, wouldn’t it be a true irony if the Lions make the Super Bowl for the first ever, only to get housed by John Harbaugh-led Ravens – especially after his brother Jim Harbaugh led the Michigan Wolverines to the NCAA Football National Championship?

We are closely watching two important items: 1) the potential LNG pause the administration is kicking around to placate enviro activists this election year which Is getting pushback from our allies in Europe and Asia who need that LNG, and 2) the upcoming announcement on EPA NAAQS standards which has caused significant political blowback from state officials, moderate Democrats and industry. Let us know if you need anything on either, including any of the numerous letter out there.

The Senate is in this week, but the House is back on recess after last week’s budget extension deal was signed by Biden. We also expect new companion bipartisan Senate legislation today to the House’s Farm to Fly Act that seeks to speed up the production and development of sustainable aviation fuel. Our friends at leading SAF producer Gevo are on board with tray tables up and can comment.

Two big events in the energy space this week: 1) Tomorrow, the US Energy Association holds its annual State of the Energy Industry forum at the National Press Club with keynoter Daniel Yergin and industry speakers Karen Harbert (AGA), Mike Sommers (API), Jason Grumet (ACP), Dan Brouillette (EEI), Abby Hopper (SEIA), Frank Wolak (FCHEA), Arshad Mansoor(EPRI), Jim Matheson (NRECA), Malcolm Woolf (NHA) and several more; 2) On Wednesday, RFF holds its annual Big Decisions event to unpack some of the biggest policy decisions in this election year. Rich Powell of ClearPath, EPA’s Vicki Arroyo and former EPA official, now at Georgetown Lisa Heinzerling are among the speakers.

API CEO Mike Sommers has a nice visit with Fox Business News last week that explains how the U.S. has oil 'insurance' based on its domestic supply. Also, check out Time reporter Justin Worland and Bloomberg’s Jen Dlouhy in a visit to the Columbia Energy Exchange podcast where they discuss key energy/environment issues for 2024.

Finally, it is Washington Mardi Gras Week in DC, which began in the 1940s as a party for homesick congressional staffers from Louisiana. It has since blossomed into a multi-day event that culminates with a costume ball and parade. Former Saints quarterback Drew Brees will reign over this week’s celebrations in the nation's capital. Call with questions.

                                                                                                     

FRANKLY SPOKEN      

“I’m confident that the collective expertise and commitment of FERC will lead us to equitable and forward-thinking transmission solutions that will stand the test of time.”

FERC Chairman Willie Phillips in comments about responding to recent winter storms Thursday at FERC’s monthly meeting.

 

ON THE PODCAST

Yergin Previews CERA Week – In this timely conversation with host Atul Arya, Dr. Daniel Yergin offers insights into the multidimensional energy transition and what it means for industry strategy, investment, and emerging partnerships. This inaugurates an exciting new CERAWeek Podcast series hosted by Atul Arya, Chief Energy Strategist, S&P Global.

Beaudreau Discusses Interior Stint – In its Columbia Energy Exchange podcast, host Jason Bordoff sits down with former Interior official Tommy Beaudreau host talks about the DOI’s effort to protect public lands and support the development of a domestic clean energy economy.

 

FUN OPINIONS

Progressive Policy Experts Say LNG is Important to Security, Environment, Economy – Progressive Policy Institute analysts Elan Sykes and Neel Brown penned an op-ed in The Messenger last week emphasizing the national security, environmental and economic dangers of discounting U.S. LNG. “Who benefits from this new push to stymie the U.S. LNG infrastructure buildout? Ultimately, it would be the coal industry and Putin. Out of a misguided fear of stranded assets and infrastructure lock-in, some greens believe that turning off U.S. exports will reduce emissions, simple as that. However, America exports LNG to meet real global energy demand, and simply cutting off supplies of gas does not mean that demand disappears; instead, energy importers will be forced to buy dirtier fuels and are likely to reward autocratic suppliers like Russia.”

