LNG PAUSE TIMELINE: Biden administration officials are giving hints as to when the pause on liquified natural gas exports could come to an end.
During energy conference CERAweek, Energy Secretary Jennifer Granhom said that the pause will end within a year.
“By the time we meet here at this place next year, it’s going to be long in the rear-view mirror,” Granholm said.
And she’s not the only one dropping hints on the timeframe of the pause. White House Senior Climate Advisor John Podesta said the Department of Energy’s studies “will be subject to public comment this summer.”
Why it matters: This is the first time White House officials have given some semblance of a timeline for the LNG exports pause, after weeks of rebuffing the question. During an interview at the National Press Club, Granholm had stated that she would not “put a timeframe on it.”
“We’re working as fast as we can,” Granholm said in February. “It is going to take a lot of information.”
Note, though: Granholm’s comments, specifically, are a bit ambiguous – they could mean that the pause is going to be lifted with exports resuming, or they could mean the very opposite.
This also comes as Republicans and conservative groups have been upping their efforts to press the administration to end its pause. Just yesterday, GOP Sens. Dan Sullivan, Roger Wicker, Jim Risch, and John Barrasso wrote to Podesta to halt the pause, highlighting the geopolitical implications of such a move. House Oversight Republicans are launching a probe into the LNG export pause, arguing that the move was politically motivated to appease liberal advocacy groups – the second probe from the House, after the Science, Space, and Technology Committee previously sent a letter requesting a briefing on the pause. And in a letter to the DOE, nearly 150 state and local chambers of commerce joined the U.S. Chamber of Commerce in calling for an end to the pause, arguing it undermines economic growth and global security.
But: The White House officials’ comments also stand to be a blow to environmentalists, who have called for even further action from the Biden administration. A letter from more than 560 U.S. and international advocacy groups, sent earlier this month, called for expanding the pause to halt the permitting of new LNG infrastructure and export projects across all federal agencies and commissions.
“It makes no sense to halt LNG on one hand and advance it with the other,” the letter reads. “All permits for new LNG and related infrastructure should be rejected.”
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THE POTENTIAL OF GEOTHERMAL: A new report from DOE says that new technologies can expand geothermal power by more than twenty-fold, with the possibility of providing roughly between 90-300 gigawatts or more of clean energy to the grid by 2050.
Geothermal has long been viewed as an appealing source of clean energy that’s more reliable than renewables, as it can provide energy 24/7 without the same amount of emissions as fossil fuels. But there are significant challenges, the report outlines, to getting geothermal off the ground…or up from the ground, as the case might be.
The challenges detailed in the report: high up-front costs and risks, perceived and actual operability risk for deployments, long and unpredictable development lifecycles, business models undervaluing the potential of the energy’s development, and community opposition.
Reality check: Despite an estimated 40 GW of potential geothermal energy in the U.S., only 9 GW has been identified to date, and only 3.7 GW is producing power, the report says. We’ve reported extensively about the different efforts from Congress to streamline the approval process for geothermal – read that here and here.
GAS PRICE WATCH: Gas price futures hit a six-month high of $2.77 Monday, Bloomberg reports, on news of disruptions at Russian refineries hit by Ukrainian drone attacks.
Gas prices at the pump are near $3.50, the highest seasonal average in two years, according to AAA.
Oil prices continued climbing Tuesday, with WTI above $83 and Brent above $87. Drone strikes have reportedly knocked out 600,000 barrels of Russia’s daily oil refining capacity.
LEGAL WAR OVER CHINESE BATTERY PLANT IN RURAL MICHIGAN: Chinese battery maker Gotion has sued Green Charter Township in rural Michigan over its town board voting to rescind a plan to extend the water supply to the site of Gotion’s planned electric vehicle battery plant, the Detroit Free Press reports.
The project had been backed by Gov. Gretchen Whitmer and Republicans in the state legislature and awarded $715 million in incentives. But Gotion has been scrutinized for its ties to the Chinese Communist Party. Members of Green Township’s board were recalled over their support for the project, leading to the reversal of local backing.
Now Gotion is asking a federal judge to issue an injunction forcing the board to live up to the agreement made by its previous members.
LAFFER BACKS CARBON TAX AS TRUMP CONSIDERS HIM FOR FED POST: The supply-side economist Art Laffer backed a carbon tax in comments to E&E News, an interesting development given that he is reportedly being floated as a contender for chairman of the Federal Reserve by advisers to Donald Trump.
“If you think there’s a carbon problem in the atmosphere, you put on a carbon tax and take the proceeds and reduce the income tax, dollar for dollar, and you don’t kill the economy,” Laffer told E&E News in an interview about his visit to Mar-a-Lago to meet with Trump.
Of course, the Fed chairman is not responsible for tax policy, and a one-for-one swap of carbon tax revenues for income tax revenues raises a host of political and policy questions. Still, it’s an interesting comment from Laffer, who has built a career on promoting tax cuts and is allied with many critics of carbon pricing.
RELATED…WARREN AND WHITEHOUSE SAY FED HURTING CLEAN ENERGY: Sens. Elizabeth Warren and Sheldon Whitehouse told Fed Chairman Jerome Powell that his efforts to bring down inflation are hurting the buildout of clean energy, and called on him to cut interest rates to make projects more viable.
“The Fed’s interest rates have stalled progress and hampered the country’s ability to combat the climate crisis,” the two Democrats wrote Powell in a letter dated yesterday, citing the hit to EV demand and the rising costs for offshore wind projects that have come with higher interest rates.
Note, though: The Fed raised interest rates in an effort to bring down inflation, which soared throughout the past few years. Its intent was to ease price pressures by lowering demand for goods and services across the board – and that includes sectors such as autos and offshore wind. Housing, most notably, has taken a massive hit because of higher interest rates, leading to calls from other members of Congress for rate cuts. But Powell and other Fed members have made clear they won’t try to ease monetary policy until it’s confirmed that inflation is returning to the central bank’s target.
GOOGLE, MICROSOFT, AND NUCOR TEAM UP ON PURCHASING CLEAN ENERGY TECH: The tech giants Google and Microsoft and the steel producer Nucor announced today that they would join to aggregate their demand for clean power technologies, including advanced nuclear, next-generation geothermal, clean hydrogen, and long-duration energy storage. They’re going to focus on advanced technology pilot projects for the near term, and are issuing a request for information in several regions.
The companies have individually explored advanced nuclear and other clean tech, but said in a press release that such technologies face difficulties securing financing because of the novelty and risks – problems that they aim to ameliorate by “developing new commercial structures and aggregating demand from three of the world’s largest energy buyers.”
TERRAPOWER TO START CONSTRUCTION ON FIRST U.S. NEXT-GEN NUCLEAR PLANT: TerraPower, the Bill Gates-backed nuclear power startup, said it would start construction on the first U.S. next-generation nuclear reactor in Wyoming in June.
CEO Chris Levesque told the Financial Times that the company would apply for a construction permit this month and begin construction in June regardless of whether it received a permit from the Nuclear Regulatory Commission. Work can begin on non-nuclear aspects of the plant thanks to the innovative design of TerraPower’s sodium-cooled Natrium reactors, he said. The goal is to bring the plant online by 2030.
The reactor is to be built near the coal-fired Naughton Power Plant in Kemmerer. The site was chosen and received federal backing as part of an effort to help coal-producing regions as the use of fossil fuels is phased down.
TerraPower is also studying the feasibility of building five more reactors across western states by 2035.
RUNDOWN
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