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RUSSIAN RESET: The chaos which Russia’s invasion in Ukraine unleashed into global energy markets is forcing leading governments to reset their strategies for cutting loose from fossil fuels and getting to net-zero emissions.
Russian fuels carry a lot of weight in the global market, and the European Union’s “Fit for 55” emissions reduction plan was developed in a world where member governments generally anticipated that Russia’s abundant oil and gas supplies would be available to them to the extent they would need fossil fuels during their transitions away from such fuels.
Now, with the EU gameplanning a breakup with Russian energy, Europe is scrambling to figure out how it will make up for the loss of oil and gas once it begins to cut Russia out of the picture.
The climate hawkish Germans had expected Nord Stream 2 to deliver additional gas to the country for years to come to displace coal and retiring nuclear generation, but now the pipeline looks like it will forever be a stranded asset.
German Chancellor Olaf Scholz said late last month the country would fast-track construction of two liquefied natural gas terminals to make it more secure in its gas supplies.
Notably, one of the sites had earlier been considered for an LNG terminal but developers abandoned the plan, seeking instead to site it for greener hydrogen imports instead.
Now, it’s back to fossil gas as Germany looks to import LNG at the site.
“We will do more to ensure our country’s energy security and we will change course in order to overcome our import dependency on single energy suppliers,” Scholz told the Bundestag.
In a starker turnaround, Frans Timmermans, the EU commissioner for the European Green Deal, said he envisions a scenario where member countries “stick with coal a bit longer” rather than using gas as a bridge to achieving a greener economy.
He qualified that it could be done “only if you speed up the transition to renewables,” but his remarks treat coal much more positively than the COP26 climate conference less than four months ago resolved to do.
Outside the bloc: The Brits are not nearly as dependent on Russian gas as continental Europe, but they are still facing astronomically high energy prices, and now Boris Johnson’s government is reportedly considering lifting its moratorium on fracking to increase domestic production.
The thought of lifting the ban was still facing steep resistance just weeks ago from the conservative government, which hosted COP26 in November and has been charging ahead pretty aggressively with a net-zero agenda.
“The argument that fracking will reduce our reliance on Russian gas is wrong. Between just 1 & 3% of UK gas comes from Russia. We import mostly from Norway — a friend and ally,” Zac Goldsmith, the British minister of State for the Pacific and the International Environment, wrote on Twitter just a month ago.
The share is now considered sizable enough for a rethink on fracking. The Telegraph reported last week that a senior government source said the U.K. needs “alternative sources of energy that are cheaper and more reliable and less vulnerable to the whims of a dictator.”
As for the Chinese, who have been criticized by the West for lacking ambition on cutting emissions, the country will now increase domestic oil and gas exploration, as well as coal production, in response to high prices associated with the Russia-Ukraine war, the Australian Financial Review reported last week.
The move would not necessarily mark a definite departure from its climate change targets — China committed to achieving peak greenhouse gas some time this decade — but it shows that the top global emitter sees more fossil fuels as a solution to the price pressure. That poses additional challenges to Western leaders, including the Biden administration, who are seeking for China to cut its emissions more swiftly.
At home: The Biden administration, too, has deviated from its forward climate change messaging and begun promoting domestic oil and gas development.
Administration officials still maintain that green energy is the ultimate solution to these high fuel costs, but they are now promoting domestic production to an extent not seen before the war began.
“We are increasing oil production with a record productivity. By the end of the year, we will have produced more oil than any time in the last number of years,” President Joe Biden told fellow Democrats last week at their retreat in Philadelphia.
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BREAKING — MANCHIN OPPOSES BIDEN FED NOMINEE: Sen. Joe Manchin said today he will not support Sarah Bloom Raskin for vice chairwoman of supervision at the Federal Reserve, meaning her nomination is in big trouble.
Manchin emphasized the pressure of high energy costs on the economy and said Raskin has “failed to satisfactorily address my concerns about the critical importance of financing an all-of-the-above energy policy to meet our nation’s critical energy needs.”
UK SETTING UP ENERGY TASK FORCE: Johnson announced he will set up an “energy task force” to bolster the UK’s oil, gas, and nuclear supplies as it seeks to reduce its dependence on Russian energy. The news comes after Johnson pledged last week to end Britain’s dependence on all Russian energy supplies by the end of 2022.
According to reports from the Daily Mail, the energy task force will be led by two senior industry experts, who will report directly to Johnson and advise on a “transition period” focusing on fossil fuels.
“In another economic blow to the Putin regime following their illegal invasion of Ukraine, the UK will move away from dependence on Russian oil throughout this year, building on our severe package of international economic sanctions,” Johnson said in a statement last week.
EUROPE OPENS ITS FIRST NUCLEAR POWER PLANT IN 15 YEARS: Finland’s long-delayed Olkiluoto 3 nuclear reactor finally began test production on Saturday — years after its original debut was slated to begin in 2009.
Once fully operational, The Guardian reports, Finland’s reactor is slated to meet 14% of the country’s electricity demand, helping reduce its dependence on imports from Russia and other countries.
ROOFTOP SOLAR ON THE RISE: A new forecast estimates that rooftop solar installations across the globe will continue to surge and will nearly double through 2025.
Rystad Energy’s analysis finds that rooftop installations rose 64% over the last five years and now account for 30% of global solar capacity. New growth has been fueled by uptake in China in recent years, while the U.S., U.K., and Australia still lead the world in total deployment.
