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FRACKING REVISITED: After years of competing with and, according to former U.S. and NATO officials, funding opposition to U.S. and European frackers, the Kremlin is driving wary westerners back toward fracking.
European governments have been working hard to find alternatives to both Russian pipeline and liquefied gas in order to become more independent and to keep money from flowing to Vladimir Putin, as well as to bring down energy prices.
That’s leading some to rethink restrictions on exploiting shale gas reserves.
The U.K. government last week commissioned the British Geological Survey to review the safety of fracking, which is currently subject to a moratorium, now that the war in Ukraine has locked in and exacerbated high energy prices.
Business secretary Kwasi Kwarteng says the government is keeping “all possible energy generation and production methods on the table.”
Separately, a mix of British business leaders have begun a campaign of their own, urging the government to lift the moratorium and start “to frack gas under our feet,” the Daily Express reported.
The pressure had already been on from some Conservative MPs, who want to source more natural gas at home and dispute the argument underpinning the ban, which is that it’s unsafe.
What’s the holdup: Prominent Tories have resisted an end to the moratorium in large part because of public opposition to fracking.
That may well not be a problem now. A new poll found 52% of people support “maximizing” fossil fuels until the U.K. can reach adequate scale of renewable energy.
Then, there’s Germany: Bavarian Minister-President Markus Soder said over the weekend a law banning fracking should be revisited and that leaders “have a constitutional duty to keep an unbiased eye on all options in such extraordinary times of crisis,” Euractiv reported.
Soder name-checked the U.S., where gas prices have stood around eight and ten-fold cheaper than Europe’s benchmark in recent months.
“The Americans have made themselves completely independent of the Middle East through fracking,” he stated.
Putin’s shale hatred: Ironically, Russia’s actions are reviving interest in fracking, whereas its leaders sought for years to interrupt the expansion of fracking in the West to knock out competitors.
House Oversight Republicans recently noted testimonies of both Fiona Hill, former U.S. National Security Council Senior Director for Europe and Russia, and former NATO Secretary-General Anders Rasmussen, which recognized that Russia’s gas marketshare was threatened by fracking.
Rasmussen said Russia worked with NGOs to discredit fracking, while Hill said Putin saw American fracking in particular “as a great threat to Russian interests.”
Daniel Yergin, vice chairman of S&P Global, also recalled an angry Putin responding to his question about diversity of the Russian economy during the St. Petersburg Economic Forum years ago.
“By accident, I mentioned the word shale. He interrupted me, started shouting at me, said ‘shales are barbaric,’” Yergin said last week during the LNG Allies’s gas forum. “And I realized at that time that he basically didn’t like shale for two reasons. One, because it would compete with Russian gas in Europe. He saw that coming … and two, that it would change the position of the United States in the world.”
The timeline: Kwarteng made clear that neither fracking, nor his government’s new energy strategy for more nuclear, wind, and North Sea oil and gas extraction, are immediate solutions to high prices.
He said last week “it remains the case that shale gas extraction is not the solution to near-term price issues.”
On the larger energy security strategy, he said it’s “more of a medium-term three, four, five-year answer.”
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RUSSIAN IMPORT BAN NOW LAW: The ban on Russian oil imports is now the law of the land. President Joe Biden signed the “Ending Importation of Russian Oil Act” on Friday, a month to the day after he ordered a ban on imports via executive action.
A consensus quickly emerged that continuing normal trade with Russia amounted to funding the war itself. The bill was one among numerous other proposals like it, which lawmakers across the political map began introducing in the days after Russia moved into Ukraine in late February.
Aside from putting blocks on imports, the bill also gives the president new sanctions authority, as well as the authority to lift the import ban, subject to congressional approval.
Republican Sen. Lisa Murkowski, who contributed language to the bill, emphasized that it goes beyond Biden’s executive order.
“It’s important to recognize this legislation is not redundant,” said Murkowski. “It’s ensuring substantive steps will be taken so that the sanctions stay in with some level of reliability.”
