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WHAT’S AT STAKE WITH WILLOW: President Joe Biden and his Interior Department face what’s perhaps the most consequential environmental and political decision of his presidency in deciding the fate of ConocoPhillips’s Willow project in Alaska.
Interior just finalized its supplemental environmental analysis for the project, and the Bureau of Land Management will be taking comment on it for the next month from political players and interest groups from which it there have been two prevailing sentiments:
- The project should have been permitted yesterday
- Biden’s legacy on climate change is on the line
Read on for what’s at stake and where things are headed…
Welcome to Daily on Energy, written by Washington Examiner Energy and Environment Writers Jeremy Beaman (@jeremywbeaman) and Breanne Deppisch (@breanne_dep). Email [email protected] or [email protected] for tips, suggestions, calendar items, and anything else. If a friend sent this to you and you’d like to sign up, click here. If signing up doesn’t work, shoot us an email, and we’ll add you to our list.
CONTINUING WITH THE WILLOW PROJECT: ConocoPhillips has had the mineral rights to the areas covered by the Willow project for more than two decades and began the process to develop them in 2018.
Willow’s master development plan seeks to develop five drill sites in the National Petroleum Reserve in Alaska, as well as supporting road and bridge infrastructure, to support the ultimate production of 180,000 barrels of oil per day over the course of three decades. ConocoPhillips estimates the project as pitched would produce up to some 629 million total barrels of oil over 30 years.
A 2020 record of decision, which the U.S. District Court of Alaska threw out less than a year later at the request of environmental plaintiffs, conditionally approved the five drill sites.
What Interior prefers: The department’s environmental impact statement identified an alternative that provides for three drill sites vs. the proposed five.
The BLM’s analysis estimated that the proposed project would produce some 283,956 metric tons of carbon dioxide, while its preferred alternative would generate 277,582 metric tons. Interior said it has “substantial concerns” about the project and the preferred alternative.
A lot is riding on the project politically. Republican lawmakers and Democratic power player Joe Manchin have made a lot of Biden’s trip to Saudi Arabia last year and the easing of sanctions on Venezuela in pushing for policies that are more favorable to U.S. oil and gas production, including production on federal lands.
House Republicans came out swinging in the new Congress against Biden’s energy policies, which they will take up in one form or another in at least four separate hearings this week. If he decides to run for reelection, Biden will doubtless have to deal with attacks against his administration of the leasing program.
The administration could in the same breath find plenty of justifications to block the project. Biden wants to cut U.S. greenhouse gas emissions by at least half in 2030. Moreover, the International Energy Agency’s net-zero-by-2050 target, one Biden shares, provides for no approvals of new oil and gas fields beyond 2021.
Promises made, promises kept…to a point: Biden pledged to restrict drilling and leasing on public lands during his campaign, and the Interior Department followed through via Biden’s oil and gas leasing moratorium until it was rebuffed in court and subsequently given new leasing directives from Congress in the Inflation Reduction Act.
The Biden administration has been leasing new acreage while simultaneously adding some new restrictions, including by shrinking the amount of acreage available for leasing in the NPR-A.
On Willow, the administration has also shown some measure of ambivalence (if it can be called that). Interior was pretty clear last week that it isn’t especially comfortable with the project, although it defended and sought to uphold the Trump-era record of decision approving the project.
The bureau has not been slow to reject Trump-era authorizations in other areas.
BLM has adopted an “apparent position that it cannot meaningfully limit ConocoPhillips’ activities on its leases and cannot select the no action alternative has no basis in the law,” Earthjustice wrote in comments to the bureau’s draft EIS, saying Willow’s approval would transgress Biden’s promise to combat climate change.
Supporters of the project maintain that it’s on firm legal ground and is exactly the kind of thing Congress sought when it created the NPR-A.
“It’s not a matter of whether or not you think it should happen. It’s a legal right to develop. They have a right to develop their lease,” a former BLM career official who now works for a member of Congress told Jeremy, downplaying the legal case that the administration has authority to unilaterally block the project.
“This isn’t an [environmental NGO’s] project. The BLM has a responsibility when an application comes in to develop to respond. It’s a legal obligation,” the person said.
TURKEY SUSPENDS OPERATIONS AT KEY OIL EXPORT HUB FOLLOWING QUAKE: Turkey temporarily halted crude export flows via its Ceyhan oil terminal this morning after the country’s south and northwest Syria were struck by a powerful 7.7-magnitude earthquake, killing thousands and causing massive building and infrastructure damage in both countries.
The Ceyhan export terminal, located roughly 96 miles from the epicenter of the earthquake, is a crucial hub for oil sales from northern Iraq and Azerbaijan, and exported roughly one million barrels of oil per day last month, or 1% of total global supplies. The suspension caused oil prices to climb early Monday, though it is unclear how long the temporary shutdown will last.
The earthquake also damaged some parts of Turkey’s local gas transmission network, according to state-owned pipeline operator BOTAS, causing outages in the provinces of Gaziantep, Hatay, and Kahramanmaras.
