Energy Update: Week of May 23rd

Friends,

I did well on the Preakness Saturday.  I had the Superfecta (8-5-4 w the 2 on the wheel) in a wheel box for a nice payout.  Not a major success but up $300 in the end.  Next up, Memorial Day and then off to the Belmont for the final leg of the Triple Crown.  Justin Thomas capped off a 7-shot comeback at the PGA at Oklahoma's Southern Hills and Man City also came back from a 2-nil deficit to win the Premier League.

Right now, I am in Las Vegas (I might be at a Casino producing this update or maybe not) for the roll out of the newest, largest Air Liquide Hydrogen plant for the CA mobility market.  Coupled with the expected hydrogen hub funding announcement from DOE, this makes for a big week for hydrogen.

It is also likely a big week for the Supreme Court, with the high-profile Roe decision and the West Virginia v. EPA case expecting SCOTUS orders as soon as this week.  Keep the Climate case on your radar.

Several other interesting things going on this week.  Many corporate execs and government officials are in Davos for the World Economic Forum meeting which runs through Thursday.  Also in town here tomorrow to Thursday, the Center for Climate and Energy Solutions (C2ES) and the Climate Registry host the 2022 Climate Leadership Conference looking at the climate crisis through policy, innovation, and business solutions.  BCSE’s Lisa Jacobson Speaks on Wednesday, my Bracewell colleague Scott Segal speaks on Thursday morning and SoCal Gas President Maryam Brown returns to DC to speak on Thursday afternoon.

As we run up to Memorial Day, keep looking for the gas price discussion to take weirder turns as members get desperate to blame somebody.  Senate takes up the House-passed bill (which they struggled to pass) this week despite no path to get 60 votes.  I discussed what’s really going on with a lot of you last week and with my friend Julie Mason on her Sirius XM P.O.T.U.S. show Mason Mornings.

Speaking of gas prices and oil/gas mixed signals, Interior Sect Haaland returns to Senate Approps after last week’s rocky performance at Senate Energy. Expect another rough ride as these panel members are serious energy nerds including Sens. Murkowski, Capito, Heinrich, Tester and Rubio.  At the same time, Senate Environment holds the nominations hearing for EPA Air Office head Joe Goffman (also a former Carper staffer). Tomorrow, the House Select Climate Committee will hold a hearing that examines ways to create an affordable and resilient food supply chain in the face of climate change.  Finally, the SEC will vote Wednesday on whether to propose environmental, social and governance investing rules despite some strong pushback from investors’ who have been rejecting ESG shareholder resolutions and strong concerns from many investors groups like BlackRock.

The Carbon Capture Coalition holds a forum tomorrow (contact Ben Finzel to RSVP) with a group of NGO, labor and business leaders to provide a baseline of knowledge on key carbon management topics. C3 Solutions holds an online discussion on Wednesday on reducing barriers to meet America’s energy needs and environmental goals.  Finally, the US Energy Assn holds its 2022 annual Meeting and Public Policy Forum to preview the energy industry’s future, with former FERC Chair Neil Chatterjee as one of the speakers. Also Thursday, EPRI hosts a forum on energy modeling and ACCF hosts a conversation with former Energy Sect Ernie Moniz.

Finally, it is a holiday weekend coming up so prepare Friday for the usual Administration news dump.  The Offshore 5-year plan was definitely on the list but that was foiled by Chairman Manchin in yesterday’s hearing.  Another candidate could be EPA’s RVOs for the RFS.  Stay tuned around 4:30 pm on Friday…

Best,

Frank Maisano

(202) 828-5864

C. (202) 997-5932

FRANKLY SPOKEN

“Sometimes we do energy policy and sometimes we do energy politics. This is the latter."

Rep. Sean Casten (D-IL) following Thursday’s vote on price gouging legislation.

“I don’t think . . . that these anti-price gouging bills would do much to bring inflation down. They just increase the type of shortages that consumers probably hate even more than the high prices. It’s pretty gimmicky, these price gouging bills, because, you know, [President Biden’s] got a lot of extra demand. What happens when demand goes up? Prices go up. There’s an old saying the cure for high prices is high prices. That’s a little bit of a painful thing to deal with, but it’s what elicits the additional supply. It brings more producers into the market, and it’s what brings prices down and we need to let that process work. You try to interfere with it, you’re going to make things worse. We tried that in the seventies, it was a big failure. We shouldn’t be repeating it again.”

