Energy Update: Week of November 7th

Energy Update - November 07, 2022

Friends,

What a great weekend (especially for Texas) with the Houston Astros winning their second World Series (this time of course, much less controversial).  The Victory Parade will roll right past the Bracewell Houston Office today (Hoping my Bracewell colleagues send a few picts). Speaking of rolling through the streets, yesterday, the NYC Marathon rolled through the Big Apple with dramatic end. Kenyan Evans Chebet passed Brazilian Daniel do Nascimento, who had separated himself from the rest of the men’s field earlier but collapsed at Mile 21. Chebet rambled by and finished in 2:08:41. On the women’s side Kenyan and Kansas Jayhawk runner Sharon Lokedi, won in her marathon debut, breaking free from a celebrated field to win in 2:23:23.

ELECTIONS

Starting here this week with the Midterm elections are tomorrow. On Wednesday at 11:00 a.m. our Bracewell experts will host our award-winning post-election analysis. Listen live and ask questions as the PRG team breaks down what the 2022 election results mean for control of Congress and the policy agenda in Washington. Our team will guide a lively discussion on topics such as energy and environmental policy, Congressional oversight, and the policymaking options for the White House.  

COP27

COP27 also started yesterday in Sharm el-Sheikh, Egypt and with heads of state there the first two days, there will be a lot of rhetoric about disaster. UN Secretary-General António Guterres called for a "climate solidarity pact" between rich and poor nations to limit the severity of global warming saying: "We are on a highway to climate hell with our foot on the accelerator. Humanity has a choice:  cooperate or perish."

President Biden will attend on Friday and John Kerry joins the First Movers Coalition tomorrow for a big event on innovative technologies. The US Chamber also hosts a great event on Friday with Marty Durbin and White House Advisor Ali Ziadi.

The Business Council for Sustainable Energy (BCSE) sent a letter to U.S. Special Presidential Envoy for Climate John Kerry last Thursday commending the U.S. for its leadership on climate change in advance of the 27th Conference of the Parties (COP 27) to the United Nations Framework Convention on Climate Change in Sharm El-Sheik, Egypt. The letter highlighted the continued need for U.S. diplomatic leadership to include technical assistance to developing countries on both mitigation and adaptation priorities.  BCSE is also hosting a bunch of events you can see HERE.

Finally, this week, the NCAA Field Hockey playoffs get underway and both Hannah and I have games in the D3 Bracket.  I will be at Rowan for Tufts/Messiah while she will be at Trinity on Wednesday and at Babson for the Weekend.

After last week’s political back-and-forth from the White House on gas prices and oil profits, I visited Sirius XM’s POTUS 124 with Julie Mason to discuss the subject. Check out the REPLAY HERE.  Add to it the weekend’s comments on “no drilling” off the cuff to a climate activist and you’ll see what I mean by mixed signals! Call with any questions about elections, politics or COP27.  Happy to help.   

Best,

Frank Maisano

(202) 828-5864

C. (202) 997-5932

FRANKLY SPOKEN

"Americans will be facing higher energy costs this winter and should be concerned that the government is implementing programs that will choose the appliances you use to heat your home or cook your family meals which can increase energy use and utility bills. These policies ignore the cost and emissions savings that would be achieved through a portfolio approach that includes efficient gas end-use applications.” 

AGA President and CEO Karen Harbert after Vice President Harris traveled to Boston, MA to highlight provisions in the Inflation Reduction Act (IRA).

ON THE PODCAST

Plugged In Takes on Permitting with CSIS Expert – Leaders on both sides of the aisle see the challenges when it comes to permitting reform, but “everybody agrees” that it’s necessary, according to Joseph Majkut, the director of the Energy Security and Climate Change Program at the Center for Strategic and International Studies (CSIS). Speaking to former FERC chairman Neil Chatterjee on this week’s "Plugged In" podcast, Majkut said there are several incentives for more permitting in the U.S., which could support programs to help build out clean energy infrastructure and affordable housing. "One of the key barriers to making capital investment in the United States, and one of the things you hear from nearly every business leader who wants to do that is that permitting is a challenge,” Majkut said. “It would make a meaningful difference if we were able to open up the floodgates for infrastructure investment from the private sector,” he added.

Global Coal Plants Still Significant – On this week’s Volts Podcast, our friend David Roberts looks into global coal use and its persistence.  In this episode, Roberts interviews Ted Nace, executive director of Global Energy Monitor, and Paddy McCully, executive director of Reclaim Finance. We talked about where the money to build coal plants is coming from, which sources are and aren't being cut off, and the next steps for anti-coal activism.