Forbes: Eliminating Fossil Fuels is a Risky Bet – In his column is Forbes, Steve Forbes writes don’t be deceived that the administration’s irrational dislike of fossil fuels has disappeared. It’s just being played down until the election is over. This is supremely foolish for the U.S. economy and national security, as well as for the global environment.

 

FROG BLOG

EVs Can Survive in Cold Weather – In a column in Forbes online, Senior Contributor Marshall Shepard writes It is not breaking news that EVs struggle some during cold weather. Anyone who buys an EV and does not understand this, did not do their homework. By the way, your cellphone probably suffers too in cold weather. Norway is a global leader in EV adoption and average winter temperatures are quite cold according to a recent article in Fast Company. If they can figure it out in a country where temperatures can routinely fall to negative numbers, we can certainly figure it out here in the U.S.

 

FUN FACTS

Natural Gas Impacts on Healthcare Industry: The majority of Americans worry that banning natural gas will have a negative impact on their healthcare, according to polling from Morning Consult.

 

IN THE NEWS

Allies Challenging LNG Pullback – As rumors continue to circulate about a potential pause on non-FTA permits for LNG exports, US Allies and US security officials emphasized the energy security and climate imperative of continued U.S. LNG exports. A Bloomberg story today says that a presidential decision memo on the issue is expected in the coming weeks, even as senior administration officials remain divided. National Security Advisor Jake Sullivan, presidential energy adviser Amos Hochstein, and Sarah Ladislaw, Biden’s special assistant for climate and energy, have all raised concerns.

President of Eurogas Dideier Holleaux emphasizes Europe’s dependence on U.S. LNG to help replace Russian piped gas and notes that any pause in U.S. LNG export approvals could risk increasing and prolonging a global supply imbalance.

“If additional US LNG export capacities would not materialise it would risk increasing and prolonging the global supply imbalance. This would inevitably prolong the period of price volatility in Europe and could lead to price increases with the consequent implications that would have for economic turmoil and social impact. In the past two years since the Russian invasion of Ukraine, Europe has worked extremely hard to secure price stability of natural gas – with the important contribution of like-minded countries including the United States. It is essential that the United States stands with Europe, especially at a time of war where we are working together to protect our values and does not deliberately spark a new period of price volatility in Europe caused by policy driven LNG shortages.”

In a letter to Secretary Granholm, Asian Natural Gas and Energy Association President Paul Everingham stressed the importance of U.S. LNG to help Asian nations reduce their GHG emissions while continuing economic growth.

“Without sufficient access to gas imports, energy security and the energy transition will be elusive for the people of Southeast Asia, and that in turn places at risk the ambitious decarbonization plans spearheaded by Japan, which take into account Asian nations’ specific requirements.”

FERC Approves Gas Projects – At its first open meeting of the year, the Federal Energy Regulatory Commission voted to authorize a 32-mile natural gas pipeline that the Tennessee Valley Authority needs to supply a planned gas-fired power facility at its Cumberland Plant. Additionally, the commission approved Williams' Texas-to-Louisiana Energy Pathway project, which is designed to expand the capacity of its 10,200-mile Transcontinental gas pipeline by 364,400 dekatherms per day.

New Legislation Aimed at Transformers – A bipartisan group of 12 senators last week introduced legislation to address the shortage in distribution transformers and block a proposed DOE rule that aims to tighten energy efficiency standards for the essential pieces of grid equipment. DOE proposed stricter efficiency standards for transformers in 2022, but utilities have warned the new requirements could lead to higher costs and delays to electrification efforts. The proposed rule would mean changes to transformers’ construction, requiring an overhaul of portions of the U.S. steel industry. The Distribution Transformer Efficiency & Supply Chain Reliability Act of 2024 is sponsored by Sen. Ted Cruz R-Texas and Sen. Sherrod Brown, D-Ohio. Original co-sponsors also include Sens. Joe Manchin, D-W. Va., Marco Rubio, R-Fla., Kyrsten Sinema, I-Ariz., and Jon Tester, D-Montana.

