Daily on Energy: A request for FERC, electricity prices still soar, and a ‘drill, baby, drill’ update

And keep reading to find out how many active oil and gas rigs there are as majors like ConocoPhillips move forward to layoffs brought on by lower crude prices. 

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.

QUOTE OF THE WEEK: While the Trump administration has emphasized the importance of securing enough energy to meet the demands of artificial intelligence and get ahead of China in the AI arms race, not everyone is convinced we can easily reach that goal. 

“The gap between what AI is demanding and what we have everywhere in the world on the grid in terms of generation and transmission is huge and will not be closed in our lifetime,” Dave Stangis, head of sustainability strategy with asset management firm Apollo Global Management told Bloomberg this week. 

“So what is happening around the world, there’s no doubt about it, is what you might call energy addition. The world is scrambling to add every source of power,” Stangis added. 

DOE URGES FERC TO SPEED UP GRID CONNECTION FOR DATA CENTERS: Energy Secretary Chris Wright is directing the Federal Energy Regulatory Commission to initiate a rulemaking process to fast track the connection of large loads, such as data centers, to the grid. 

Wright sent a proposal late Thursday to FERC, asking the independent agency to initiate a rulemaking process to expedite the connection of both large loads and colocated facilities whose energy use can be curtailed and dispatched to the grid. 

The proposal includes several reforms for FERC to consider during its rulemaking process, including requiring loads to pay the full costs of network upgrade. It also proposed that load and hybrid facilities should be studied alongside generating facilities. The reforms apply to new loads and to hybrid facilities with a capacity greater than 20 megawatts. 

Wright’s proposal to quickly add large loads to the grid is part of the Trump administration’s effort to lead in artificial intelligence technology. However, the proposals come at a time when Americans are dealing with high energy costs linked to the growth of data centers and artificial intelligence. 

DOE also proposed another rule stating that third parties cannot deny preliminary permits on hydroelectric power.

Read more by Maydeen here. 

PLUS…LAURA SWETT OFFICIALLY NAMED CHAIR: President Donald Trump has formally named Laura Swett as chairman of the Federal Energy Regulatory Commission, bringing David Rosner’s short stint as head of the commission to a close. 

“I am honored to serve as Chairman of FERC and grateful for President Trump’s confidence in me to advance America’s energy priorities at such a critical moment in our Nation’s history,” Swett said in an official statement. “I look forward to working with my colleagues and FERC’s excellent staff to continue the Commission’s crucial mission of ensuring reliable and affordable energy for all consumers.”

Some background: As we touched on in Daily on Energy last week, Swett is expected to serve on the commission through June 2030. She was nominated to FERC in June and was officially confirmed by the Senate to the seat earlier this month. 

Swett, who specializes in energy litigation, previously served at FERC for five years under the second Obama administration and the first Trump administration. She was primarily an attorney adviser for the commission, and later worked as a senior legal and policy adviser for former commissioners Kevin McIntyre and Bernard McNamee. 

ELECTRICITY PRICES CONTINUE TO RISE: Electricity prices are rising faster than inflation year over year, and the overall cost of energy also continues to soar, the Bureau of Labor Statistics reported today in the last consumer price index.

The details: Electricity prices rose by 5.1% for the year ending in September, nearly double the rate of inflation, which was about 3% for the year. The cost of electricity did fall by 0.5% from the month before, offering some relief for consumers overwhelmed by increasing bills and concerns that soaring demand will hike prices further. 

While energy services, including utility gas, were down for September by about 0.7%, the cost of these services was also up by 6.4% for the year. Only prices for energy commodities, including gasoline, saw yearly decreases of about 0.5%. However, gasoline prices did rise month to month by 4.1%. 

Broadly, energy prices increased by 1.5% from the month of August and were also up by 2.8% for the year. 

A driving force: Paul Cicio, chairman of the Electricity Transmission Competition Coalition, believes that transmission costs have been the biggest driver of rising costs. He has repeatedly urged FERC to mandate transmission projects be subject to competitive bids, which he claims can reduce costs by about 25%.

“Competition promises fair prices for Americans. A competitive market means accountability, innovation, reliability, efficiency, and modernization,” Cicio said in a statement.

Read more from Callie here

‘DRILL, BABY, DRILL’ UPDATE: Domestic oil and gas producers continued to see some relief this week as the number of active drilling rigs in the U.S. increased for the second week in a row. 

The details: Data released by Baker Hughes this afternoon shows that two rigs were added within the last week, bringing the total of active rigs to 550. Broken down further, there were four offshore rigs added to the total, however, two rigs located in inland waters and onland were closed. 

The total number of oil and gas rigs active in the U.S. now is still dozens fewer than those seen this time in 2024. Baker Hughes estimates there are roughly 35 fewer rigs than the end of October last year. 

Plus..where prices stand: Some have attributed the volatile drilling habits to low crude oil prices seen throughout the year, as domestic and international benchmarks have stuck around the $60 line for months. Just after 2 p.m. EST, West Texas Intermediate was down 0.23% selling at around $61.65. Brent Crude was actually up this afternoon by 0.14% and priced at around $66.08 per barrel. 

EXPORTING NATURAL GAS FROM ALASKA’S NORTH SLOPE: The Trump administration is reportedly considering storing natural gas produced in the North Slope of Alaska and exporting it directly from that region. 

The details: Interior Secretary Doug Burgum proposed the idea earlier today during an event held by the Foundation for the Defense of Democracies, adding that unnamed foreign investors have expressed interest, according to Bloomberg. 

“It could be a second project, just tapping into that gas field and figuring out a way to move it out by ship,” Burgum said. 

Shipping natural gas from the North Slope could prove difficult, primarily due the region’s icy landscape. This would likely limit when an export facility, which would cost billions of dollars to construct, could actually be built. Burgum attempted to assuage concerns by reportedly insisting that there are conservative months when ships would be able to pass through the ice. 

JUMPERS IN YOSEMITE NATIONAL PARK CONVICTED: The National Park Service said that three men were convicted today for illegally BASE jumping in Yosemite National Park. 

BASE jumping is when an individual parachutes from fixed objects like buildings, antennas, bridges, or cliffs. It is prohibited in all national parks. The jumpers convicted this month showed off their jump here on social media. NPS said it is investigating three different cases that occurred earlier this month.

NPS has been dealing with staff reductions due to the government shutdown. Earlier this week, hundreds of NPS employees sent a letter to the Department of the Interior, requesting that the parks be closed due to staffing shortage. The employees cited the recent incidents of jumping and squatters at Yosemite National Park. 

Since the shutdown, NPS has furloughed 9,296 of its 14,500 employees, according to its contingency plan. 

ICYMI – BIG OIL CONTINUES TO BE HIT BY LOW PRICES: Major oil and gas companies are continuing to lay off staff as crude prices have remained in the low $60s for months. 

The details: ConocoPhillips is reportedly slashing employees from its Canadian operations as soon as the first week of November, according to a company memo obtained by Reuters. Employees of the firm’s Calgary office will reportedly be notified on November 5, and those in northern Alberta and British Columbia will be informed the next day. 

At the end of 2024, ConocoPhillips was employing around 950 people in Canada. It was not immediately clear how many of those would be let go next month. Earlier this fall, the oil major confirmed that it would be cutting its global staff by 20-25% – equivalent to more than 3,000 people worldwide. 

 “We will not be sharing area-specific workforce numbers for current or impacted employees and contractors,” ConocoPhillips spokesperson Dennis Nuss told Reuters. 

RUNDOWN 

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