FUN OPINIONS

Columbia Expert Says Fix Ethanol – In a new commentary by Dr. Noah Kaufman—research scholar at Columbia’s Center on Global Energy Policy and most recently Senior Economist at the White House Council of Economic Advisers—highlights the limitations of the existing RFS. With statutory requirements expiring this year and a worsening global fuel and food crisis, Kaufman identifies an unprecedented opportunity for the EPA to phase out support for ethanol produced from corn.  

FROG BLOG

CDG Says Climate Efforts Must Be “Just Right” – In a blog post by the Center for Global Development, researcher Charles Kenney writes climate change may have only small effects on long-run global GDP. But that doesn’t mean climate change is a small problem any more than those past disasters were; it means that long-term global GDP trends probably miss a large part of a big problem. “Lukewarmers” who use long-term global GDP forecasts to downplay the urgency of climate change are considerably too sanguine. But “doomsayers” who see the whole world heading toward a future amounting to a hotter version of the stone age are also wrong. The economic impact of climate change will vary considerably by country, with much of the effect driven by shorter-term shocks. And misdiagnosing the climate problem—either as small or universally existential—matters: it drives poor choices in the global policy response.

FUN FACTS

Spotlight on Diesel:  Here is a little info on the latest diesel fuel issues:  

  • In the US, diesel inventories are 20% below the five-year average for this time of year.
  • The US has just 25 days of diesel supply in reserve, with some regions even tighter.
  • US diesel reserve has not been this low since 1951.
  • In the US, the Northeast is most exposed to the low inventories. 
  • Diesel prices are about 27% higher than the five-year average for this time of year.
  • The world is scrambling for diesel supply ahead of the looming EU embargo on Russian fuel imports, especially eastern Europe.

IN THE NEWS

AGA Warns Administration Steps Could Raise Energy Bills – The American Gas Association (AGA) is warning the Biden-Harris Administration that they could miss opportunities for meaningful energy efficiency and emissions improvements by instituting policies focusing on one energy source. The Administration made several announcements this week aimed at lowering energy costs for working families, but if not implemented correctly, they could have the opposite result. Vice President Harris traveled to Boston, MA to highlight provisions in the Inflation Reduction Act (IRA) passed in August. The U.S. Department of Energy also announced funds available to states and Tribes as part of the IRA for consumer home energy rebate programs. These funds will be used to switch customers only to electric appliances, including electric heat pumps. AGA is concerned that by ignoring a broad portfolio of options, including natural gas heat pumps and other efficient gas appliances, the Administration is missing a valuable opportunity to make home heating more affordable for the greatest number of households. According to the Energy Information Administration, families using natural gas for heat this winter can expect to pay $931. The average American home using electricity for heat will pay $1,359 this winter - 31 percent more. Homes heating with natural gas this winter could save between 12% and 62% compared to electrical alternatives, according to AGA’s Winter Outlook held October 17. Heat pump performance degrades as the outdoor temperature drops. To heat a home this winter, using an energy star high-efficiency condensing gas furnace could cost $766 compared to $869 with a cold climate heat pump or $1,067 if a home installs a standard energy star heat pump. In the past decade, families have signed up for natural gas space heating, rather than electric heat pumps, at a ratio of four to one. AGA strongly supports the Low Income Home Energy Assistance Program (LIHEAP). The $4.5 billion in LIHEAP funding announced by Vice President Harris is an annual allocation ahead of the heating season. As part of this annual allocation plan, HHS will allocate the remaining $400 million in the Spring for a total of $4.9 billion.

Coalition to Push for Hydrogen Hub – A newly formed coalition including major utility companies Dominion Energy, Duke Energy, Louisville Gas & Electric Company and Kentucky Utilities Company (LG&E and KU), Southern Company and the Tennessee Valley Authority (TVA), along with Battelle and others, announced today its plan to pursue federal financial support for a Southeast Hydrogen Hub. The coalition will respond to the recently announced funding opportunity from the U.S. Department of Energy (DOE), which includes $8 billion for regional hydrogen hubs and is part of the Infrastructure Investment and Jobs Act (IIJA). Other members of the Southeast Hydrogen Hub coalition will include a growing list of hydrogen users from a variety of industries in Alabama, Georgia, Kentucky, North Carolina, South Carolina and Tennessee. The coalition expects its membership to grow as news of the opportunity spreads and as interest in hydrogen intensifies. A hydrogen hub in the Southeastern U.S. is expected to bring robust economic development benefits to the region, and hydrogen is attractive as an energy resource because it has immediate potential to accelerate decarbonization in the Southeast and across all sectors of the U.S. economy – including transportation, which generates the largest share of greenhouse gas (GHG) emissions in the country. Hydrogen also is a dispatchable energy source, meaning it can be turned on or off as needed, enabling power companies to add more intermittent renewable resources to the energy system. Hydrogen may be poised to play a major role in addressing climate change and could be essential for each coalition member to meet its stated carbon-reduction goals:

  • Dominion Energy: Achieve net-zero greenhouse gas emissions across Scopes 1, 2 and 3 for all electric and natural gas operations by 2050.
     
  • Duke Energy: Achieve net-zero carbon emissions from electricity generation by 2050. The company has interim carbon emissions targets of at least 50% reduction from electric generation by 2030 and 80% reduction by 2040.
     
  • Louisville Gas and Electric Company & Kentucky Utilities Company: Along with parent company, PPL, LG&E and KU has set a goal to achieve net-zero carbon emissions by 2050, with interim reduction targets of 70% from 2010 levels by 2035 and 80% by 2040.
     
  • Southern Company: Achieve net-zero greenhouse gas emissions across electric and natural gas operations by 2050.
     
  • TVA: Achieve 70% carbon reduction by 2030 and approximately 80% carbon reduction by 2035. Aspire to net-zero by 2050.

By working together, the coalition can focus on developing scalable, integrated projects at key locations across the entire Southeast in support of these carbon-reduction goals and encourage the broad-based development of a regional energy ecosystem that will allow members to deploy hydrogen as a decarbonization solution for customers and communities.

AGA Report Says Gas Production Up – EIA data put together in the American Gas Association’s weekly market report says US dry gas production rose to an average 99.1 billion cubic feet per day for the week ending Oct. 26, up 2.6 bcf per day compared to the same time last year.  Weekly net injections into storage were lower than the same week last year, but the rate of injections through the April-October refill season is 4% higher than the five-year average. At the same time, Henry Hub and NYMEX futures rose week over week, too, and NYMEX contracts are trading today above $6 per MMBtu.

DTE Files Renewable Heavy Resource Plan – DTE Energy released its CleanVision plan, a 20-year proposal to dramatically transform how the company generates electricity as part of its clean energy journey, all while investing in a modern grid that is reliable and affordable. The proposed plan increases investment in solar and wind energy, accelerates the retirement of coal plants, and includes the development of new energy storage – all reinforcing DTE’s commitment to cleaner energy.  DTE plans to spend about $9 billion to add 4,400 MW of solar, 1,000 MW of wind and 760 MW of battery storage in the next decade, according to the utility’s integrated resource plan filed Thursday at the Michigan Public Service Commission. The plan includes converting the two units at DTE Electric’s 1,270-MW coal-fired Belle River power plant to a natural gas-fired plant in 2025 and 2026. DTE Electric’s plan calls for retiring two coal-fired Monroe power plant units totaling 1,535 MW in 2028, 12 years ahead of previous plans. It would shutter the plant’s remaining units in 2035, completing the utility’s exit from coal-fired power.

ON THE SCHEDULE THIS WEEK

COP 27 Begins in Egypt – The United National climate meetings (COP 27) began yesterday in Sharm el-Sheikh, Egypt. The conference will run through November 18th.

ELECTION DAY – Midterm Election, Tuesday November 8th

Wilson Looks at Korea Energy Issues – The Woodrow Wilson International Center for Scholars’ Korea Center, in cooperation with Institute for Far Eastern Studies (IFES), Kyungnam University, hold a featured discussion tomorrow at 8:00 a.m. with authors of Avoiding Meltdowns & Blackouts: Confidence-building in Inter-Korean Engagement on Nuclear Safety and Energy Development. This forthcoming publication explores key opportunities and challenges in inter-Korean energy engagement on the Korean Peninsula. 

Forum Discusses Private Energy Cap During COP Event in Egypt – The Columbia University’s Center on Global Energy Policy, along with the United States International Development Finance Corporation (DFC) and the Mo Ibrahim Foundation, hold a special event tomorrow at COP27 in Egypt to explore concrete actions that can be taken to mobilize private capital for energy opportunities in Africa and other emerging markets while pushing forward with aggressive climate action. The discussants will explore a range of ideas and issues including tools for de-risking emerging markets investments; novel approaches to blended finance to unlock and mobilize capital; and how the decision makers can ensure equitable solutions in finance.