EFI-Led Group Selected by DOE for Hydrogen Market Demand Project – The Hydrogen Demand Initiative (H₂DI), a coalition led by the EFI Foundation (EFIF), has been selected by the U.S. Department of Energy (DOE) to help accelerate commercial adoption of clean hydrogen. The Hydrogen Demand Initiative (H₂DI) will see EFIF work in partnership with commodity markets information firm S&P Global (S&P); financial exchange operator Intercontinental Exchange (ICE); the modeling and analysis group of the MIT Energy Initiative; and Dentons, the world’s largest law firm with experts in energy regulatory issues. The partnership will be charged with designing and implementing demand-side support mechanisms for enhancing the market potential of the Regional Clean Hydrogen Hubs (H2Hubs). H2DI is designed to be a high-impact hydrogen demand-side effort to leverage private investment effectively and efficiently to support commercial deployment of clean hydrogen by the seven regional hubs and surrounding areas. EFIF will draw on its extensive body of analytic work on related issues, including carbon capture and storage, technology innovation, market development, environmental justice, and clean energy finance to inform the analyses performed for the project. The project team will work closely with DOE and the H2Hubs to build a coalition of partners and a broader network of organizations to maximize the impact of the $7 billion federal investment in hydrogen.

EIRP’s Saunders Named Head of Foreign Policy Group – The Center for the National Interest said Paul J. Saunders will become its new President. With a deep background in foreign policy, national security, and energy, and a proven track record of leadership at the institution, Saunders brings diverse expertise and a strong commitment to advancing pragmatic approaches to America’s top challenges. Saunders served as Executive Director of the Center for the National Interest from 2005 to 2019 and was a State Department Senior Advisor from 2003 to 2005. He was one of the Center’s first employees at its founding in 1994 and became Director in 1997. After leaving the Center staff, he became President of Energy Innovation Reform Project, a research and advocacy organization promoting practical, bipartisan solutions in U.S. energy and climate policy. During his three-decade career in Washington, Saunders has built broad expertise and a wide network in the United States and internationally. CNI remains steadfast in its mission to promote strategic realism in U.S. foreign policy, the enlightened pursuit of U.S. national interests, and American leadership in maintaining a stable international order.

 

ON THE SCHEDULE THIS WEEK

HVACR Expo Set for Chicago – The Air-Conditioning, Heating, and Refrigeration Institute (AHRI) will co-sponsor and exhibit at the 2024 AHR Expo on today to Wednesday at the McCormick Place Convention Center in Chicago, Illinois. The AHR Expo is the world’s largest HVACR marketplace event and will host more than 1,600 exhibitors across more than 550,000 square feet of exhibit space and attracting more than 50,000 attendees, including a diverse group of international industry professionals. AHRI staff will be on hand at booth S6910 to discuss the value of the association’s globally recognized certification and standards programs, membership, industry educational scholarships, and more.

Forum Looks at US -Vietnam Energy Issues – The Center for Strategic and International Studies holds its virtual U.S.-Vietnam Conference tomorrow at 9:00 a.m. focusing on key issues related to the U.S.-Vietnam Comprehensive Strategic Partnership, including strategic and security cooperation, trade, technology, and energy, and education, culture and history. The conference follows the commemoration of the 10th anniversary of the U.S.-Vietnam Comprehensive Partnership, and U.S. President Joe Biden’s September 2023 visit to Vietnam, where he and General Secretary Nguyen Phu Trong unveiled the U.S. Vietnam Comprehensive Strategic Partnership.

CSIS Hosts Cheniere Exec – The CSIS Energy Security and Climate Change Program will hold a forum tomorrow at 9:30 a.m. with Anatol Feygin, Executive Vice President and Chief Commercial Officer of Cheniere, to discuss the global LNG landscape, the company’s future, and the role of the United States as a major exporter.

