WHAT’S HAPPENING TODAY: Good afternoon and happy Wednesday, readers! Did you miss your chance to see the Northern Lights last night? Don’t worry, meteorologists and space weather forecasters are tracking another strong geomagnetic storm hitting our atmosphere that will likely light up the skies again tonight 🌌.
If you’re wanting to catch a glimpse, try to find an unobscured view that allows you to look toward the northern horizon. The less light pollution the better! If you can’t see it with the naked eye, try using your smartphone, as low-exposure photos often will highlight the iconic hues. Check out this photo to see what the auroras looked like in Washington, D.C., last night 📸.
In the meantime, enjoy today’s edition of Daily on Energy, in which we dive into the International Energy Agency’s latest forecasts on oil and gas demand (spoiler: they’re walking back last year’s peak prediction). Plus, another utility company is expecting to be asked by the administration to extend the life of another coal plant 🏭. Keep reading to find out which one.
Welcome to Daily on Energy, written by Washington Examiner energy and environment writers Callie Patteson (@CalliePatteson) and Maydeen Merino (@MaydeenMerino). Email cpatteson@washingtonexaminer dot com or mmerino@washingtonexaminer dot com 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.
IEA REVERSES COURSE, PREDICTS FOSSIL FUEL DEMAND WILL GROW: One year after predicting that fossil fuel demand would peak by the end of the decade, the International Energy Agency is now saying that demand will continue to grow over the next several decades.
In its World Energy Outlook report released this morning, the IEA estimated that if there are no major policy changes aimed at curbing fossil fuel use, oil and gas demand will not peak by 2050. The IEA now estimates that crude demand will rise to 113 million barrels per day by 2050, with gas demand jumping to 5,600 billion cubic metres in that same timeframe.
If nations follow through on all proposed green policies, oil demand would likely peak at 102 million barrels per day around 2030, while natural gas demand would only increase by around 1% annually to 2035. In both cases, coal demand is expected to decline.
Some context: In today’s report, the IEA reintroduced its “Current Policies Scenario” which has not been used for five years. This scenario, better known as CPS, provides a baseline forecast for oil and gas demand based on current laws, regulations, and markets. The IEA stopped publishing this scenario in 2019 as it shifted to forecasts that were more optimistic about renewable energy growth.
Last week, the Paris-based agency said it halted the CPS due to turmoil and rapid changes seen in the “policy landscape” brought on by the coronavirus pandemic.
While IEA said there is now “merit” in revisiting this scenario, it comes at a time when the Trump administration is actively championing the fossil fuel industry and urging allies to walk back green energy commitments. Energy Secretary Chris Wright also blasted the IEA’s modeling in July, telling Bloomberg that his preference was to “reform” how the IEA makes its predictions.
You can find the full report available to the public here.
MEANWHILE…OIL PRICES PLUNGE: While the IEA’s report estimated that the prices of oil and gas would rise over the next 25 years, crude prices plunged this afternoon.
Both international and domestic benchmarks were down by around 4% just after 3 p.m. EST. West Texas Intermediate dropped by 4.42% and was selling at $58.34 per barrel. Brent Crude also fell by 3.94% and was priced at $62.59 per barrel.
Some analysts have said that the reopening of the government may boost consumer confidence in the markets and spark new demand for crude. However, as prices drop, ongoing fears of oversupply appear to overshadow the odds of that outcome.
CHEVRON CO-LOCATING TEXAS DATA CENTER WITH GAS: Chevron is further committing to boost oil and gas production through the end of the decade, choosing to use the energy resource to power a massive artificial intelligence data center in West Texas.
The details: Chevron confirmed today that it has chosen the Lone Star state as the location for its first AI data center project. The oil and gas major will be co-locating the facility with a new natural gas-fired power plant that is expected to be in service and pumping energy as soon as 2027. Chevron first announced its plans to co-locate data centers with natural gas in late January.
Ahead of today’s announcement, the company told Bloomberg that this first project will ultimately have the capacity to generate as much as 5 gigawatts of power. It will take some time for the power plant to reach that milestone, as Chevron is expecting to produce around 2.5 gigawatts of power by its third year of operation. The power plant will likely be built separately from the existing grid in West Texas.
The announcement came as part of Chevron’s latest five-year plan released for its investor day. In the plan, Chevron said it expects to grow oil and gas production to 2-3% annually through 2030.
“We believe Chevron is uniquely positioned to grow earnings and free cash flow into the next decade,” Mike Wirth, Chevron CEO, said in a statement. “Never in my career have I seen a higher confidence outlook, further into the future and with lower execution risk; Chevron is stronger, more resilient, and better positioned than ever.”
UTILITIES EXPECTING MORE ORDERS TO KEEP OLD COAL PLANTS OPEN: The Trump administration is reportedly planning to increase pressure on utility companies to keep aging coal power plants open past their planned retirement dates, as part of its efforts to revive the coal industry.
