Energy Update: Week of October 28th

Friends,

One week to go!!!  And yes, almost everyone in the Swing States (except for Radio/TV advertising sales reps) are going to pleased-as-punch to see Election Day.  I was in Michigan over the weekend to visit my brother, go to the Mich-MSU game and of course, umpire the Michigan St–Northwestern field hockey game. OMG, the airwaves were absolutely flooded with Harris and Trump ads. The only real break from the ads came during the Wolverines Saturday Night 24-17 victory over Spartans to take the Paul Bunyon Trophy and the Lions’ 52-14 Sunday rout of Tennessee.

Both Presidential candidates are on overdrive with Trump coming off his rally at Madison Square Garden. He travels to Atlanta today, Allentown PA tomorrow, Wednesday with Brett Favre in Green Bay WI, Thursday in Henderson NV and Friday he lands in Milwaukee. VP Harris has a BIG “closing argument” speech on the National Mall tomorrow and then seems to be holding events with a number of stars, including today in Ann Arbor, MI with Maggie Rogers, Wednesday in Madison WI for a rally and musical concert by Gracie Abrams, Mumford & Sons and others, as well as Thursday for a rally and concert by Los Tigres del Norte in Phoenix, the night before the last day of early voting in Arizona. And thank goodness, we have finally heard from Leonardo DiCaprio and he is endorsing VP Harris.

From the White House, President Biden addresses infrastructure and climate programs in a speech tomorrow in Baltimore.

The big event this week is America’s Clean Power’s Offshore WINDPOWER Conference & Exhibition in Atlantic City. Key Speakers include NJ Gov. Phil Murphy, BOEM head Liz Klein and NABTU President Sean McGarvey. I will also be moderating a great panel tomorrow on the impacts of project misinformation. 

And in light of the Offshore Wind forum, Check out the new study from DNV titled “Second Wind: The Impact of Current U.S. Offshore Wind Investments on Future Costs.” It was released this morning in partnership with Turn Forward, estimates that current investments in offshore wind supply chain and infrastructure will drive up to a 14% cost reduction for future projects.

One other event on Wednesday: The University of Chicago is launching a new climate institute on Wednesday afternoon. Speakers include Gov. Pritzker and White House Climate Czar John Podesta.

Hope everyone has a GREAT Halloween. Daylight Savings Time ends on Saturday so enjoy the extra hour of sleep (Fall Back).  Remember to register for the Bracewell PRG Post-election Webinar on November 6^th at 10:00 a.m.

Call with any questions.

Best,

Frank Maisano

(202) 828-5864

C. (202) 997-5932                                                                                                                 

FRANKLY SPOKEN

“We need more than platitudes. We’re looking for specific pledges and a clear plan to phase out fossil fuel production and end environmental injustice.”

Collin Rees, with Oil Change International, saying the quiet part out loud when referring to what they expect from Kamala Harris should she become President.

ON THE PODCAST

POLITICO Talks EVs, Fracking – As the presidential candidates spend the final days of their campaigns trying to win over voters in Pennsylvania and Michigan, they're keeping fracking and EV politics in those in the public eye. To understand how these issues are playing with voters in these states, POLITICO Energy podcast host Josh Siegel recently spoke with two researchers: Chris Borick, a political science professor at Muhlenberg College in Pennsylvania, and Barry Rabe, a professor of public policy at the University of Michigan.

Bordoff Highlights AI Energy Challenges– In this week’s Columbia Energy Exchange, host Bill Loveless talks with Jason Bordoff and Jared Dunnmon about their latest co-written column for Foreign Policy, titled “America’s AI Leadership Depends on Energy.” It highlights the AI boom that is fueling a massive uptick in energy demand globally.

FUN OPINIONS

45V Flexibility Is Must for Hydrogen Success – In an opinion piece in Real Clean Energy, UT-Austin expert Hugh Daigle writes as the final stage of the 45V implementation process approaches, the Biden Administration has a unique opportunity to set a long-lasting precedent that balances environmental goals with economic innovation. The administration should correct its proposed regulations and adopt an emissions framework that allows for more accurate, project-specific data. By doing so, it will foster a cleaner, more competitive hydrogen industry – one capable of playing a critical role in the global energy transition.