Forum Looks at Offshore Wind in CA – The American Clean Power Association holds a forum next tomorrow at 11:00 a.m. on the challenges of offshore wind in California. The geology of the west coast of the U.S. poses specific and unique technical challenges: steep seabed slopes, earthquake risks, very deep waters, etc. Experts will present some of the unique aspects of offshore wind in California through different phases of project development.

Forum Focused on Post-Election Brazil – The Inter-American Dialogue will host an event tomorrow at 11:00 a.m. breaking down the elections results in Brazil as well as discussing what lies ahead for Latin America’s largest democracy. In this expert panel, they will explore the outlook for energy and climate policy in Brazil following election results. The discussion will focus on topics like hydroelectricity dependence, management of Petrobras, market liberalization, renewable auctions, fuel pricing policy, climate commitments, and deforestation. For more information and a list of speakers, see the agenda below.

AAAS Looks at Science, Diplomacy – The American Association for the Advancement of Science's Center for Science Diplomacy holds a webinar tomorrow at 11:00 a.m. focused on a decade of science and diplomacy. During the webinar, the speakers will talk about the pieces that are part of the issue, "A Decade of Science & Diplomacy," available here; the original contributions to the journal in 2012; and the state of science diplomacy throughout the last ten years.

Forum Looks at China NatGas Issues – On Wednesday at 9:00 a.m., the Atlantic Council’s Global Energy Center, Global China Hub, and Eurasia Center hold a discussion on “China-Russia natural gas ties and the role of Central Asia. With Gazprom’s Power of Siberia pipeline facing delays, Beijing has shown some signs of turning to Central Asia for natural gas. What factors weigh on Beijing’s natural gas and energy security calculus, and what constraints do Central Asian natural gas exporters face?

Heritage Looks at Energy in Next Congress – The Heritage Foundation holds a discussion on Wednesday at Noon on looking energy in the next Congress. Heritage’s Diana Furchtgott-Roth and energy experts Trisha Curtis and Lucian Pugliaresi share their predictions for the 118th Congress.

Forum Looks at Clean Energy Development Participation – The Clean Energy States Alliance holds a forum on Wednesday at 1:00 p.m. on innovative avenues to public participation in clean energy development. The discussion will highlight two impressive and impactful state programs in Connecticut and Washington that are accelerating the development of clean energy while increasing public participation in the process.

Forum to Look at European Energy Security – Georgetown University’s PREEA and SFS Energy hold a forum that brings together three energy experts from government, industry, and academia to explore the challenges European leaders will face this coming winter on Wednesday at 5:30 p.m. With Russia's continued aggressions in Ukraine, European energy supplies have been drastically reduced and disrupted. Three energy experts from government, industry, and academia will explore the challenges European leaders will face this coming winter.

RFF to Look at Climate Progress, Energy Crisis – On Thursday at 8:00 a.m. during COP 27, Resources for the Future (RFF) is hosting leading experts for a panel discussion hosted by on how nations in different regions globally are balancing and advancing goals related to decarbonization, energy prices and sources, and the future security and transition of the energy system.

Forum Looks at Critical Minerals – The Wilson Center's Canada Institute holds a discussion on Thursday at 10:00 a.m. on critical minerals and the strategic challenge and positive opportunities for Canada and the US.  The event is part of the Canada-United States Law Institute 2022 Experts' Meeting. This event brings together these Canadian and American leaders in both the public and private arena to share ideas and insights into critical minerals – their great importance for Canada and the United States, supply chain challenges as well as the roles of each country to develop its resources and address national security concerns and opportunities for enhanced cooperation.

UN Conference Focused on Food Security – As world leaders convene in Bali for the G20 summit, the Atlantic Council Global Food Security Forum is set for Saturday and Sunday (Bali local time) at the Sofitel Bali Nusa Dua Resort, will take a collaborative, cross-sector approach to addressing the global food security challenges of today, and envisioning more resilient food systems and supply chains of tomorrow. It will be simultaneously livestreamed for a virtual audience on Saturday at 1 a.m. ET and again at 8:30 p.m.

IN THE FUTURE

RFF Looks at US Climate Policy – Resources for the Future (RFF) holds a forum next Monday November 14th to explore the key details of these new laws and the road ahead for US climate action. Our expert panel includes leading voices from NGOs, the US federal government, business, including ClearPath’s Rich Powell.