Harvard economist and former Obama adviser Jason Furman interviewed by Margaret Brennan on CBS’s “Face the Nation,” on May 22, 2022.

ON THE PODCAST

Hydrogen Discussion Featured on Big Switch – In this week’s episode of the Big Switch, the discuss how many times we've mentioned hydrogen on The Big Switch over the past 18 episodes. They are also taking a step back to ask what IS hydrogen? And how can it help decarbonize the economy?  It turns out, there’s a whole rainbow of hydrogen fuel – gray hydrogen, blue hydrogen, even pink hydrogen. But the kind of hydrogen that’s most important for a net zero future is green hydrogen. It’s made with carbon free-electricity, and it could go a long way toward decarbonizing sticky parts of the economy, like industry and shipping.  The guest is former DOE official Dr. Julio Friedmann, chief scientist and chief carbon wrangler at Carbon Direct.  He discusses the promises and challenges of hydrogen and actually does a lot of singing.

FUN OPINIONS

WSJ on Gas Prices – In an opinion/commentary, the Wall Street Journal Opinion section explains why the cost at the pump may continue to rise and what the Biden administration could do about it.

FROG BLOG

NERC Report Warns of Potential Blackouts Reliability Shortfall – In a blog post on Hot Air, Jazz Shaw writes that in far too many states, the power grid is already nearly at full capacity, and in the next few months, that capacity will be exceeded. This isn’t a question of “if” or really even “when.” It’s just a fact. Industry experts know this and have been trying to sound the alarm for several years.  Shaw proposes a bunch of solutions but says we need to free up some of that massive amount of money in the infrastructure bill that was supposed to go toward the power grid. The grid needs to be modernized and “smartened up” to make it more adaptable and able to minimize the range of outages.

Russia Using Civilian Ships – In a blog post on the Middle East Institute’s website, Istanbul geopolitical analyst Yörük Işık writes Turkey triggered the Montreux Convention, not used since World War II, and closed the Turkish Straits to military ships. However, close observation of traffic through the Turkish Straits reveals that Russia is continuing its naval operations in the Mediterranean and Black seas. Işık adds that Russia bought old civilian cargo ships from Turkey, reflagged them, and began using them for its war. And now, Russia is once again using civilian ships to supply its military campaigns in Syria and Libya.

FUN FACTS

Fire reports: An estimated 16% of the US population currently lives in hazardous wildfire areas, and over the next 30 years, that number will rise to 21%, according to a Washington Post analysis of a First Street Foundation study that analyzed wildfire risk.

IN THE NEWS

Glick Re-Nominated for FERC – In another Friday afternoon special – at the end of a bunch of non-descript other random nominees for other offices – the White House slipped in the renomination of Chairman Rick Glick to the FERC when his term ends next month.  Glick was in some hot water earlier this year when he rolled out a new climate plan that drew an immediate Senate Energy hearing and the ire of Chairman Manchin.  Soon after the hearing, Glick pulled back the proposal. My Bracewell colleague Scott Segal said “Rich Glick is a dedicated public servant with an encyclopedic knowledge of the energy industry.  While I can’t say I agree with every one of his initiatives, he is well-prepared, smart and open to hearing all sides.  If he is indeed confirmed, which seems likely, I look forward to continuing to work with him.”  ACORE’s Greg Wetstone also said Glick “has an in-depth understanding of the regulatory barriers facing the transition to a 21st century grid, and pragmatic approaches to address them. We look forward to continuing to work with him on critical reforms, like FERC’s new rulemaking on transmission, that help move the country forward on our path to a clean energy future.”  Expect a rocky road for nomination for Round 2 but we suspect Glick will survive.

Haaland Pressed for 5-year Plan at Senate Energy – In her appearance before the Senate Energy Committee, Interior Secretary Haaland – under pressure from Chairman Manchin – said that Interior would release its 5-year plan by June 30^th.   There are significant doubts though that the administration’s new five-year plan would call for any new oil and gas lease sales given the budget revenue numbers it is counting for lease sales. 

