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EUROPE FED UP: Europe is moving beyond warning that Russia is going to cut off natural gas supplies to actively preparing for such an eventuality – even as President Vladimir Putin said he doesn’t intend to reduce the flow of gas.
Europe set to ration gas: The European Commission today called for member nations to curb their gas consumption by 15%, proposing mandatory cuts in the case of a gas emergency as a desperation measure to survive the winter.
Russia is still prevaricating: Russia has continued to hem and haw as to when it will resume gas deliveries via the key Nord Stream 1 pipeline, currently shut down for a planned 10-day maintenance period. (It had been slated to go back online tomorrow, but even that remains unclear, as Russian state-owned gas giant Gazprom awaits delivery of a turbine piece expected to be delivered July 24. Its installation is anticipated to take another 2-3 more days, putting it on track to resume deliveries closer to the end of the month.)
Putin said last night that Gazprom would fulfill its commitments, telling reporters that the state supplier “has always fulfilled and will fulfill all of its obligations.”
But in almost the same breath, Putin noted that yet another turbine on the line is due for maintenance on July 26, dangling the possibility of extending painful gas disruptions even longer, since the part in question—like the first—would also need to be sent back to Montreal for repair.
“There are two functioning machines there, they pump 60 million cubic meters per day … If one is not returned, there will be one, which is 30 million cubic meters. Has Gazprom something to do with that?” Putin said, according to Russian media outlets.
EU leaders noted this week that in June, overall Russian gas flows to Europe were less than 30% of the average supply the bloc received during the last five years.
In a speech this morning, European Commission President Ursula von der Leyen stressed the necessity of the EU’s emissions reduction effort, telling leaders: “I think we should be very clear[:] Gazprom has proven to be a completely unreliable supplier.”
“And behind Gazprom is, as we know, Putin,” she said. “So it is not predictable what is going to happen.”
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BIDEN TO ANNOUNCE ACTIONS ON WIND AND FEMA FUNDING: President Joe Biden will stand in the shadow of a retired coal-fired power plant this afternoon to announce next steps on moving his climate agenda forward now Democrats’ reconciliation package is looking all but out of reach.
The visit to Somerset, Massachusetts, follows a pledge Biden made Friday to take “strong” executive action where the Senate doesn’t act to pass spending and tax credits for green energy.
Biden will announce actions related to offshore wind development, as well as additional funding for FEMA’s Building Resilient Infrastructure and Communities program, which helps state and local governments mitigate the risks of natural disasters, according to a White House preview shared with reporters.
He will also announce additional guidance related to the Department of Health and Human Services Low Income Home Energy Assistance Program.
Define ‘strong’: Environmental groups expressed frustration with what Biden is expected to announce and demanded that he move to declare a climate emergency.
“This declaration will either show young people that Biden gives a damn about our futures, or be a further slap in the face to our generation that’s feeling utter despair and frustration of the failure of Democratic leadership,” Lauren Maunus, advocacy director for the Sunrise Movement, said on a call with reporters this morning.
About that climate emergency: Press Secretary Karine Jean-Pierre teased yesterday that a climate emergency could happen at some point in time — but not today.
Democrats have wanted Biden to declare a climate emergency going back months. The Congressional Progressive Caucus put out a list of recommended actions for Biden to take in the weeks after the war in Ukraine began. Invoking the Defense Production Act to produce and acquire more green tech was among the bunch, as was a climate emergency.
Others have piped up since Sen. Joe Manchin attached a giant asterisk to negotiations over energy and climate spending last week. Sens. Sheldon Whitehouse and Jeff Merkley told reporters earlier this week that Biden should explore using the National Emergencies Act.
Merkley pointed to former President Donald Trump’s use of emergency powers to build a border wall as a “test run” for how the law could be used.
Progressive Caucus member Reps. Earl Blumenauer and Alexandria Ocasio-Cortez also wrote Biden yesterday to tell him he should use powers under the NEA, the DPA, and the Stafford Act on an emergency basis.
What about a deal: Manchin followed up reports last week that he wouldn’t back a reconciliation package with climate stuff in it by suggesting he’d be open to those kinds provisions, so long as he could see July’s inflation numbers first and ensure that Congress wouldn’t be doing anything “inflammatory” to inflation with the bill.
In previewing Biden’s speech today, a White House official said yesterday that Biden will make clear that “since Congress is not going to act on this emergency, he will,” indicating that the administration isn’t holding out for Manchin again.
Sen. John Hickenlooper, though, cautioned people yesterday against “throwing in the towel” on an agreement.
“We’re much closer to a climate deal than people realize,” he tweeted.
