Energy Update: Week of July 25th

Energy Update - July 25, 2022

Friends,

Yesterday, Denmark’s Jonas Vingegaard took home the Tour de France riding through Paris to claim an epic victory in only his second tour while dethroning two-time champ Tadej Pogacar.  Speaking of riding, I blasted a 65-mile ride down 404 to Rehoboth Beach, DE yesterday because there are only two weeks until I hit the roads of Columbus, OH with my son Adam for our 100-mile Pelotonia Charity ride for Ohio State Medical Center Cancer research.  Many of you helped me raise almost $12K last year and a bunch of you have already helped me again this year in my attempt to beat last year.  You still have time to help this great cause.  Any little bit helps. To donate, please follow this link to my profile page:  https://pelotonia.org/profile/FM735496

It will be another busy week in Washington as the Congress runs toward August.  The House shuts down this week while the Senate stays for an additional week.  And there is a lot to do.  Major semiconductor manufacturing/China competitiveness legislation is on its way to a final Senate vote this week.  We have resources and experts on it as you follow it, including the experts who wrote this opinion piece in Marketwatch two weeks ago.

On Wednesday, Senate Environment has two big items: votes on EPA Air office head Joe Goffman and NRC Commissioners, and then a hearing on carbon capture technologies and their role in our energy future.  And don’t forget about today’s 25th Annual Congressional Renewable Energy & Energy Efficiency Policy Forum features a Q&A with Sens. Jack Reed and Mike Crapo and other speakers Sen Chris Van Hollen, Rep. Ron Kind, DOE’s Kelly Speakes-Backman, NHA’s Malcolm Woolf and many more.

Also today and tomorrow, the America First Policy Institute holds its America First summit, a two-day conference organized by Trump administration veterans that will feature topics on lowering energy and gasoline prices.  Former Interior Sect David Bernhardt will speak this evening.

This is a big week for economic news. Tomorrow, there will be new consumer confidence numbers (which have fallen for two consecutive months), the Fed meets on interest rates Wednesday, there will be new Q2 GDP numbers on Thursday and Friday we will see new inflation data, all likely to spur more discussion of energy issues.

And we cannot end today without noting that on Thursday, the annual Congressional Baseball Game is scheduled for Nationals Park at 7:05 p.m.  Always a great time and good work for local charities.  Get tickets here.  Call with questions.

Best,

Frank Maisano

(202) 828-5864

C. (202) 997-5932

FRANKLY SPOKEN

“50 states are paying substantially more than when the administration took office.  There's nothing to take credit for here; drop the spin & focus on American supply.”

Former Senate Energy Chair Sen. Lisa Murkowski lambasting the White House over a tweet last week that noted declining gasoline prices.

ON THE PODCAST

CapCrude tackles Russian Energy Challenge – In its weekly podcast Capitol Crude, the team looks at Biden administration efforts to starve the Russian economy of revenues, the bulk of which come from Russian oil and energy exports. Senior editor Jasmin Melvin asked several oil market experts to weigh in on one question: Can the West enforce a global price cap on Russian oil, and will it result in lower prices?

  • Helima Croft, head of commodities strategy at RBC Capital Markets (2:29)
  • Kevin Book, managing director at ClearView Energy Partners (3:40)
  • Giovanni Staunovo, commodity strategist at UBS (5:00)
  • Christof Rühl, sr research fellow at Columbia University’s Center on Global Energy Policy (6:37)
  • Brenda Shaffer, senior energy adviser at the Foundation for Defense of Democracies (10:24)
  • Ben Cahill, senior fellow at the Center for Strategic and International Studies (12:43)
  • Paul Sheldon, chief geopolitical adviser for Platts Analytics (14:03)

Volts Interview CBD Folks on Executive Climate Action – I listed a bunch of resources/podcasts last week on executive action on climate. While I don’t know that I agree with them, I thought you might be Interested in this week’s David Roberts Volts Podcast which interviews Jean Su and Maya Golden-Krasner from the Center for Biological Diversity in how Biden can address climate change through executive action.

FUN OPINIONS

NYT Ed Board Says Climate is Not Negotiable – In an editorial, the New York Times editorial board writes a Congressional Republicans’ and Sen. Joe Manchin’s refusal to enact meaningful climate legislation jeopardizes the safety of the people they’re supposed to serve. 