Forum Looks at China, Rare Earths – Tomorrow at 9:30 a.m., the Atlantic Council Eurasia Center and the International Tax and Investment Center hold a discussion on whether Central Asia can help break China's Rare Earth dominance. A new report from the International Tax and Investment Center’s Energy, Growth, and Security Program, “Leveraging Central Asia’s Rare Earth Elements for Economic Growth,” analyzes the state of REEs development in Central Asia and the geopolitical opportunities for the region through maximizing the development and export of its rare earth deposits. The event gathers the authors of the report to present its findings and a panel of experts to discuss how to leverage Central Asia’s rare earth elements for economic growth.

USEA Holds State of Energy – USEA holds its 20^th Annual State of the Energy Industry Forum tomorrow at the National Press Club.  The forum brings together CEOs from Washington’s leading energy trade associations where they outline their policy objectives and priorities for the upcoming year.

Forum Looks at Russian, Energy – The Center for the National Interest will hold a virtual debate tomorrow at 4:00 p.m. on whether we should create new talks with Moscow despite the Ukraine conflict.  The event will feature two leading Eurasia experts: Anatol Lieven (in favor) and Andrew Kuchins (against).

Forum Looks at Trade Policy between EU-China – On Wednesday at 9:00 a.m., FiscalNote holds a virtual discussion on EU-China trade dynamics and climate policy impacts on businesses. The expert panel will provide a comprehensive analysis of the current state of EU-China affairs, shedding light on key trade dynamics and the implications of climate policies set forth by the EU on businesses engaging with China.

Senate Budget Looks at Ocean Industries – The Senate Budget Committee holds a hearing Wednesday at 10:00 a.m. on climate impacts ocean industries. UW-Madison professor Andrea Dutton, U of British Columbia prof Rashid Sumaila and USF marine science professor Tom Frazer are among those testifying.

Senate Environment Looks at TSCA – The Senate Environment Committee holds a hearing Wednesday at 10:00 a.m. on oversight of Toxic Substances Control Act Amendments implementation. EPA’s Michal Freedhoff testifies.

RFF Big Decisions Forum Set – Resources for the Future hosts its annual Big Decisions event on Wednesday at 2:00 p.m. The event will feature government officials, climate and environmental economics experts, and journalists to unpack some of the biggest policy decisions in this election year. 2024’s big decisions include upcoming opportunities and challenges with the implementation of the historic Inflation Reduction Act, congressional and federal regulatory activities, and how looming federal court decisions may change decisionmaking into the future. Our friend Rich Powell of ClearPath EPA’s Vicki Arroyo and former EPA official, now at Georgetown Lisa Heinzerling are among the speakers.

Forum To Look at Adaption, Resilience – The Truman Center's National Security Project holds a virtual discussion on Wednesday at 4:00 p.m. on the state of American climate adaptation and resilience. This webinar will focus on the risk management practices for supply-chain related cybersecurity risks including considerations for supply chain vulnerability management and equipment country-of-origin considerations. Risk management implies understanding threats, vulnerabilities, and potential impacts. Effective risk management also addresses prioritization, developing projects to mitigate risks, and evaluating the effectiveness of mitigations. This webinar applies those concepts to understanding how to evaluate suppliers and manage risks associated with software, hardware, or critical systems.

Senate Banking Tackles Flood Insurance – The Senate Banking Committee holds a hearing on Thursday at 10:00 a.m. on the reauthorization of the National Flood Insurance Program. The hearing will feature local perspectives on challenges and solutions. Greater New Orleans CEO Michael Hecht is among those testifying.

Forum To Look at Supply Chain Cyber Risks – The US Energy Association holds a virtual discussion on Thursday at 10:00 a.m. on conducting cyber risk assessments for supply chain risk management. The webinar will focus on the risk management practices for supply-chain related cybersecurity risks including considerations for supply chain vulnerability management and equipment country-of-origin considerations. Risk management implies understanding threats, vulnerabilities, and potential impacts.