FROG BLOG

NEPA Delays Costly for Clean Energy – In a blog for the Breakthrough Institute, Nikki Chiappa and Elizabeth McCarthy write NEPA is a major source of permitting delay for important clean energy infrastructure. NEPA lawsuits, filed disproportionately by large environmental NGOs, pose a real, sizable, and concerning risk to clean energy development and the future of American decarbonization. The most contentious NEPA challenges filed between 2013 and 2022, on average, delayed clean energy projects by just under 4 years. The majority of those lawsuits were filed by a small set of national NGOs who lost upwards of 70% of their cases.

FUN FACTS

Booming Gas Market: The US consumes about 32.3 trillion cubic feet of natural gas each year, or about 1/3 of US total primary energy consumption. Insert: the top 10 investor-owned natural gas utilities, in residential and commercial sales volume (in thousands of cubic feet, or Mcf).

IN THE NEWS

SAFE Report Outlines Trade Policy Roadmap for Critical Mineral Security – A new analysis from SAFE’s Center for Critical Minerals Strategy, “Trading Tensions: Navigating Policy Tools for A Diverse Critical Minerals Supply Chain” examines trade policy solutions to influence the flow of critical minerals with the goals of maintaining and building U.S. market presence, diversifying supply chains, and promoting higher global environmental and labor standards. Critical minerals are essential to the nation’s security, advanced industrial competitiveness, and energy resiliency—and are at the center of new geopolitical rivalries. Trade policy has emerged as an area of bipartisan alignment as U.S. policymakers work to confront global supply chain, manufacturing, and competitiveness challenges.

“While powerful and popular, trade policies are not a panacea for our minerals predicament. This report set out to give policymakers clarity on the tools that are available, the tradeoffs entailed, and accompanying policies that make for more effective implementation,” said Abigail Hunter, Executive Director of SAFE’s Center for Critical Minerals Strategy. “Trade policies for mineral resources should be coordinated with our allies, accompanied by diplomatic efforts, and implemented in conjunction with other economic tools.”

The report offers policymakers a thorough overview of the geopolitical landscape and our current supply chain vulnerabilities, and the challenges we face as 70-93% of the world’s lithium, nickel, cobalt, and other essential minerals are processed in China.

Treasury Opens Tax Credits for Minerals – The Biden Administration has unveiled final rules for the Advanced Manufacturing Product Credit, which officials say will boost domestic mining of critical minerals and reduce reliance on foreign materials from nations such as China. Last week, the Treasury Department and IRS released the final rules, which are meant to provide clarity on the tax credit available for U.S. manufacturers through Section 45X of the Internal Revenue Code. The final rules now allow taxpayers to claim the credit for material as well as extraction costs for producing critical minerals and electrode active materials. The administration said this will allow for more investments in domestic mining for critical minerals, thereby strengthening national energy security and boosting the supply chain. The tax credit will allow battery cell manufacturers to claim $35 for every kilowatt-hour produced and sold. Meanwhile, critical mineral producers can receive 10% back on their production costs.

“The U.S. has major deposits of critical minerals like lithium and palladium,” Deputy Secretary of the Treasury Wally Adeyemo said. “Extracting and processing them here in America, as opposed to relying on China, Russia, and other countries with weak worker and environmental protections, is an economic and national security priority for us.”

AGA Winter Outlook shows NatGas Bills Will Remain Stable, Low –  Natural gas customers should expect this winter’s heating bills to remain stable and relatively low, according to AGA’s annual Winter Heating Outlook. Natural gas storage levels remain near historic highs, providing significant cushion to maintain a reliable supply of natural gas throughout the winter. AGA analysis finds that:

• Demand for natural gas is growing due to industrial re-onshoring, growing electric power requirements, increased demand for exports and new natural gas consumers. However, the natural gas market is set to be well-supplied headed into the 2024-2025 winter heating season.
• Commodity prices are lower and are now in line with historical natural gas pricing trends. Strong levels of natural gas in storage and steady natural gas production have contributed to a well-supplied market.
• Lower commodity prices have translated to lower natural gas consumer bills.
• New infrastructure – and the permitting reform to enable it – is needed to meet growing demand.