API, Chamber Question Whether There Will Be a Lease Sale Any Time Soon – The announcement combined with the Biden budget (which shows no revenue from new lease sales has spurred industry advocates to question if we will have any Lease sales before 2023. “The practical effect of this is that it is unlikely there will be offshore lease sales before the end of 2023,” said Frank Macchiarola, API’s senior vice president of policy, economics and regulatory affairs. “This is one more example of the disconnect between the administration’s political rhetoric and policy reality.” He added that the announcement was the latest in a series of “mixed signals on energy policy” from the administration. “Interior has had 16 months to fulfill its statutory obligation to develop and maintain an offshore oil and gas leasing program and it has failed,” National Ocean Industries Association President Erik Milito said in a statement. “No other administration has failed in this way.”

Rig Production Keeps Growing – Baker Hughes said U.S. energy firms this week added oil and natural gas rigs for a ninth week in a row, data showed on Friday, as mostly small producers respond to high prices and prodding by the government to ramp up output. BH said the total rig count is up to 273, or 60%, over this time last year. The rig count has grown for a record 21 months but incrementally, as publicly-traded producers stick to their capital discipline that has kept overall production about a million barrels per day (bpd) below the nation’s 2019 record.

Congressional, EU members Demand to Keep Green Goals – In the “we’re really out of touch with our current energy problem” category, member of the US Congress and EU’s Parliament wrote a letter to EU leaders and President Biden last week urging them not to allow the response to the war in Ukraine to include new financing of fossil fuel infrastructure, licensing or extraction. The 45 signatories included Democrats Elizabeth Warren and Alexandria Ocasio-Cortez, Bernie Sanders (I-Vt.) and Green MEPs, including Marie Toussaint, and Socialists and Democrats.  Okay, good luck with that…

DOE Announces Carbon Management Hubs – DOE said in a notice that it will use $3.5 billion from the bipartisan infrastructure law to build out four direct air carbon capture hubs to kickstart the domestic industry and help the nation eliminate legacy pollution to reach President Biden’s goal of net-zero emissions by 2050. Expect DOE’s Jennifer Wilcox to probably touch on the DOE's recent launch at an EESI event on carbon capture and direct air capture on Wednesday.

ON THE SCHEDULE THIS WEEK

IEA Releases Global EV Report – This morning at 8:00 a.m., IEA released its latest global EV report.  See more here:

Groups Hosts Sen. Smith, Rep Khanna on Climate – Today at 4:00 p.m., Evergreen Action will host Sen. Tina Smith and Rep. Ro Khanna for a “Policy + Pints'' discussion about passing the $555 billion in energy and climate change-related provisions from the Democrats' stalled reconciliation proposal.

FERC Forum to Look at NatGas Policy – Energy Policy News (formerly Foster’s Report) holds a webinar tomorrow featuring former FERC Chair Neil Chatterjee and NRDC’s Gillian Giannetti on natgas policy in crisis.  The event will look at FERC and the path forward. The recent policies, which were walked back to draft status by the Commission last month, raise questions about the future of natural gas during the clean energy transition as well as FERC’s fundamental role as a federal energy regulator. The event will be moderated by our friend Rod Kuckro.

Forum Looks at EVs – The Baker Institute holds a discussion tomorrow at 10:15 a.m. on EV transport issues.  At this event, fellows Rachel Meidl and Michelle Michot Foss sit down with Robert Kleinbaum, a technical fellow at General Motors working to address the challenges of electrifying transport. They will discuss advancements in EV research and development, challenges with materials sourcing, the role of recycling, federal policy actions and emerging views on the “EV ecosystem.”

CAP to Look at EVs – Tomorrow at 11:00 a.m., the Center for American Progress holds a discussion on the future of mobility from the Midwest to beyond.  The event will focus on decarbonizing transportation. Keynote is by Gina McCarthy and CAP holds a fireside chat with Gov. Gretchen Whitmer.  Among the other speakers are UAW’s Cindy Estrada and Terry Travis, managing partner at EVNoire.

House Climate Committee Looks at Affordable, Resilient Food – The House Select Climate Committee will hold a hearing tomorrow at Noon that examines ways to create an affordable and resilient food supply chain in the face of climate change. The panel will hear testimony from nonprofit groups including ReFED, the North American Renderers Association and the National Audubon Society.

Forum to Look at Climate Resilience, Risk – The National Association for Business Economics holds a discussion tomorrow at 1:00 p.m. on the rising tides and increasing costs from flood risks, insurance and climate change.  Speakers include Noah Diffenbaugh of the Stanford Woods Institute for the Environment and Carolyn Kousky, the Executive Director of the Wharton Risk Center.