What we’ve seen so far: In late May, the Department of Energy ordered for the J.H. Campbell coal plant to extend operations for 90 days – just one week before it was scheduled to close. The administration at the time insisted that the extension was necessary to meet high energy demands during the summer season. In August, DOE directed utility Consumers Energy and Midwest grid operator MISO to keep the plant open even further through November.
What’s coming: The Tri-State Generation and Transmission Association confirmed to Canary Media that it is expected to receive a similar order from the Energy Department to keep Unit 1 of its Craig Station coal plant online past its scheduled closure.
“Based on conversations with the U.S. Department of Energy, we believe that it is likely that we will receive an emergency order before the end of the year,” Tri-State spokesperson Mark Stutz told the outlet.
If it does receive the order, it would place unwanted pressure on the electric cooperative, as it has said that it is legally required to shut the unit down but that it also has economic reasons to do so.
EUROPEAN UNION INCHES CLOSER TO DELAYING DEFORESTATION BAN…AGAIN: The European Union appears to have enough support among its member states to delay its controversial deforestation ban by one year.
The details: People with knowledge of the discussions told Bloomberg that representatives of member states signaled support for the delay today. The move comes just weeks after the European Commission proposed softening requirements related to the deforestation rule, which is set to go into effect on Dec. 30.
Under the commission’s proposal, the deforestation ban would still go into effect at the end of the year but would offer relief to small operators and larger businesses in low-risk countries by not requiring full checks and enforcement for an additional six months to one year.
Sources told Bloomberg that delaying the ban entirely would make the commission’s proposal no longer necessary. Several member states wish to see the law enforced in its current form, and avoid any softening of the language.
Some liberal members of the European Parliament have suggested that delaying the deforestation ban would appease the Trump administration, which has increased pressure on the EU to soften its climate and environmental related regulations.
Quick reminder: The deforestation ban was first approved by the EU in June 2023 and is intended to reduce the number of products consumed in the region that contribute to deforestation, while also reducing carbon emissions. Once in effect, the law will prohibit products made from commodities such as coffee, palm oil, soy, cocoa, cattle, wood, and rubber that were imported from recently cleared forests or contributed to forest degradation.
COP30 PROTESTERS: At the United Nations annual climate summit, indigenous protesters entered the conference to demand action on climate change mitigation and forest protection.
Reuters reports that the protesters clashed with security guards at the entrance, with some waving flags calling for land rights. Security guards pushed back the protesters and used tables to block the entrance, the publication said.
Nato, an Indigenous leader from the Tupinamba community, said, “We can’t eat money. We want our territory free. But the business of oil exploration, mineral exploration, and logging continues.”
The UN climate summit, or COP30, started earlier this week, bringing thousands of government and indigenous leaders as well as climate activists to Brazil. The summit is expected to feature discussions about how governments could better reduce their emissions, as many have fallen short of their targets. Trump and his administration have chosen to skip the climate talks this year.
GLOBAL EV SALES ROSE IN OCTOBER: Global sales of electric vehicle and plug-in hybrids rose 23% in October to 1.9 million units, the market research firm Rho Motion told Reuters.
China accounted for more than half of the global EV sales. China’s EV companies are thriving in the market as they provide advanced technology at a lower cost. Rho Motion said there was strong growth also in Germany, France, and the United Kingdom.
In North America, EV sales were down 41% following record highs in August and September ahead of the $7,500 EV tax credit expiring thanks to the One Big Beautiful Bill Act.
The numbers: Chinese sales rose to about 1.3 million vehicles. Europe sales went up 36% to 372,786 units. North American sales dropped 41% to 100,370 vehicles.
Rho Motion data manager Charles Lester told Reuters that “Chinese automotive market is expected to show strong growth in November and December, helped by pull forward effect as the country is moving from a full purchase tax exemption to just a 50% exemption on [new energy vehicles].”
ICYMI – CHINA PLANS TO KEEP US MILITARY FROM OBTAINING ITS RARE EARTH MAGNETS: China plans to block companies with ties to the United States military from obtaining its rare earths, the Wall Street Journal reported earlier this week.
The WSJ reported that China plans to use the “validated end-user” system or VEU to allow its rare earths to flow to the U.S. but ensure they don’t end up with U.S. military suppliers, according to people familiar with the plan. The plan may still change, and its licensing system will not be certain until it is implemented, the WSJ said.
Rare earth magnets are used in various applications across the energy and defense sectors, including in jet fighters and drones. China has used its dominance in the rare earth sector as leverage against the U.S. Trump and Chinese President Xi Jinping reached a truce last month for Beijing to ease its export restrictions on rare earths.
RUNDOWN
USA Today Northern lights could be visible across the US again tonight. See where.
E&E News Inside the oil industry’s efforts to sway regulatory comment periods
Washington Post Where the sky keeps bursting