Despite increased demand and a winter projected to be 5% colder than last year, natural gas customers should see winter energy bills approximately the same as last year and 16% lower than two years ago when weather conditions were similar to what is expected in the 2024-2025 winter season. When accounting for the increased use of natural gas for households in colder climates, those households heating with natural gas are expected to save between 59% and 100% on their heating bills compared to all-electric homes this winter.

Schneider Introduces Expanding Clean Fuel Production Act – Rep. Brad Schneider (IL-10), with Reps. Dan Kildee (MI-08) and Julia Brownley (CA-26), introduced today the Expanding Clean Fuel Production Act which would extend for ten years the Section 45Z clean fuel production credit. The Inflation Reduction Act created the clean fuel production credit (CFPC) for transportation fuel with zero or low greenhouse gas emissions, including sustainable aviation fuel (SAF). This credit currently expires at the end of 2027 and this bill would extend it for ten additional years, making the credit available through 2037. Schneider authored the tax credit for the production of SAF which was included in the Inflation Reduction Act in 2022 and aims to halve carbon emissions in the aviation sector. The credit was inspired by a SAF credit included in the Sustainable Skies Act, which Rep. Schneider authored with Reps. Kildee and Brownley in 2021. The credit was ultimately enacted in the Inflation Reduction Act in 2022, will transition into the CFPC in 2025, and will expire in 2027. SAF producers are eligible for a tax credit of $1.25 to $1.75 per gallon.

ON THE SCHEDULE THIS WEEK

ACP Offshore WINDPOWER Conference Set for AC – Today to Wednesday at the Convention Center in Atlantic City, NJ, America’s Clean Power holds its Offshore WINDPOWER Conference & Exhibition. The future of the U.S. offshore wind industry is bright but present challenges persist. This event is dedicated to convening top developers, government officials, and key stakeholders across the industry who are working to achieve the full promise of U.S. offshore wind.  Key Speakers include NJ Gov. Phil Murphy, BOEM head Liz Klein and NABTU President Sean McGarvey. I will also be moderating a great panel on Tuesday on project misinformation.  

Forum Look at RTO for West – The R Street Institute holds a virtual discussion today at 3:00 p.m. looking at an RTO for the West and how consumers might benefit. panel of experts will examine how an RTO could transform the West’s electric power grid and lead to significant economic and reliability benefits for consumers. Bloomberg’s Naureen Malik moderates a panel with Utah Consumer Service Director Michele Beck.

Forum Looks at Renewables Impacts – Decarb Connect holds a webinar tomorrow at 11:00 a.m. on innovative decarbonization solutions, aimed at leveraging renewable energy and alternative fuels in metals production. The webinar will be led by hard-to-abate experts from ENGIE Impact and ENGIE Lab CRIGEN who will explore the innovative solutions driving the metals industry toward a greener future, delving into alternative fuels and renewables.

Conservative Legal Group Looks at SCOTUS Cases – The Federalist Society for Law and Public Policy Studies holds two virtual discussions tomorrow on SCOTUS Cases. At 12:30 p.m., experts will look at agency action Post-Chevron, examining a Supreme Court ruling that sharply cut back the power of federal agencies to interpret the laws they administer.  At 3:00 p.m., they will discuss the Antiquities Act as a tool for conservation.

IEA Talks Energy Tech – The International Energy Agency holds a virtual media briefing on Wednesday at 11:30 a.m. Paris time (5:30 AM ET) releasing a new report, "Energy Technology Perspectives 2024" that  focuses on the manufacturing and trade of major clean energy technologies.