WaPo Ed Board Says No to Emergency Declaration – In an editorial, The Washington Post editorial board says the climate is a crisis but invoking emergency powers is a mistake and won’t solve it. “Emergency powers were never meant to address long-standing policy priorities. Presidents should not use these declarations to enact their agendas whenever they are impeded by Congress, whether it is President Donald Trump invoking a national emergency over the border or Mr. Biden considering one for climate.”

FROG BLOG

WSJ Jenkins: Upside Down Logic of EVs – In his column in the Wall Street Journal, Holman Jenkins writes it is a terrible idea for the auto industry to gamble its finances on big electric vehicles for the rich, like Ford’s Mustang Mach-E and GM’s Hummer EV, and second-rate cars for everybody else. “If a real incentive to reduce CO2 were in place, namely a carbon tax, buyers would gravitate to the smallest-battery vehicles and hybrids, suitable for running about town but not highway trips. These cars stand a better chance of offsetting their lifecycle emissions.”

FUN FACTS

  • Supply Chain Problems Still Causing Challenges:  A recent survey of oil and natural gas firms by the Federal Reserve Bank of Dallas found 94% believe supply-chain issues are having a negative impact on their firm, and 66% expect that it will take more than a year to resolve these issues.
  • Drilling Keeps Expanding: US oil/gas drillers added rigs for a third consecutive week, lifting the total rig count by two to 758 last week, the highest level since March 2020, Baker Hughes reported.

IN THE NEWS

EIA Says Oil Producers revenues, Costs Rose Together – An Energy Information Administration analysis found that a group of 53 public US oil and natural gas producers collectively responsible for around 34% of domestic oil production saw combined cash flows jump 86% year over year to $25.7 billion during the first quarter, while capital spending nearly doubled from a year earlier to $14.6 billion amid higher material and labor costs. Production expenses for the group averaged $28.06 per barrel of oil equivalent during the quarter, marking a 59% increase from pre-pandemic levels and the highest quarterly average in the past five years.

Gore Blasts Climate Opponents on Sunday Show Stops – On Sunday news shows yesterday, former VP and climate policy activist Al Gore unloaded about Congress’ inability to move climate legislation.  Gore said that now is the time to act on climate change as the US experiences record heat and wildfires rage across Europe. Gore appeared on ABC’s This Week and NBC’s Meet the Press.

ACCF Study Examines Export Ban – A new study released by the American Council for Capital Formation examines the short-to-medium term logistics, pricing, and economic impacts of a complete ban on US petroleum product exports.  It concludes that a petroleum product export ban would result in forced U.S. refinery closures which would increase product prices in the global market as buyers of U.S. exports bid up the price of fuel from alternate sources.  As a result, U.S. gross domestic product (GDP) would fall more than $44 billion in 2023 and more than 110,000 jobs would be lost by the end of 2023. Key findings in the ACCF Study include:

  • A Petroleum Product Export Ban Would Force U.S. Refinery Closures: A ban on U.S. product exports would trap refinery production in the Gulf Coast region as capacity constraints on pipelines and the Jones Act-compliant vessel fleet limit the ability of Gulf Coast refiners to redistribute displaced exports to other U.S. markets. Given limited outlets for trapped exports, an estimated 1.3 million barrels per day of U.S. refining capacity (about 7% of the U.S. total) would need to be shuttered. The refinery closures would also create a surplus of crude oil in the Central U.S.
  • The Export Ban Would Result in Higher Product Prices for Most U.S. Fuel Consumers: The loss of U.S. refinery supply would increase product prices in the global market as buyers of U.S. exports bid up the price of fuel from alternate sources. This would increase product prices for consumers in the East and West Coast regions where imports continue to set market prices as the “last barrel” of supply. More than two-thirds of U.S. consumers will see price increases, including average increases of more than 15 cents per gallon for gasoline and more than 45 cents per gallon for distillates over the second half of 2022.
  • The Export Ban Would Cause a Net Loss to U.S. GDP:S. gross domestic product (GDP) would fall more than $44 billion in 2023 as losses to U.S. fuel consumers in the East and West Coast regions, refiners in the Gulf Coast, and oil producers in the Central U.S. more than offset benefits to consumers in the Gulf Coast and Midwest regions, refiners in the East and West Coast, and crude oil exporters in the Gulf Coast.
  • The Export Ban Would Cause Job Losses: Refinery closures and reductions in upstream oil and gas drilling activity due to the export ban would cause 85,000 average job losses over the second half of 2022 and 35,000 average job losses in 2023, including direct, indirect, and induced job losses.

