PUTTING GEOTHERMAL ON THE SAME FOOTING AS OIL AND GAS: Geothermal is subject to more restrictive permitting on public lands than oil and gas, even though the drilling and extraction process is similar – a difficult-to-justify disparity that a bipartisan group of House lawmakers has now advanced legislation to address.
The issue with current law: The Energy Policy Act of 2005 provides categorical exclusions from National Environmental Policy Act reviews for permitting for drilling in public lands where drilling has occurred within the last five years, or where an approved environmental evaluation was completed within the last five years. But only for oil and gas – not for geothermal, even though geothermal has been pointed to as a clean, reliable source of energy.
The reform effort: The House Energy and Commerce Committee passed a bipartisan bill out of committee yesterday, introduced by Republican Rep. Michelle Steel of California and Democratic Rep. Susie Lee of Nevada, that would effectively put geothermal on the same footing as oil and gas.
“This bill will help unleash American energy independence by ensuring geothermal energy can be developed more easily in the United States, creating jobs and boosting the economies of cities and small towns, including those in California,” Steel said in a written statement.
Why is this an issue? For one, the majority of geothermal projects are on public land, meaning that they are subject to NEPA, noted Ben Serrurier, the manager of government affairs and policy at Fervo Energy, a geothermal company. Plus, the energy source simply hasn’t been popular – even though it’s been used commercially since the early 1900s.
“The oil and gas industry has been very effective in advocating for a permitting approach that works for their development,” said Serrurier. “But that’s a massive, massive industry across the U.S. The geothermal industry historically has been fairly small and contained to particular states in the West.”
Still, Serrurier said, new drilling technology and advancements to access the energy source could scale up its use.
Objections: There are some environmental impacts of geothermal to consider. While these projects emit less harmful emissions than traditional fossil fuels, geothermal projects do emit small amounts of greenhouse gasses, such as carbon dioxide and hydrogen sulfide. Furthermore, the extraction of geothermal can cause localized seismic activity if not properly contained.
House Natural Resources ranking member Rep. Raúl Grijalva said he is supportive of the goals of Steel’s bill but that the bill does not help to deploy the energy in any faster or safer way. The Arizona Democrat cited testimony from Bureau of Land Management officials that the agency is better situated to create categorical exemptions, rather than having them put in place through the legislative process.
Next steps: Staff from Steel’s office are planning on having conversations with leadership on a legislative pathway for the bipartisan bill, otherwise known as H.R. 6474, they told the Washington Examiner.
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INTERIOR EXPANDS WESTERN SOLAR PLAN TO INCLUDE FIVE ADDITIONAL STATES: The Biden administration expanded its proposed solar development plan yesterday for public lands in the West yesterday, a step it says is crucial to delivering on its renewable energy goals and reaching a 100% emissions-free power grid by 2035.
The new proposal is an update to the Bureau of Land Management’s 2012 Western Solar Plan. That plan identified federal acres across six Western states — Arizona, California, Colorado, Nevada, New Mexico, and Utah — that had high development potential for utility-scale solar power.
Now, aided by $4.3 million in funds from the Inflation Reduction Act, BLM announced it has refined the existing areas and added land in five additional states: Idaho, Montana, Oregon, Washington, and Wyoming.
Officials said they worked with the Energy Department’s National Renewable Energy Laboratory to estimate the land needed to meet Biden’s clean energy goals. They determined roughly 700,000 acres of public land would be required for solar development—far fewer than the 22 million public acres listed as having high solar development potential in the 11 U.S. states, and allowing for “maximum flexibility” as developers look to build out projects.
The proposal will be open for public comment through mid-April, Interior said. It expects to publish a final plan by the end of the year. Read more on that here.
RED SEA CONFLICT ESCALATES: The U.S. and UK launched airstrikes at 14 Houthi sites in Yemen last night in response to their attacks on merchant vessels in the area—an action that is almost certain to provoke more violence and further disrupt global trade.
The escalating conflict has forced many shippers to reroute away from the Suez Canal and travel around Africa’s Cape of Good Hope instead.
Additional energy companies such as Hafnia, Frontline, and Belgian-based Euronv joined the list of companies that said they will pause all Red Sea transit until further notice.
Shell’s CEO told the Wall Street Journal this week that it is expecting price increases between 5% and 10% as a result of the disruption. Meanwhile, Honour Lane Shipping (HLS) said it is “informally” predicting the crisis will last between six to 12 months. “If so, we expect the soaring freight rates and equipment shortage will continue till the third quarter,” the company said in a note to its clients, obtained by CNBC.
“If Total Suez Canal tanker transits are over 8 million barrels per day, the losses to the Canal Authority are probably in the range of $5 to $7 million depending on the mix of tankers going through,” Andy Lipow, president of Lipow Oil Associates, told the outlet.
Obtaining insurance has become increasingly difficult: Insurance premiums have soared in January, and some maritime providers have even started to deny coverage to U.S.- and U.K.- flagged merchant ships in the region.
“It’s a very uncertain time, and I think all of us are waiting to see the overall impact of the ongoing Operation Prosperity Guardian, and also the most recent strikes,” John Stawpert, a senior trade official at the International Chamber of Shipping, told Bloomberg.
IEA RAISES 2024 OIL DEMAND FORECAST: The International Energy Agency raised forecasted global oil demand for 2024 again—the third such upward revision it made to its report in as many months, citing higher economic growth and a potential supply surplus in the fourth quarter of the year.
The IEA now predicts global demand will rise by roughly 1.24 million barrels per day in 2024 compared to the last 12 months, a 180,000 bpd increase compared to its last forecast.
“Barring significant disruptions to oil flows, the market looks reasonably well supplied in 2024, with higher-than-expected non-OPEC+ production increases set to outpace oil demand growth by a healthy margin,” the Paris-based agency said in its report. Still, the group acknowledged that disruptions in the Middle East—which makes up one-third of global oil trade—have injected uncertainty into markets.
The group’s updated forecast still falls short of OPEC’s prediction for demand to increase by 2.25 million bpd in 2024.
BYD EXPANDS INTO INDONESIA AS IT LOOKS TO BROADEN GLOBAL REACH: Chinese automaker BYD announced it will invest $1.3 billion in an EV factory in Indonesia, as the company—which overtook Tesla as the number-one EV company last quarter—looks to take advantage of the country’s vast nickel and copper resources.
BYD’s Indonesia chief Eagle Zhao said the facility will have a production capacity of roughly 150,000 vehicles, and said construction is on track to begin later this year.
“As part of our long-term commitment, we envision building an EV ecosystem and fostering development in Indonesia,” Zhao said.
The news comes as Indonesia and other critical minerals-rich countries have pushed for more EV companies to build out local factories, in a bid to drive economic growth and create jobs at home, rather than send the materials overseas for manufacturing.
BYD in particular has seized on this opportunity, and has announced plans for EV plants in five countries outside China besides Indonesia: Brazil, Hungary, Mexico, Thailand, and Uzbekistan.
CARBON DIOXIDE REMOVAL LEADERSHIP ACT BACK AGAIN: Reps. Paul Tonko and Scott Peters, along with Sens. Chris Coons and Sheldon Whitehouse, are reintroducing their bill, the Carbon Dioxide Removal Leadership Act – a measure that would require the DOE to remove emissions through carbon capture and storage, and would enact standards for monitoring and reporting carbon removals.
The bill was introduced during the last Congress as well. Read more about the bill here.
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