Hydrogen Plant Opening Set for North Las Vegas – Air Liquide will formally open its new North Las Vegas Hydrogen Production Facility tomorrow.  It will be the largest H2 Production facility in the US and is design to reach California’s emerging hydrogen market.

Carbon Capture Forum Set – The Carbon Capture Coalition and a group of NGO, labor and business leaders will hold an online media briefing tomorrow at 1:00 p.m. to provide a baseline of knowledge on key carbon management topics. Carbon management experts will include Jessie Stolark and Madelyn Morrison from the Carbon Capture Coalition; NWF’s Shannon Heyck-Williams; Ben Grove and John Thompson from Clean Air Task Force; LIUNA’s Kevin Pranis; Tom Dower from LanzaTech and Patricia Loria from Carbon Capture, Inc. Register with Ben Finzel at: ben@renewpr.com

Haaland Heads Back to Senate – The Senate Appropriations Interior/Environment Subcommittee holds a hearing on Wednesday at 10:00 a.m. on the budget estimates and justification for FY2023 for the Interior Department.  Sect Haaland testifies.

Senate Environment Hosts Air Office Nominee – The Senate Environment Committee holds a hearing on the EPA’s nominee to its Air Office.  Veteran air expert Joe Goffman will testify.

House Approps Hosts FEMA – The House Appropriations Homeland Security Subcommittee holds a hearing on the FY2023 Budget Request for the Federal Emergency Management Agency.

House Science Panel Looks at Weather Research – The House Science Environment Subcommittee holds a hearing on Wednesday at 11:00 a.m. looking at the future of weather research.

Forum Looks at Deployment Innovation Techs – C3 Solutions holds an online discussion on Wednesday at 12:00 p.m. forum on reducing barriers to meet America’s energy needs and environmental goals.  The panel will feature policy experts discussing how we can reduce barriers and speed up the deployment of investments, innovations and conservation practices that will produce beneficial economic and environmental outcomes. Our friend Nick Loris moderates and my former student and ClearPath energy expert Alex Fitzsimmons will be on the panel.

Forum Looks at EVs – The American Security Project holds a virtual discussion on Wednesday at 12:00 p.m. on the future of Electric Vehicles (EVs) and the military.

EESI Looks at Carbon Capture – The Environmental and Energy Study Institute (EESI) holds a briefing on Wednesday at 3:30 p.m. focused on direct air capture, which chemically removes carbon dioxide from the atmosphere. The captured carbon can be permanently stored underground or used in industrial processes. While climate change mitigation efforts are the priority, carbon dioxide removal will be necessary to help meet climate goals and limit global warming to below 2 degrees Celsius (3.6 degrees Fahrenheit) as outlined in the Paris Agreement. During this briefing, panelists will explain what Congress needs to know about direct air capture, including the considerations, challenges, and opportunities involved in responsibly scaling it up. Rep. Paul Tonko provides introductory remarks.

USEA to Hold Annual Policy Forum – On Thursday, the US Energy Assn holds its 2022 annual Meeting and Public Policy to preview the energy industry’s future.  The event will be virtual and feature DOE’s Kelly Speakes-Backman, EPA’s Tom Carbonell, former FERC Chair Neil Chatterjee. NRC’s Dan Dorman, EXIM Bank’s Judith Pryor and many more.

EPRI Holds Washington Energy Seminar – EPRI holds a Washington Seminar Thursday afternoon starting at Noon.  The event is in collaboration with EIA, EPA, National Renewable Energy Laboratory (NREL), and Idaho National Laboratory (INL) and will explore modeling nuclear energy’s future role in the United States. It will feature an overview of the joint report from these organizations published in late April 2022 on “Nuclear Energy in Long-Term System Models: A Multi-Model Perspective.” This modeling perspective will be complemented by a panel featuring government and industry speakers on potential contributions of nuclear energy in future decarbonization efforts and how energy models are used to inform decisions. Among the speakers are EIA’s Angelina LaRose, DOE Nuclear head Kathryn Huff and our friend ARMOND Cohen of the Clean Air Task Force.

ACCF Hosts Moniz – The American Council for Capital Formation (ACCF) hosts a conversation with former Secretary of Energy Ernest Moniz on Thursday at Noon. Moniz served as United States Secretary of Energy from May 21, 2013, to January 19, 2017. 