TRADE DISPUTE – U.S. CHALLENGES MEXICO OVER STATE-OWNED ENERGY: The Biden administration is seeking dispute settlement consultations with Mexico over its energy policies, citing concerns that President Andrés Manuel López Obrador’s government is favoring its state-owned utility and oil companies over U.S. businesses in a possible violation of the United States-Mexico-Canada Agreement.
U.S. Trade Representative Katherine Tai cited concerns over operations of two state-owned energy companies—the Federal Electricity Commission, or CFE, and Pemex, an oil and gas company—that Obrador has worked to strengthen during his time in office. “We have repeatedly expressed serious concerns about a series of changes in Mexico’s energy policies and their consistency with Mexico’s commitments under the U.S.M.C.A.,” she said, adding that the policies in question discourage “investment by clean-energy suppliers and by companies that seek to purchase clean, reliable energy.”
The USMCA bars member countries from enacting policies that favor their own state-owned enterprises or discriminate against the others.
The U.S. said Mexico has repeatedly brushed aside complaints raised over the last 18 months: “We have tried to work constructively with the Mexican government to address these concerns, but, unfortunately, U.S. companies continue to face unfair treatment in Mexico,” Tai added.
U.S. trade officials plan to contest several actions taken by Obrador’s government, including a 2021 amendment to Mexico’s electricity law that prioritizes CFE-generated power over private providers, including those who incorporate cleaner power sources such as wind and solar.
Under USMCA, the U.S. and Mexico must start consultations within 30 days. Should they fail to reach resolution there, the U.S. can request to establish a panel of experts to determine whether Mexico’s actions are consistent under the trade agreement.
If that panel sides with the U.S., and Mexico still declines to update its policies to align with its promises under USMCA, the U.S. could impose import tariffs on Mexican products as a way to offset the damages. Read more from the Wall Street Journal here.
TEXAS POWER USE SOARS TO RECORD-HIGH FOR THE NINTH TIME THIS YEAR: Texas electricity demand soared to a record-high for the ninth time this on Monday, as extreme temperatures and rising population continue to strain the state’s power grid. According to the Electric Reliability Council of Texas, or ERCOT, which operates the grid for roughly 26 million Texas customers demand rose this week to more than 78.9 gigawatts during the hour ending at 5 p.m local time.
That’s the ninth time ERCOT demand has set new record-breaking highs this year, and the eighth time in the last five weeks alone. ERCOT’s interim chief officer, Brad Jones, told Bloomberg he is confident the grid is equipped to keep power flowing through the hot summer months—but that assessment will be put to the test yet again this week, with demand slated to rise today to another record-high of 81.5 gigawatts—inching closer to ERCOT’s “extreme summer projection” of slightly more than 82.1 gigawatts.
NERC REFLECTS ON 2021 GRID ISSUES: The United States’s grid regulator released this morning its review of grid performance in calendar year 2021, outlining a number of vulnerabilities within the bulk power system alongside recommendations to make it more reliable.
While the North American Electric Reliability Corporation’s 2022 “State of Reliability” report emphasized that its report does not single out individual entities, it makes frequent reference to Texas’s grid failures during Winter Storm Uri, which caused the single largest controlled outage event in history U.S. history and contributed to 246 deaths.
NERC put together six key findings, including that the electric and natural gas systems have become interdependent to the point that it requires “immediate attention” to insulate systems from the kinds of issues that Texas saw in February 2021, where pipeline flows were interrupted or stopped, putting gas-fired units offline. Power outages then fed a disruptive cycle by leading to interruptions in gas production.
NERC notes that gas is a critical resource used for electricity generation and for maintaining generation balance alongside renewables.
“At the same time, reliable electric power supply is often required to ensure uninterrupted delivery of natural gas to these balancing resources, particularly in areas where penetration levels of renewable generation resources are highest,” NERC said.
Other findings: NERC’s report also concluded that climate change and extreme weather put exceptional strain on the bulk power system, noting two extreme cold events, including Uri, as well as Hurricane Ida and tornadoes in December across the Southeast and Midwest.
It also described security threats to the grid in 2021 as “unprecedented and relentless” due to cyber attacks, supply chain issues, and COVID-19.
The Rundown
Bloomberg Canada export bank plans 15% cut to oil & gas portfolio by 2030
Reuters How Boeing created a nature preserve that may also preserve pollution
E&E News Calif.’s last nuclear plant faces closure. Can it survive?
Bloomberg As Britain swelters, UN warns of worsening heat waves to at least 2060
Calendar
THURSDAY | JULY 21
10:00 a.m. The Senate Energy and Natural Resources Committee will hold a business meeting where several bills, as well as the nomination of Laura Daniel-Davis to be an assistant secretary of the Interior and minerals management.
