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A CLOSER LOOK AT THE MANCHIN-BARRASSO AMENDMENT: A bipartisan NDAA amendment that won near-unanimous Senate approval yesterday would establish a domestic nuclear fuel program aimed at ensuring continued access to enriched uranium, key to existing nuclear plants and advanced nuclear projects, and ending U.S. reliance on Russia.
The legislation, introduced by Sen. Joe Manchin and Sen. John Barrasso and approved in a 96-3 vote, directs Energy Secretary Jennifer Granholm to establish a program to expand U.S uranium conversion and enrichment capacity. (It’s also a boon for Barrasso’s home state… more on that below).
Why it’s a priority: Russia is a major source for enriched uranium and the only source of commercially available high-assay low enriched uranium (HALEU), the expected source of fuel for U.S. companies on the frontier of advanced nuclear.
That supply is not reliable as evidenced by Russia’s abrupt throttling of gas deliveries to the EU via its Nord Stream pipeline.
Why it matters: The U.S. is backing nuclear energy as a reliable source of clean energy. Last year, the Biden administration announced a $6 billion effort to save distressed or aging nuclear plants—which it bolstered by another $1.2 billion in funding earlier this year. It is also in the process of building out a fleet of advanced nuclear reactors, which include advanced water-cooler reactors, like SMRs, non-water cooled reactors, and fusion reactors.
Among the projects in the works is TerraPower’s Natrium advanced reactor in Wyoming. The TerraPower project would be the first nuclear power project in Wyoming, bringing clean energy and jobs to a state that relies on fossil fuels–and primarily on coal–for the bulk of its power. TerraPower, which is backed by Bill Gates, had planned to use Russian HALEU, but gave up on that idea after the invasion.
Also of note: Wyoming is home to the largest U.S. uranium ore reserves, or the raw material that provides the fuel used by nuclear power plants. There are no conventional uranium mining projects in the state, according to the EIA—thus presenting the state with another area of potentially massive economic growth if it moves to build out a domestic uranium supply chain.
Manchin praised the bill’s passage yesterday as “long past due,” and described it during floor remarks as a crucial step that will help reduce the nation’s reliance on Russia for the fuel.
“Finally, the United States is taking care of its own and producing the enriched uranium that we need, rather than depending on Russia,” he said.
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OIL PROFITS DROP SLIGHTLY AS MAJORS LOOK TO INCREASE PERMIAN PRODUCTION: Exxon and Chevron earned nearly $14 billion combined during the second quarter of 2023, slightly lower than projections for the quarter amid lower natural gas prices and weaker refining margins. The earnings are a sharp drop from the same period in 2022, when energy prices soared following Russia’s invasion of Ukraine, and are a slight decline from the first quarter of 2023.
“The work we’ve been doing to improve our underlying profitability is reflected in our second-quarter results, which doubled from what we earned in a comparable industry commodity price environment just five years ago,” Exxon CEO Darren Woods said, according to the Wall Street Journal.
The profits were still large enough to pad the company coffers, however, and come as both oil majors look to acquire smaller companies and expand their production in the largest U.S shale patch.
…Both companies did increase shale production in the Permian Basin in the second quarter, putting them on track for 10% growth for 2023. Exxon ramped up its Permian Basin production to 620,000 barrels per day in Q2, a new record for the company, while Chevron increased its Permian production to 772,000 bpd. That’s more than double the rate of their smaller rivals, which have largely capped growth to around 5% in the basin, according to Bloomberg. Combined, the two companies now account for 25% of the basin’s total production.
Both companies are hoping to ramp up their production by 2030 to reach 1 million bpd, after which they said they will keep levels steady through the rest of the decade.
….Meanwhile, oil prices continued to climb to reach a fifth straight week of gains: Benchmarks for both Brent crude and WTI increased by 3.6% this week, amid more bullish demand forecasts for the second half of the year, as well as low U.S. SPR levels and OPEC+ supply cuts.
This month could see OPEC oil production at its lowest level since fall of 2021, Commerzbank analysts said in a note.
Investors were buoyed by the U.S.’s second-quarter economic report, which saw an annualized GDP growth rate of 2.4%—higher than expected—and by other economic data released this morning that showed signs of resilience in the eurozone. That data, as well as higher projected demand from China, has warmed investors to the idea of peak rates getting closer PVM analyst Tamas Varga told Reuters.
CHANGES TO NEPA ON PERMITTING: The Biden administration has released a proposed rule to carry out the provisions that Congress ordered for federal permitting requirements in last month’s bipartisan debt ceiling deal, but are also including a number of climate, racial, and economic fairness factors that are likely to receive pushback from GOP lawmakers, as reported by Daily on Energy alum Josh Siegel.
The updates to the National Environmental Policy Act – otherwise known as NEPA – were designed to speed up the building of both fossil fuel and clean energy infrastructure projects. But the additional proposed changes from the administration on how federal agencies conduct reviews under NEPA were not originally included in the debt limit deal reached between House Republicans and the White House. One such change includes directing agencies to consider the impact of projects on climate change.
The White House Council on Environmental Quality’s rulemaking pushes agencies to consider short- and long-term effects of building a project – including the potential of worsening climate change – and requires reviews to consider measures to adapt to the effects of climate change. CEQ will also implement additional changes to NEPA, directing agencies to consider environmental justice in reviews and encouraging agencies to evaluate the cumulative effects of pollution on communities that have historically faced discrimination, such as people of color and low-income residents who are disproportionately exposed to industrial activity. Read more on that here.
MORE NEWS ON THE WHITE HOUSE: The Biden administration is expected to issue a proposal as early as early as today directing automakers to increase the average fuel economy of their vehicles, Bloomberg reports.
The proposed rule, which is expected to be made public by the National Highway Traffic Safety Administration, would be applicable for car models 2027 and beyond. The agency’s previous proposal, published last April, ordered automakers to increase their average fuel economy to about 49 miles (78.8 kilometers) per gallon by 2026.
The move comes as gas prices continue to climb, and the Biden administration is pushing for half of all vehicles sold in the U.S. to be electric or emissions-free by the end of the decade.
FERC’S NEWEST RULE – The Federal Energy Regulatory Commission approved a major new rule yesterday, aiming to speed up connecting energy projects to the grid and fix a backlog of projects waiting to be brought online.
The ruling marks a step toward the modernization of the country’s energy grid by streamlining the interconnection process for transmission providers – potentially easing widespread delays stifling renewable energy.
FERC’s acting chairman Willie Phillips called the rule ‘historic,’ stressing that there were over 4,500 pages of comment filed for the comment to review and consider – resulting in the final rule being “one of the longest in FERC’s history.”
“It represents the largest and most significant set of interconnection reforms since the pro forma interconnection procedures were created two decades ago,” said Phillips.
All four FERC commissioners voted for the plan.
Other items on the agenda: The commission also approved two new natural gas pipelines, and approved last minute changes to a major power plant auction that occurred in December.
The Rundown
Reuters In Baltic Sea, citizen divers restore seagrass to fight climate change
E&E News The coming Manchin-Biden feud over ‘clean hydrogen’
Bloomberg Middle Eastern oil market dynamics upended by OPEC+ supply cuts