Forum to Look at Mineral Supply Chains – Next Tuesday at 8:00 a.m., CQRollCall and the National Mining Assn hold a forum on mineral demands, supply chain vulnerabilities and our broken permitting process. Representatives from the Biden-Harris administration, members of Congress, analysts, industry experts, representatives from the auto and manufacturing industries, supply chain experts, and others for an event to discuss he skyrocketing need for minerals in the US, what needs to be done in the U.S. to ensure that these essential minerals are sourced here at home, creating secure/domestic supply chains and weaning the U.S. off of its reliance on geopolitical rivals like China and Russia.

Chamber Forum Set – The Chamber of Commerce Foundation holds its 2022 Corporate Citizenship Conference & Awards on November 16-17 in Washington, D.C. The forum will feature policy discussions, interactive breakout sessions and exclusive field trip opportunities to see impact in action.

Book Forum to Look at Sanctions, Success – On Wednesday November 16th at Noon, the Center on Global Energy Policy and the Center for a New American Security hold a fireside chat with Agathe Demarais moderated by Edward Fishman, CGEP Senior Research Scholar, CNAS Adjunct Senior Fellow, and former member of Secretary of State John Kerry’s Policy Planning Staff. Their discussion will focus on key findings of Backfire, the latest Columbia University Press release in the Center on Global Energy Policy series.

Forum Looks at Electrification – On Wednesday November 16th at 12:30 p.m., the American Security Project holds a forum on innovating out of the climate through electrification.  Policymakers, innovators, and entrepreneurs are already working to dramatically expand production and deployment of clean energy as well as develop new technologies that can improve air and water quality, minimize the impacts of climate change, and ensure energy security. Join us for a discussion on the growing electrification sector and the technological innovations and policy remedies that are making the clean energy transformation possible.

Latin American Energy Conference Set – The Inter-American Dialogue will hosts their Sixth Annual Latin America Energy Conference focusing on energy transformation. The conference will convene energy company executives, US and Latin American government officials, and international and nongovernmental organizations to discuss the most pressing energy policy issues in the hemisphere.

ICF Looks at Climate Impacts – On Thursday November 17th at Noon, ICF holds a conversation with the Director of the National Climate Assessment about the draft Fifth National Climate Assessment and the impacts of climate change on regions across the country. This webinar will include key updates on the impacts of climate change on regions across the country and opportunities for stakeholder groups to shape the assessment.

Forum to Look at NetZero – On Thursday November 17th at noon at the National Press Club, the Embassy Row Project holds a briefing will launch the International NETZERO Incubator & Accelerator project. Our goal is to spotlight technology leaders transforming the sustainability and carbon reduction space and strengthen international partnerships with government leaders who have made sustainability and carbon reduction part of their national strategies for critical infrastructure development. The International NETZERO Incubator & Accelerator project’s goal is to spotlight technology leaders transforming the sustainability and carbon reduction space and strengthen international partnerships with government leaders who have made sustainability and carbon reduction part of their national strategies for critical infrastructure development.

Energy Economists Look at Carbon Border Adjustment – The US Energy Economists hold their monthly luncheon on Friday November 18th at 1:00 p.m. on Carbon Border Adjustments. Mark Finley, Fellow at Rice University’s Baker Institute (and NCAC Council Member), and Rice University PhD student Joon Ha Kim, will present findings based on a recent paper with significant implications for analysis of the political and economic impacts of carbon border adjustments.

DC Energy Conference Set – The IN-PERSON 3rd Energy Transition Forum 2022 will be hold on Wednesday and Thursday December 7 & 8th at the Cosmos Club of Washington, D.C. The main focus of this year’s Forum is the US response to the global energy crisis. The Forum is an opportunity to gain market intelligence on the latest energy infrastructure such as LNG infrastructure, gas storage, O&G pipelines, power grids and power plants, renewable energy projects, upstream production, carbon capture and storage, hydrogen production, storage and transportation. Nearly 25 members Congress and other business leaders will speak.

BOEM Plans Dec. 6 Leasing Round for CA Offshore Wind – The Bureau of Ocean Energy Management has confirmed it will hold a leasing round for five offshore wind tracts in California's Morro Bay and Humboldt Bay areas on Dec. 6. The sites could support 4.5 gigawatts of capacity and would support both the Biden administration and California's offshore wind targets.