Forum to Look at Election Impact on Latin America – On Wednesday at 11:00 a.m., the Inter-American Dialogue holds a virtual discussion on the US election and the future of energy and climate in Latin America. The Inter-American Dialogue’s Energy Transition and Climate Program hosts Ambassador Paul Simons to answers questions to analyze how each party would address critical challenges to the Western Hemisphere. Simons will share valuable insights into the geopolitical ramifications, investment implications, and risks opportunities for Latin America and the Caribbean posed by each candidate.

Nuclear Strain: Looking Back at Brazil-US Nuclear Diplomatic Relations – On Wednesday at 11:00 a.m., the Wilson Center’s Brazil Institute will host an online event concerning the current conditions for Brazilian nuclear power, bilateral scientific and economic considerations, and the history of diplomatic relations between the US and Brazil. The multinational panel will include scholars and practitioners in nuclear energy and US-Brazilian diplomacy to discuss the evolving relationship between the US and Brazil in the nuclear area and its implications for future relations between these two countries.

UChicago Set to Roll Our New Climate Institute – On Wednesday at 2:00 p.m., the University will host Climate Frontiers: Energy and Climate at UChicago, a program of special events culminating in the unveiling of a new climate and energy institute. The program of events will demonstrate the scale and breadth of the University’s activities on energy and climate change and highlight how the new institute will be a world leader in achieving real progress as society works to balance the need for economic growth with the urgent priority of reducing greenhouse gas emissions. Speakers will include Illinois Governor J. B. Pritzker, White House Senior Adviser for International Climate Policy John Podesta, member of the Pakistan National Assembly and former Foreign Minister of Pakistan Hina Rabbani Khar, former US Senator Heidi Heitkamp, former DOE Under Secretary for Science Paul Dabbar, Exelon CEO Calvin Butler, and more.

Forum Looks at Mexico Energy Reforms – Wilson’s Mexico Institute holds a forum on Thursday at 11:00 a.m. looking at the energy outlook and implications of Mexico’s Constitutional energy reforms. The implications of this shift are raising questions about market competitiveness and the balance between public ownership and private enterprise in Mexico's energy landscape.

IN THE FUTURE

Election day for 2024 – Tuesday, November 5^th

COP 29 in Baku – On November 11^th, COP 29 begins in Baku.

Bracewell Environmental Seminar Set for Houston – Bracewell’s Environmental Section holds its Environmental Seminar on Thursday November 13^th in Houston.

Forum for Institutional Investors Looks at Politics – On Tuesday November 19^th, AIEN US Chapter Conference on Structured Finance for New Energies will be held in in New York. Bracewell’s Liz McGinley and Dee Martin will be participating in the program conducting a “fireside chat” with James Lucier from Capital Alpha Partners following the keynote topic “US Election Implications on New Energy Investments.”

Forum Looks at Hydrogen – Infocast’s Global Clean Hydrogen: American Production & International Markets Conference will be held in Houston on Wednesday November 20^th.  The event focuses on the development and expansion of clean hydrogen production in the United States and its potential for international markets, bringing together project developers, buyers, financiers, and industry experts to discuss strategies and insights on navigating the global clean hydrogen landscape. Bracewell’s Parker Lee will be moderating the panel on large scale private project development.

Major Hydrogen Conference Set for Houston – On December 4^th, ThomsonReuters Events Energy Live hold a 2024 Hydrogen Conference in Houston. Bracewell’s Tim Urban will be leading a panel discussion on the state of clean hydrogen with panelists including bp’s Tomeka McLeod, Plug Power’s Sanjay Shrestha and Ana Quelhas of EDP. FCHEA CEO Frank Wolak, SoCal Gas expert Neil Navin, Air Liquide’s Laura Parkan and Brett Perlman of the Center For Houston's Future also speak.

Congressional Energy Forum Set – EnergyStream holds the 5^th Energy Transition Forum 2024 on December 4^th & 5^th at the Cosmos Club of Washington, DC. The Forum brings powerful U.S. Senators and Congressmen from both sides of the aisle, together with top energy executives to explore in-depth the energy strategies and policies to achieve a sustainable, clean, reliable and affordable energy future.