Subscribe today to the Washington Examiner magazine and get Washington Briefing: politics and policy stories that will keep you up to date with what’s going on in Washington. SUBSCRIBE NOW: Just $1.00 an issue!
THE BATTLE OVER RUSSIAN GAS: European leaders only just agreed to a sixth sanctions package with terms for a Russian oil embargo but attention is already on to the next and most divisive front of the energy war: reducing dependence on Russian natural gas.
The problem for the European Commission is more one of rate than principle.
The European Council, less than three weeks after Russia invaded Ukraine, approved language agreeing to phase out Russian fossil energy “as soon as possible,” but the length of the off-ramp or the punitive measures which member governments are willing to accept varies widely, and it’s pretty closely correlated with levels of reliance on the Russian stuff.
What leaders are saying: “I think that the gas has to be in the seventh package but I’m a realist as well, I don’t think it will be there,” Estonian Prime Minister Kaja Kallas said yesterday.
The ratio of Russian gas in Estonia’s energy mix most recently has been very high, between 80-90%, but Estonia’s dependence on gas for overall energy consumption is in the single digits.
Meanwhile, Austrian Chancellor Karl Nehammer said the situation with gas is “quite different” than with oil, which he said is easier to compensate for.
“Therefore the gas embargo will not be an issue in the next package of sanctions either,” he said.
Austria’s dependency rate, a measure of its net imports in gross available energy, was just over 58% in 2020, meaning that more than half of its energy needs were met by net imports.
Germany’s dependency rate neared 64%, while Italy’s was 73.5%. Leaders of the two leading European economies have been especially resistant to aggressive measures targeting Russian gas imports.
Gazprom’s shutoffs: For another angle into the Europeans’ divergence over sanctions and gas policy, consider how differently EU members have responded to Vladimir Putin’s demand that they pay for gas in rubles or risk shutoffs.
Some buyers acquiesced even before the European Commission laid out its most explicit guidance to ensure doing so wouldn’t breach sanctions.
Others, including Italy’s Eni, jumped after the commission said members could comply without breaching sanctions.
At the same time, Poland, Bulgaria, and Finland declined, and Gazprom retaliated with shutoffs. Dutch firm GasTerra was shut off yesterday after declining to agree to the rubles arrangement, and Denmark’s Orsted, too.
The U.S. angle: President Joe Biden offered Europe something of a dispensation when he introduced his ban on Russian imports on March 8.
“We’re moving forward on this ban, understanding that many of our European Allies and partners may not be in a position to join us,” he said at the time.
Meanwhile, Sen. Ted Cruz is ready to intervene.
“Nord Stream 1 allows Russia to continue raising funds for its war on Ukraine and holding Europe hostage to energy blackmail,” Cruz tweeted yesterday. “The U.S. must support Ukraine’s call to suspend it.”
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.
INTERIOR LOWERS COSTS FOR WIND AND SOLAR ON PUBLIC LANDS: The Biden administration is slated to lower costs for wind and solar development on federal lands, Interior Department Secretary Deb Haaland announced yesterday, seeking to attract new renewable energy investments and help deliver on the administration’s clean energy goals.
The new policy is expected to drive down costs for solar and wind projects in the U.S. 50%, according to a Bureau of Land Management estimate, a decrease caused by lower rent prices and a standard megawatt fee. The agency is also seeking to meet a congressional mandate requiring it to permit at least 25,000 megawatts of renewable energy on public land by 2025.
As part of that effort, the Interior Department will also establish five new offices of Renewable Energy Coordination in Arizona, California, Nevada, Washington, and Utah, which it said will aid in expediting the processing of renewable energy environmental reviews. Read more from Breanne here.
NEW YORK SUSPENDS GAS TAX: New York announced it is suspending its state gas tax for the rest of the year, seeking to provide drivers in the state with a bit of relief at the pump as gas prices in the U.S. remain at record highs. The move to suspend New York’s gas tax—which stands at 16 cents per gallon—follows similar efforts passed by a number of states. It also comes as national gas prices reached an average of $4.67 a gallon, per AAA.
ENERGY DEPARTMENT SPREADS NEW HYDROPOWER FUNDING: The Energy Department announced $8 million worth of grants yesterday for three projects testing and demonstrating technologies to make hydropower generation more efficient and flexible with demand.
One of the project developers, Massachusetts-based Littoral Power Systems, received $3 million to help with designing an upgrade system for existing hydropower plants which, as the department explains, consists of a novel pump-turbine that can be added to existing dams to improve their ability to adjust electricity output while decreasing wear and tear on equipment.
What DOE funding can’t buy: Better hydro conditions. The top three states for hydropower generation are in the West — Washington, California, and Oregon — where sustained drought conditions, especially in California, are expected to strain the regional power system throughout the summer.
The Energy Information Administration anticipates the drought to drive a drop in California’s hydroelectric generation that will “alter the generation mix in California, resulting in an increase in wholesale power prices in the West and higher carbon emissions.”
EIA estimates drought conditions could result in a reduction of the state’s hydroelectric generation by half relative to normal levels.
DWS HEAD TO STEP DOWN FOLLOWING GREENWASHING OFFICE RAID: Asoka Woehrmann, CEO of Deutsche Bank’s DWS Group, is stepping down from his role after German police searched company offices yesterday in Frankfurt. Woehrmann will leave the executive board on June 9.
Deutsche Bank’s announcement did not make mention of yesterday’s incident, during which around 50 law enforcement personnel visited its and DWS Group’s offices as part of an investigation into allegations that it misled investors about the sustainable investment products.
The office of Frankfurt’s public prosecutor said the raid was carried out in connection to reports that “when marketing so-called ‘green financial products,’” DWS had “sold these financial products as ‘greener’ or ‘more sustainable’ than they actually were.”
TO ‘BUILD BACK BETTER,’ INDUSTRY MUST FIRST BE ALLOWED TO BUILD, SAYS FORMER TRUMP OFFICIAL: On this week’s “Plugged In” podcast, former FERC chairman Neil Chatterjee was joined by Alex Herrgott, a permitting expert who formerly led the Federal Permitting Improvement Steering Council during the Trump administration. The two discussed the complicated process of completing new infrastructure projects in the U.S., including navigating a complex system of laws and regulatory standards.
“The reality is that 20 to 30% of all project costs—whether it be a broadband line, a transmission line, a new windmill, a new solar facility— 20% [to] 30% of that is attributed to permitting costs,” Herrgott said, adding that, for America to “build back better,” the administration must first allow the industry “to build.” Listen to the full episode here.
The Rundown
Washington Post Biden wants to rebuild the EPA. He doesn’t have the money to do it.
New York Times How a Florida power project flew under the regulatory radar
Associated Press Japan court: Nuclear plant’s tsunami safeguards inadequate
Calendar
WEDNESDAY | JUNE 1
3:00 p.m. The Environmental Law Institute will host a webinar event titled “Finding the Path to a Necessary Future: California, Climate, and Energy in the Coming Decades.
WEDNESDAY | JUNE 8
10:00 a.m. 406 Dirksen The Senate Environment and Public Works Committee will consider the nominations of Annie Caputo and Bradley R. Crowell to be members of the Nuclear Regulatory Commission.