Forum to Look at Gas Prices – The Baker Institute Center for Energy Studies is sponsoring a gas price webinar on Thursday at 3:00 p.m. An expert panel will discuss what’s driving prices at the pump and what to expect next. Panelists include Baker Institute’s Kenneth B. Medlock, Rapidan Energy Group founder and president Robert McNally, ESAI Energy managing principal Sarah Emerson and Lutz Kilian, a senior economic policy advisor at the Federal Reserve Bank of Dallas.

USEA Holds Briefing on Summer Power Challenges – The US Energy Assn holds virtual press briefing on Friday at 11:00 a.m. on the exciting electricity technology future and the difficult summer ahead.  his briefing will focus on how utilities will look in the future, how they are adapting to technical change, data dominance and integrating renewables, all against the backdrop of extreme weather events and supply chain challenges.  Speakers include EPRI CEO Arshad Mansoor and MISO CEO John Bear.  Reporters featured Vijay Vaitheeswaran of The Economist, WSJ’s Jennifer Hiller, Ken Silverstein of Forbes, UDive’s Robert Walton and electricity veteran Rod Kuckro.

Forum to Look at Distributed Energy – On Friday at 11:00 a.m., the NYU Institute for Policy Integrity and EDF hold a forum on valuing and compensating distributed energy resources. The webinar will bring together leading research and policy experts to discuss ways to value and compensate distributed energy resources for their services, how these different approaches affect outcomes of interest, and where the policy discussions are headed.

IN THE FUTURE

MONDAY MAY 30^th – Memorial Day

Yale Enviro Performance Index set for Release – The Yale Center for Environmental Law and Policy will release its 2022 Environmental Performance Index on Wednesday June 1^st at 10:45 a.m.

EFI to Look at Gulf Coast Hydrogen – On Wednesday, June 1, 11:30 a.m., the Energy Futures Initiative (EFI) holds a public webinar on building the Gulf Coast clean hydrogen market. Expert panels will discuss (1) how the Gulf Coast can leverage its existing hydrogen infrastructure and expertise for clean hubs, (2) how to best utilize the U.S. Department of Energy's hydrogen hub funding to establish a foundation for broader market formation, and (3) the role of current and potential hydrogen offtakers.

Forum to Address Gas-Fired Power Issues – On Thursday June 2^nd, the Center for the New Energy Economy, Duke University’s Nicholas Institute for Environmental Policy Solutions, the Great Plains Institute, Georgetown Climate Center and the Harvard Environmental and Energy Law Program host a webinar exploring low- and zero-carbon technologies available for natural gas-fired electricity generation. Speakers will include EPA’s Tim Profeta, DOE’s Carbon Management Office carbon capture official Lynn Brickett, Damian Beauchamp of 8 Rivers, Xcel Energy’s Jeff Lyng and Calpine’s James Henahan. 

ACORE Finance Forum Set – The 2022 ACORE Finance Forum will be held in New York City on June 7^th and 8^th New York State Energy Research and Development Authority CEO Doreen will give keynote remarks at the Forum.

Reuters to Host Hydrogen 2022 – To scale-up production, secure off-takers and lead the hydrogen economy, Reuters Events holds Hydrogen 2022 conference and exhibition to detail and discussion hoe to build the global hydrogen economy.

Solar Forum Set – Wood Mackenzie hosts a Solar and Energy Storage Summit in San Diego on June 6^th to 9^th.  WM’s expert team of solar and energy storage research analysts and consultants will engage in powerful conversations with leading industry experts to discuss the outlook and strategies for getting the sector back on the path to growth.

Members of Senate, House Address Energy Summit – US Energy Stream hosts its 7^th Washington Energy Summit 2022 on June 8^th and 9^th at the Cosmos Club of Washington, DC.  The Summit is an annual market intelligence platform that brings together Senators, Congressmen, government leaders, senior energy executives, investors and experts to successfully address climate policy in the quest for net-zero emissions in a decarbonized energy future. Speakers include Sens. Roger Marshall, Bill Cassidy, Ted Cruz, Steve Daines and Cynthia Lummis, as well as 20-plus Representatives. 

EESI Looks at Wildfires, Climate – On Monday June 13^th at 1:00 p.m., the Environmental and Energy Study Institute (EESI) hosts a briefing on policies and practices to address wildfires. Panelists will discuss policies and practices that would allow the United States to reduce the overall risk of wildfires, including how innovations in community-centered wildfire protection can improve resilience for humans and ecosystems.