Forum to Look at Direct Pay for Clean Energy – The Center for American Progress, BlueGreen Alliance, Lawyers for Good Government and the National League of Cities hold a virtual briefing Thursday at 2:00 p.m. focused on cities opportunities with “direct pay" of clean energy tax incentives. This virtual briefing will help municipal officials better understand how to use direct pay to claim federal clean energy incentives. The webinar will provide insight into navigating domestic content requirements, labor standards, project documentation, bonus credits and more.

Brookings Releases Africa Report – On Friday at 9:30 a.m., the Brookings Africa Growth Initiative will launch its flagship report, “Foresight Africa 2024,” covering issues such as development financing, climate change, digital economy, entrepreneurship, trade and regional integration, gender, and governance. The report compiles essays and viewpoints from finance ministers, central bank governors, senior policymakers, private sector leaders, heads of foundations, youths, and scholars.

Forum Looks at Climate Disaster, Justice – On Friday at 10:00 a.m., the Ambedkar Initiative at the Institute for Comparative Literature & Society, the Center on Global Energy Policy (CGEP) at Columbia University’s School of International and Public Affairs, the SIPA Diversity, Equity, Inclusion, Climate & Engagement (DEICE) Committee, Columbia Climate School, and South Aisa Institute launches a series of discussions examining social and economic justice issues related to climate change and energy transition in India. The first session, “Environmental Casteism and Climate Disaster,” will focus on how the climate crisis is reinforcing the vulnerabilities of oppressed communities and highlight the importance of an anti-caste framework for research and practice. Two experts, scholar Srilata Sircar and Pulitzer-Grantee Journalist Suprakash Majumdar, will be in a conversation moderated by Deepali Srivastava, editor of CGEP’s Energy Explained. Dr. Anupama Rao, director, the Institute for Comparative Literature and Society, and the convenor of the Ambedkar Initiative will deliver welcome remarks.

 

IN THE FUTURE

AEI Hosts Ag, International Trade Forum – On Monday January 30^th at 1:00 p.m., AEI hosts an event on US International Trade Policy and the Agricultural Sector. A panel of experts analyze what to expect in 2024 and beyond.

Trade Agency Hosts Hydrogen Briefing – The U.S. Trade and Development Agency will host a Business Briefing for South African delegates on January 30^th in Houston to present on clean energy needs and goals and hear from U.S. firms with solutions. The Business Briefing is part of USTDA’s South Africa Green Hydrogen Reserve Trade Mission to connect public and private climate-smart institutions with U.S. best practices and solutions in clean energy and climate infrastructure. South African delegates will speak about their current capabilities, anticipated needs, and potential procurement opportunities. Technologies to be discussed include electrolyzers, hydrogen fuel cells, hydrogen-ready turbines, innovative hydrogen production designs, green hydrogen fueling stations, and more.

Chat to Address Oil, Gas Production Impacts – The Center on Global Energy Policy (CGEP) at Columbia University's School of International and Public Affairs will host Professor Lucija Muehlenbachs, CGEP visiting faculty member, associate professor of economics at the University of Calgary, and a university fellow at Resources for the Future, for a fireside chat on Wednesday January 31^st at 6:00 p.m. The conversation will focus on some of these burdens, such as methane emissions and well-site cleanup, as well as recent policy developments.

Gevo Expert to Address BNEF New Energy Finance Forum in SF – The Bloomberg New Energy Finance Summit will be held on San Francisco on January 30^th and 31^st at the Four Seasons Hotel. The event provides the ideas, insights and connections to formulate successful strategies, capitalize on technological change and shape a cleaner, more competitive future. The event includes numerous speakers from CARB, CEC and other policy officials. Gevo expert Chris Ryan speaks on a panel focused on the drive to scale up clean fuels by shifting from traditional roles in the fuel supply sector. Maersk is spinning off a startup to produce green methanol, and airlines are partnering with refiners to develop renewable fuel production capacity.