The ACCF study also notes potential impacts of an export ban on the geopolitical climate as countries in the Americas, who are the primary recipients of U.S. exports, turn to other sources including Russia for alternative supply. Many of these countries are developing nations with low to middle income levels that will be highly sensitive to price increases.

Oil, Gas Workforce Struggles to Recover From COVID – The Institute for Energy Economics and Financial Analysis has a new analysis that says the oil and gas industry has added back only half of the jobs lost during the COVID-19 pandemic and a May jobs report shows the jobs increase may already have plateaued. IEEFA noted the current environment presents some unique labor challenges, an identifiable long-term employment pattern also exists. In contrast to the overall employment picture—as represented by the Texas Nonfarm Employment, which has steadily risen over the past decade (with the exception of the COVID-19 slump) at a faster clip than the national figure—Texas oil and gas employment has declined over the last two boom-and-bust cycles for oil prices.

Air Products Announces Net-Zero Goals – Industrial gas company Air Products today announced an additional set of commitments that further demonstrate its sustainability strategy in action. The company is creating a new “Third by ‘30” carbon dioxide (CO2) emissions intensity (kg CO2/MM BTU) goal for Scope 3 emissions, in addition to its existing Scope 1 and 2 goal and pledging to reach net-zero carbon emissions from its operations by 2050. Air Products will also spend or commit at least $4 billion in additional new capital for the transition to clean energy over the next five years, bringing its total commitment to first-mover projects to $15 billion through 2027.

ON THE SCHEDULE THIS WEEK

American First Policy Group Features Energy Panels as Part of Summit – Today and tomorrow, the America First Policy Institute holds its America First summit, a two-day conference organized by Trump administration veterans. Some of the featured topics during the America First Agenda Summit will include lowering energy and gasoline prices, combating historic inflation, giving parents more control of their children’s education, fighting crime in our cities, and securing the border. Former President Trump will close the summit, which will feature nearly a dozen panel discussions and presentations by leaders in Congress, governors, state officials, AFPI experts, and other distinguished guests. GOP lawmakers Sens. Rick Scott (FL) and Reps. Richard Hudson (NC) and August Pfluger (TX) will speak today at a 1:30 p.m. panel on energy. Former Interior Secretary David Bernhardt will also participate in a 5:30 p.m. panel.

Congressional Energy Efficiency Expo Set – The Environmental and Energy Study Institute (EESI) and the House and Senate Renewable Energy and Energy Efficiency (REEE) Caucuses hold the Congressional Energy Efficiency Expo online today. Building on the more than 20 years of experience hosting clean energy leaders from various sectors, the event showcases technology and policy solutions to today’s climate and energy use challenges. The event features a Q&A with Sens. Jack Reed and Mike Crapo, and other speakers will include Sen Chris Van Hollen, Rep. Ron Kind, DOE’s Kelly Speakes-Backman, NHA’s Malcolm Woolf and many more.

CSIS to Look at Critical Mineral Challenge – Tomorrow at 9:30 a.m., the CSIS Energy Security and Climate Change Program hosts a discussion on the upstream end of the electric vehicle battery supply chain. Demand for battery minerals, key to the electrification of transportation, is forecast to grow rapidly. The discussion will feature the market dynamics for these minerals and the focus on supply-demand gaps. Jessica Roberts (Benchmark Mineral Intelligence) and Scott Yarham (S&P Global) will discuss the outlook for battery minerals supply and demand as well as the interworkings of global minerals trading.

Forum to Look at Equitable EV Adoption – Tomorrow at Noon, the Information Technology & Innovation Foundation holds a forum on accelerating more equitable EV adoption through technological, business model, and policy innovation. ITIF’s Center for Clean Energy Innovation will hold an expert discussion on the findings and policy implications of a new report examining the connection between equity and innovation in the context of EVs.

Forum to Look at Microgrids –Tomorrow at 2:00 p.m., RE Plus holds another Electric Avenue Seminar on Microgrids. This webinar will discuss the merits of various system topologies and relate the experience of the panelists regarding actual tested, piloted and installed systems.  Projects covers will include, the Purdue DC Home, the TECO deployed Emera Residential Development Microgrid platform, and the Kirtland AFB Housing Microgrid Network.