Supply chain strikes again: Like most everything, solar PVs have become more expensive in recent months, which other forecasters expect will put a damper on what could have been even faster growth.
The Solar Energy Industries Association put out a report last week finding that prices for large-scale solar projects grew by 18% last year and implicated supply chain issues, higher costs for inputs, and trade uncertainties.
For all that, Wood Mackenzie has adjusted its forecasts for near-term solar additions downward by 19%.
COURT REMANDS ANOTHER FERC CERTIFICATE: The D.C. Circuit Court of Appeals sent another of FERC’s certificate approvals back to the agency last week after determining the commission fell short of its obligations for reviewing the targeted project’s environmental impacts.
In April 2020, environmental groups asked the court to review FERC’s certificate approval for Tennessee Gas Pipeline Co.’s “Upgrade Project,” which consisted of the addition of 2.1 miles of pipeline and a new compressor station to the company’s facilities in Agawam, Massachusetts.
The court determined that the then-majority Republican FERC erred under the National Environmental Policy Act in failing to account for “reasonably foreseeable indirect effects of the project,” namely the greenhouse gas emissions associated with burning the gas carried through the pipeline. FERC will have to undertake a new NEPA assessment to comply with the ruling.
Competing visions: The commission’s three Democrats are locked in a tussle with its two Republican commissioners and some lawmakers over how FERC should swing when it comes to considering the environmental effects of projects.
The court’s ruling on Friday falls in line with how Chairman Richard Glick, who dissented in the decision to approve the Upgrade Project certificate, and his fellow Democratic commissioners want FERC to review projects by more rigorously considering their total greenhouse gas emissions.
Republican critics maintain that FERC’s new policies for certifying gas infrastructure make the process more volatile and will slow down approvals, but Glick has countered that the approach will preempt more court activity, which itself slows down projects.
“I think developers of energy infrastructure would agree that when regulatory agencies ignore traditional directives or cut corners, the courts typically vacate the permits and send the agencies back to the drawing board,” Glick said in a recent Senate ENR hearing. “This often adds significant time and hundreds of millions, if not billions, of dollars of additional cost onto a project.”
OIL PRICES FALL: Oil prices continued to fall this morning, in a reversal from some of the sharp hikes seen last week, with futures for international benchmark Brent crude declining by 6% to roughly $105.89 a barrel, while futures for U.S.-based West Texas Intermediate (WTI) fell by more than $7.00 to $102.32 a barrel.
POWER RESTORED TO CHERNOBYL NUCLEAR PLANT: Ukrainian officials said yesterday that power has been restored to the Chernobyl nuclear power plant, after Russian troops reportedly knocked the plant offline last Wednesday.
In a statement, Ukraine’s atomic energy ministry said the development meant its cooling systems would operate normally and not have to use backup power.
“This is a positive development as the [Chernobyl] NPP has had to rely on emergency diesel generators for several days now,” IAEA Director General Rafael Mariano Grossi said in a statement yesterday. “However, I remain gravely concerned about safety and security at Chornobyl and Ukraine’s other nuclear facilities.”
GREEN ADS LOBBY FOR BIDEN’S COURT NOMINEE: Leading environmental groups are behind a new campaign calling on key senators to support the nomination of Ketanji Brown Jackson to the Supreme Court.
The ads, pushed by Earthjustice Action, League of Conservation Voters, and Sierra Club target key centrists like Republican Susan Collins and Democrat Kyrsten Sinema, as well as conservative Ron Johnson, who is up for reelection in Wisconsin.
NEW WHITE PAPER ON STRENGTHENING US MINERAL SECURITY: A new white paper released this morning by right-of-center environmental group ConservAmerica examines the shortage of critical minerals supply in the U.S. and proposes a three-part framework to help the government reverse what it describes as “one of the nation’s most persistent and pervasive national security and economic challenges.”
“We appreciate the administration’s recognition that federal policy is key to solving America’s deepening dependence on foreign countries, particularly China, for minerals essential to our economy. China will not, and has not been playing the slow game. We cannot afford to either. Our vulnerability in this area is largely a problem of our own making,” ConservAmerica President Jeff Kupfer said. Read the report in full here.
The Rundown
E&ENews Drilling permits spiked then plunged under Biden
ClimateWire US spending for global climate response ‘pitifully too low’
Axios The climate spillover of Russia’s war
Politico Offshore wind is set to soar. Fishing groups want to pump the brakes.
Calendar
WEDNESDAY | MARCH 16
10 a.m. The Senate Environment and Public Works Committee will hold a hearing to evaluate the formula for the EPA’s Clean Water State Revolving Loan Fund (CWSRF)––a federal-state partnership that seeks to provide communities with low-cost financing for water infrastructure projects.
10 a.m. The House Agriculture Committee will hold a hearing to review USDA’s climate change programs.
10 a.m. The House Energy Subcommittee on Science, Space and Technology will host a hearing on “Bioenergy Research and Development for the Fuels and Chemicals of Tomorrow.”
THURSDAY | MARCH 17
10 a.m. The Senate Energy Committee will hold a confirmation hearing for Kathryn Huff, Biden’s nominee to serve as DOE’s assistant secretary for nuclear energy.
1:00 p.m. The House Subcommittee on Water, Oceans, and Wildlife will convene to discuss five pending bills on fishing, wildlife and the ocean climate.