SAFE Holds Book Talk with Reuters Mining Reporter – SAFE’s Book Talk Series returns on Thursday February 1, at 2:00 p.m. featuring author Reuter mining reporter Ernest Scheyder.  Scheyder will join Abigail Hunter, director of SAFE’s Center for Critical Minerals Strategy to discuss his new book, “The War Below: Lithium, Cooper, and The Global Battle to Power Our Lives.” The book explores where, how, and why our world procures critical minerals, the building blocks of the energy transition, and the geopolitical consequences of where they come from.

IEA to Release Gas Market Report – On Thursday February 1^st at 10:00 a.m., the Center on Global Energy Policy at Columbia University’s School of International and Public Affairs holds a discussion on the main findings of the latest quarterly Gas Market Report by the IEA. The Q1 2024 edition of the International Energy Agency’s (IEA) Gas Market Report provides an in-depth review of market developments in 2023 and a short-term outlook for 2024. As part of the IEA’s Low-Emission Gases Work Program, the Report includes a section on short-term developments related to biomethane, low-emission hydrogen, and e-methane. Recognizing the importance of international cooperation to reduce greenhouse gas (GHG) emissions along gas supply chains, the Report features an overview of the initiatives, policies, and regulations enacted by the largest natural gas and LNG producers and consumers in this sphere.

Forum Chats with World Bank Head – The Center for Global Development holds a fireside chat with World Bank President Ajay Banga on Monday February 5^th at 9:00 a.m. Banga holds a conversation with CGD’s Masood Ahmed to discuss his progress, the obstacles he’s confronting, and how he defines success.

Forum to Look at Modeling on Energy Transition – On Wednesday February 7^th at 10:30 a.m., the NYU School of Law’s Institute for Policy Integrity holds a forum on modeling the energy transition. Prominent researchers and government officials will share insights from their energy system modeling and discuss its implications for policymaking. The discussion will explore comparisons between cutting-edge models, dataset choices, the incorporation of political economy insights, and the trajectory of the energy transition in the United States.

National Ethanol Conference Set for San Diego – The Renewable Fuels Assn holds its annual National Ethanol Conference in San Diego on February 19^th to 21^st. Political guru Charlie Cook will be the main Luncheon speaker. GEVO CEO Pat Gruber, LanzaJet CEO Jimmy Samartzis and API’s Lance West join RFA’s Geoff Cooper as speakers.

SCOTUS to Hear Pollution Case on Feb 21 – The Supreme Court said Friday it will hear arguments over whether to stay EPA’s "good neighbor" rule. The court ordered an hour of arguments in EPA v Ohio over the requests from red states and industry to block the rule, which targets interstate pollution that forms smog and is already effectively blocked in a dozen states due to litigation.

Sustainable Energy Factbook Set for Release – The 12^th edition of the Sustainable Energy in America Factbook, produced by BloombergNEF and the Business Council for Sustainable Energy, will be released on February 21^st and available to download for free at bcse.org/factbook. Designed for a broad audience – from energy professionals to public policymakers – the Factbook offers an insightful and in-depth look at economic, market, and investment dynamics and technology trends. Experts from the BCSE, its members and BloombergNEF will hold special briefing on the 2024 Factbook findings.

Ex-Im Bank Head to Address SAFE Summit – The SAFE Summit 2024 is set for March 12^th and 13^th in DC. The program will examine how geopolitical power dynamics are shifting and offer a compelling strategy—a systems approach to addressing energy security, climate change, supply chain deficiencies, a dwindling industrial base, and growing geopolitical tension—to reconfigure the foundational pieces that will enable a new global economy to thrive.

CERA Week – CERA Week will be held from March 19^th to 23^rd in Houston.

EPSA Forum Set – On Tuesday March 26^th, the Electric Power Supply Association holds its 2024 Competitive Power Summit.  The event will feature a day of expert panels and featured speakers discussing critical issues facing competitive power and the U.S. electric system.