Energy officials said they were conducting safety inspections to check for leaks and would convene for an emergency meeting later in the day.
Oil pipelines appear to have been spared: Turkish officials said neither its Kerkuk-Ceyhan oil pipeline linking it to Iraq nor its Baku-Tbilisi-Ceyhan oil pipeline were damaged in the quake, and flows continued as usual along those lines.
CHEVRON IN TALKS FOR ALGERIAN GAS DEAL: Chevron is reportedly in talks to clinch an energy exploration deal in Algeria, as the North African country seeks to help offset Russian gas supplies in the EU.
Over the past two months, Chevron has sent a cadre of government relations officials, business representatives, and security officials to Algiers to meet with business and government officials, according to the Wall Street Journal. Chevron also hired consultants to assess Algeria’s shale and non-shale gas resources, and secured agreement with a state agency to access data on its three largest natural gas reservoirs.
“Algeria holds a world-class petroleum system with significant potential for conventional and unconventional oil-and-gas exploration,” a spokeswoman said.
Algeria’s recoverable shale resources rank behind only China and Argentina, according to the Energy Information Administration.
It has also emerged as a large supplier of gas to Europe following Russia’s invasion of Ukraine: Algerian state-owned company Sonatrach is the third-largest exporter to the continent, and its gas imports now account for more than one-quarter of demand in both Spain and Italy,
The news comes just months after the U.S. granted Chevron a license to resume pumping oil in Venezuela after years of strict sanctions, and as it looks to increase its international operations. The company said it plans to spend $17 billion on energy projects this year.
THOUSANDS OF TEXANS STILL WITHOUT POWER AFTER WINTER STORM: Tens of thousands of homes and businesses in Austin are expected to remain without power for another week, officials said last night. Residents say they’ve been kept in the dark, both figuratively and literally, about the status of repairs following last week’s winter storm.
As of this morning, more than 25,000 Austin Energy customers were still without power, due in large part to downed trees and power lines caused by the snow and ice. Outages are now expected to last through Sunday, Feb. 12—despite the fact that temperatures have warmed to upward of 75 degrees and the rest of the state has returned to business as usual.
On Saturday, Texas Gov. Greg Abbott issued a disaster declaration for seven counties in and around Austin, all of which he said had experienced “significant” damage from the storm.
For many, the sustained blackouts were a cruel reminder of Uri, the deadly 2021 winter storm that killed more than 240 people and caused a near-collapse of the state’s power grid.
The outages—which caused blackouts for 400,000 residents during the storm’s peak— have prompted new concerns about Texas’s extreme weather preparedness and its grid capacity, especially during the winter season.
Many also criticized Texas for failing to address widespread problems with its emergency communications system in the two years since Uri: Austin Energy said on Twitter Wednesday that its customers should be prepared for power outages of between 12-24 hours, which it later extended through Thursday night. On Thursday, it said it could no longer provide an estimate for when power would be restored. Its online reporting tool also crashed, leaving many without crucial information through Sunday night.
The Austin Energy Utility Oversight Committee will begin examining the response to the storm at a hearing next week.
FRENCH LAW TO MANDATE SOLAR PANELS ON LARGE PARKING LOTS: France is expected to pass legislation this week requiring all “substantial” parking lots, or those larger than 16,000 square feet, to install raised solar-panel canopies that cover at least half the surface area of the lot.
The legislation, which could be approved as early as Tuesday, would apply to all parking lots that can accommodate 80 French cars, or 50 American cars, which tend to be larger.
The government says the plan could generate up to 11 GW of capacity, or the equivalent of 10 nuclear reactors. It is also expected to reduce electricity costs for consumers by 7%.
The bill is an effort by France to expand its emissions-free power generation beyond nuclear power, which it relies on for roughly 70% of its energy mix. “There is a paradox. Though our electricity production is one of the most carbon-free in Europe, we are still behind in the development of renewable energies. This bill intends to resolve this contradiction,” Damien Adam, a National Assembly lawmaker, told his colleagues last month.
The Rundown
Wall Street Journal U.S. car makers’ EV plans hinge on Made-in-America batteries
E&E News Biden energy agenda exposes regulatory gap
Financial Times US companies say EU climate goals are deterring new gas deals
Calendar
MONDAY | FEBRUARY 6
3 pm. Ceres will host an event titled “Climate and 401(k) Plans: The DOL’s New Rule Levels the Field for ESG.” Labor Secretary Marty Walsh will be a keynote.
TUESDAY | FEBRUARY 7
10 am. 2123 Rayburn. The House Energy and Commerce subcommittee on Environment, Manufacturing, and Critical Materials and the subcommittee on Energy, Climate, and Grid Security will hold a hearing on lowering U.S. energy costs and strengthening supply chains. Learn more and watch the event live here.
WEDNESDAY | FEBRUARY 8
10 am. Location TBA. The House Transportation and Infrastructure subcommittee on Water Resources and Environment will hold a hearing to examine stakeholder perspectives on the impacts of the Waters of the United States (WOTUS) rule. Learn more here.