Forum to Look at Africa Energy Transition – The Atlantic Council and the African Development Bank Group hold a virtual discussion on Wednesday at 9:30 a.m. looking at supporting climate resilience and a just energy transition in Africa.  The event will focus on the African Economic Outlook 2022 report that aims to raise awareness about the effects of climate change on the continent and the urgency to identify and leverage innovative financing instruments to address climate vulnerabilities and transition toward net-zero by 2050. AfDB’s chief economist and other members of the bank’s delegation dive into its key findings.

Senate Environment to Vote on Nominees, Discuss CCS – The Senate Environment Committee will vote on EPA Air nominee Joe Goffman and NRC Commissioners Annie Caputo and Brad Crowell at 9:45 a.m. on Wednesday. Following the votes, the Committee holds a hearing on development of projects and implementation of policies that support carbon capture, utilization, and storage technologies.

Forum to Focus on Policies of New Columbian President – On Wednesday at 11:00 a.m., the Dialogue holds a forum to explore the policies of new leftist Columbian president Gustavo Petro.  This event will explore Petro’s energy and climate promises, the prospects for fulfilling them as president, and the impacts on the country’s important energy industries.

Forum to Look at Wind Sound Standards – Americans for Clean Power holds a forum on Wednesday at 1:00 p.m. on standardizing the prediction of wind turbine sound levels, including an effort to create a new ANSI/ACP standard. 

Forum to Look at Green Infrastructure in Great Lakes Region – The American Association for the Advancement of Science’s Center for Scientific Evidence in Public Issues (AAAS EPI Center), EPA’s Office of Water and the White House holds the next webinar in the series on Wednesday at 1:00 p.m. that highlights regional examples of green infrastructure and nature-based solutions. In this event, speakers will discuss their work across the Great Lakes to plan and implement unique green infrastructure and nature-based solutions. The expert panelists will share their unique, regional experiences planning and implementing green infrastructure and nature-based solutions in the Great Lakes region. Additionally, speakers will share opportunities, challenges, barriers, and lessons learned from the design and planning to implementation to operations and maintenance of green infrastructure and nature-based solutions.

CSIS to Discuss Houston Hydrogen Hub Possibilities – The Center for Strategic and International Studies (CSIS) holds a discussion on Wednesday at 3:00 p.m. on the development of a regional clean hydrogen hub around Houston, TX, hosted by the CSIS Energy Security and Climate Change Program. In this conversation, Brett Perlman, CEO of the Center for Houston’s Future (CHF), will be interviewed by Joseph Majkut (CSIS). CHF has been leading an initiative to establish a hub for clean hydrogen in the Houston area.

Chamber Forum Set to Discuss Building Resilience – The U.S. Chamber of Commerce holds its 11th Annual Building Resilience Through Private-Public Partnerships Conference on Thursday and Friday.

WRI to Look at GHG Inventory – On Thursday at 9:00 a.m., World Resources Institute, C40 Cities and ICLEI will discuss a new globally standardized, flexible methodology to estimate GHG greenhouse gas emissions and carbon removals (sequestration) by forests and trees for cities and communities worldwide, building on the updated Global Protocol for Community-Scale Greenhouse Gas Emission Inventories (GPC). Speakers will outline the methods covered in the new guidance: “Supplemental Guidance for Forests and Trees.” They will also showcase how cities and communities report their results and how to include them in their emissions reduction targets. They will also discuss how communities have already inventoried GHG emissions and removals by forests and trees for more holistic climate action planning by outlining how some communities have already used these methods.

FERC Holds Open Meeting – On Thursday at 10:00 a.m., FERC holds its regular Open Meeting. The agenda is pretty light and there will be no August meeting.

House Resources Looks at Government Contracts – The House Natural Resources Oversight and Investigations Subcommittee holds a hearing on Thursday at 10:00 a.m. looking at preventing polluters from getting government contracts.  The hearing will look at the Bureau of Land Management's corporate exclusions lists.