What to do in lieu: Since the import ban was first ordered, the Biden administration has announced its intention to progressively release Strategic Petroleum Reserve crude oil over the course of six months in addition to its asking producers to increase their output.
Officials have also been talking with Canada, the U.S.’s top foreign oil source, in hopes of bringing in more oil, the Wall Street Journal reported last week.
For their part, Republicans are insistent that the U.S. has all the oil it needs right here.
“There is no question that Alaska can and would do more to produce the energy and minerals that America and the world need, if only the administration would partner with us instead of blocking us at every turn,” Murkowski said in a statement Friday.
OIL PRICES DOWN AGAIN: Oil is down today, trading at intra-day lows not seen since the war in Ukraine began.
West Texas Intermediate crude fell to near $93 per barrel and remains around $94 as of this writing. Brent, meanwhile, is in the $98 per barrel range.
MOUNTAIN VALLEY PIPELINE ON THE MOVE: The Federal Energy Regulatory Commission issued an order Friday unanimously approving the Mountain Valley Pipeline’s proposal for construction around protected wetlands.
The West Virginia-Virginia natural gas pipeline project still has multiple regulatory approvals to secure, but FERC’s decision “represents substantial evidence of federal regulatory support for the project in response to actions taken by a motivated project sponsor,” ClearView Energy Partners said in a note.
Republican lawmakers, as well as West Virginia Democrat Joe Manchin, have been all over the Biden administration and FERC in recent weeks in pressing for swifter approvals.
The MVP especially, which FERC acknowledged in its Friday order has faced “several permitting challenges” slowing its construction, has become a totem of this campaign supporting domestic fossil fuel extraction with faster regulatory approvals in the face of the war in Ukraine.
“We have an ocean of energy under our feet with the Marcellus-Utica Shale,” Manchin said last week during the Transatlantic Energy Security Forum IV we covered.
“I talked to the White House [who] said, ‘What can we do to help you?’ I said, ‘Build the damn line. Finish it,” Manchin said, referring to the MVP.
GRANHOLM PRESSED ON CYBERSECURITY: Leaders of both the House and Senate energy committees want the Department of Energy to be more involved in the protection of the energy sector from cyberattacks.
Senate Energy and Natural Resources head Manchin and Ranking Member John Barrasso, along with House Energy and Commerce leaders Frank Pallone and Cathy McMorris Rodgers, set out their expectations in a letter to Secretary Jennifer Granholm on Friday and said it is “urgent that DOE fulfill its duty as the lead agency” on cybersecurity issues.
“DOE’s energy sector expertise and well-established partnerships with industry are critical in managing risk in today’s threat environment,” they wrote. “We fully expect that DOE will discharge its lead cybersecurity and emergency response efforts for the energy sector in close coordination with DHS as it has done for years.”
The sector recently received FBI warning that activities tied to Russian IP addresses were detected and that the agency suspected targeters were preparing for “potential future intrusions.”
STRONG POLLING SUPPORT FOR CLEAN ENERGY MEASURES: New polling from Gallup indicates that there is wide support for the climate portions of Biden’s agenda.
Support ranges from 61% for electric vehicle purchase tax credits to 89% for providing tax credits for families to install solar. Big majorities also favor stricter fuel efficiency standards for cars and regulating methane emissions.
The polling shows the popularity of the kinds of clean energy tax credits that Manchin has said he would support in a reconciliation package. The problem for Democrats remains that those credits are packaged with the other parts of the Biden Build Back Better agenda.
The Rundown
Bloomberg War gives oil producers greater clout at global climate talks
Wall Street Journal Gas price surge fuels fights at FedEx, Uber over who will pay
Calendar
TUESDAY | APRIL 12
1:00 p.m. The R Street Institute will host a virtual event with former FERC commissioners Neil Chatterjee, Pat Wood, and Nora Brownell titled, “Competitive Electricity Policy: Past, Present and Future.”