Senate Energy to Look at Legislation – The Senate Energy and Natural Resources Committee holds a legislative hearing on Thursday at 10:00 a.m. The hearing will feature: S.3145 the "Small Scale Liquefied Natural Gas Access Act of 2021"; S. 3543 (117) , the "Vehicle Innovation Act of 2022"; S. 3719 (117) , the "Southwestern Power Administration Fund Establishment Act"; S. 3740 (117) , the "Microelectronics Research for Energy Innovation Act of 2022"; S. 3769 (117) , the "Weatherization Assistance Program Improvements Act of 2022"; S. 3856 (117) , a bill to prohibit the importation of uranium from the Russian Federation; S. 4038 (117) , the "Renewable Diesel and Sustainable Aviation Fuel Parity Act of 2022"; S. 4061 (117) , a bill to amend the Energy Policy and Conservation Act to modify the definition of water heater under energy conservation standards; S. 4066 (117) , the "Fueling Our Nuclear Future Act of 2022"; S. 4280 (117) , the "Federal Carbon Dioxide Removal Leadership Act of 2022"; and a bill to establish a new organization to manage nuclear waste, provide a consensual process for siting nuclear waste facilities and ensure adequate funding for managing nuclear waste.

Forum Looks at Business Resilience – On Thursday at 1:15 p.m., GW’s Security and Sustainability Forum will hold an event to measure the business value of resilience. The event discusses recent study led by Noah Dormady of The Ohio State University, investing in resilience tactics can dramatically reduce these losses. Noah is an energy and environmental economist and public policy scholar.  Based on new metrics, Noah’s research team surveyed firms affected by Superstorm Sandy and Hurricane Harvey and found that for every dollar spent on resilience, firms avoided an average of $4.57 in business interruption.

House Oversight Looks at Lead in Aviation Fuel – On Thursday at 2:00 p.m., the House Oversight and Reform Environment Subcommittee holds a hearing on leaded aviation fuel.

USEA to Tackle Direct Air Capture – The US Energy Assn will hold a forum on Thursday at 2:00 p.m. to look at life cycle analysis on direct air capture technologies. During this webinar, representatives from DOE’s Office of Carbon Management will provide an overview of the recently released Best Practices for the analysis of Direct Air Capture with Storage (DACS). DOE’s Noah Deich speaks.

WRI Looks at Carbon Free Energy – On Thursday at 3:00 p.m., WRI holds second webinar of a series on 24/7 Carbon Free Energy.  Experts will tackle questions about 24/7 carbon-free supply projects. The webinar will also feature overviews from representatives of electric utilities AES Corporation and Georgia Power about their emerging 24/7 CFE supply products, as well as a customer-side perspective on 24/7 CFE deals from Iron Mountain, a global storage and information management services company that has committed to matching its hourly energy use with renewable power. After opening presentations from panelists, Lori Bird (Director, US Energy, WRI) will moderate a discussion exploring the questions outlined above.

Heritage to Look at Energy, Fossil Fuels – The Heritage Foundation holds a discussion on Thursday at 5:30 p.m. that will examine the energy use and the need for fossil fuels. Energy expert Alex Epstein breaks down the facts about oil, coal, and natural gas in a fireside chat with Heritage President Dr. Kevin Roberts.

IN THE FUTURE

WRI Forum to Look at Decarb Solutions – The World Resources Institute’s Buildings Initiative as part of the Zero Carbon Building Accelerator project supported by GEF and UNEP, will host a forum on Tuesday August 2nd at 9:00 a.m. where experts will share insights from super-efficient industrial and commercial space cooling. They will discuss designing cooling techniques for residential homes, nature-based solutions to keep our cities cooler overall, and tools for government planning for heat impacts.

BPC to Look at EPA, Infrastructure – In the fourth event of our “Overcoming Challenges and Seizing Opportunities: Implementing the Bipartisan Infrastructure Law” series, the Bipartisan Policy Center, National Association of Counties, and National League of Cities will host Karen Dettmer, Managing Director for Infrastructure Implementation at the Environmental Protection Agency for a discussion Tuesday August 2nd at 11:00 a.m. on the agency’s work to guide and support investments in our nation’s water infrastructure.

RFF Hosts DOE’s Turk – On Thursday August 11th at 3:00 p.m., Resources for the Future (RFF) for a Policy Leadership Series event with David Turk, Deputy Secretary of the US Department of Energy. RFF President and CEO Richard G. Newell will sit down with the deputy secretary to discuss the dual global energy and climate change crises. Their conversation will delve into the administration’s ongoing responses to high energy prices, policies and technologies needed to combat climate change while ensuring a just and equitable clean energy transition, and more.