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MOMENTUM FOR US LNG: Gazprom’s shut-off of gas supplies to Poland and Bulgaria puts even more momentum behind growing U.S. liquefied natural gas as the EU seeks out alternatives to Russian imports.
European leaders slammed the Russians’ “blackmail” in cutting off supplies to those countries, while EU Commission President Ursula von der Leyen looked forward to an era of a Russian energy-dependent Europe coming to an end.
EU Energy Commissioner Kadri Simson emphasized the necessity of buying energy elsewhere, saying to help Ukraine through the war, the Europeans “have to reduce the financing of Putin’s war machine.”
“We need alternatives for imported natural gas and oil products from Russia,” Simson said yesterday during a forum on offshore wind alongside Energy Secretary Jennifer Granholm.
The green focus: The EU, like the Biden administration, sees green energy as best available too able to help usher in the end of that era of dependency.
Simson said “renewables are the obvious choice” alternative to Russian energy.
But: The EU and the administration have made clear more U.S. LNG and LNG from other countries will be necessary to wean Europeans off Russian fuels, and EU countries are planning new LNG terminals where, in at least one notable case, they had been passed up previously in favor of greener alternatives.
Simson also said that if more of the EU’s allies were to increase renewables, it would reduce overall demand for Russian fossil fuels and suggested it would allow more gas to enter the global market for the Europeans to purchase.
“We have mapped all the available volumes worldwide, and that means that even if our trading partners can replace some of their consumption with renewables, [this] also helps us achieve our goals,” she said.
Helping out a friend: President Joe Biden has already promised to help Europe field an additional 15 billion cubic meters of gas from the U.S. and other sources this year to help the EU fill its stores before winter.
The administration also committed to providing 50 bcm of additional U.S. gas per annum in the coming years, and the Energy Department is making headway to that end.
DOE issued orders yesterday authorizing nearly four million metric tons worth of additional exports from two in-the-works LNG facilities on the Gulf Coast.
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MORE FROM GRANHOLM, ON THE HILL: Granholm, appearing before House Energy and Commerce lawmakers this morning to detail her department’s 2023 budget request and priorities for the year ahead, fielded questions about the department’s decision to authorize greater LNG export volumes. While both of those projects are currently under construction, she noted, the U.S. remains focused on its goal to increase LNG exports to Europe to 15 billion cubic meters by the end of the year.
“Be aware that we have permitted, completely, 30 billion cubic feet of liquefied natural gas that have not been constructed yet,” Granholm said. “We currently export about 12 billion cubic feet of natural gas. We have permitted almost three times as much that could be ready to go but that are simply not under construction.”
RELATED TO THE ABOVE – GERMANY DROPS OPPOSITION TO RUSSIAN OIL BAN: German representatives to the EU have lifted their objection to a full a Russian oil embargo, the Wall Street Journal reports, increasing the likelihood that the bloc will move forward with its plans to adopt a phased-in Russian oil ban. Details on the timeline for the phased-in ban are unclear, since Germany will need time to secure alternative supplies. Still, some officials suggested the EU could move to vote on the embargo as early as next week.
EU WARNS AGAINST PAYING RUSSIA IN RUBLES: Von der Leyen warned EU member countries not to capitulate to Vladimir Putin’s decree that “unfriendly nations” pay for their gas imports using rubles, saying that doing so would be a violation of sanctions passed by the bloc. “Our guidance here is very clear,” she said. “If this is not foreseen in the contract, to pay in rubles is a breach of our sanctions.”
Some traders might not be listening: Reuters reported today that some European traders are weighing whether to pay for Russian gas supply in rubles. Among them:
- Italy’s gas provider, Eni. Reuters reports it has not yet decided on whether to cease imports of Russian supplies, and is “is waiting for clarity” from the EU on whether paying in rubles amounts to a breach of sanctions passed by the bloc.
- Uniper, Germany’s main importer of Russian gas, has also reportedly declined to rule out the ruble payments just yet, saying “no decision” has been made. Earlier this week, it said it would be possible to pay for the future supplies “without breaching” sanctions, but declined to offer additional details.
- Hungary, meanwhile, is planning to pay for Russian supplies using Gazprombank, which allows it to convert its currency into rubles in accordance with Putin’s decree.
PELOSI BRUSHES OFF GAS TAX HOLIDAY: Congressional Democrats will steer clear of a gas tax holiday in upcoming legislation meant to lower prices.
House Speaker Nancy Pelosi referred to such a measure as merely a PR move.
“The pros of it are it’s good PR,” she said at a press conference this morning.
“The cons are that there’s no guarantee that the saving, the reduction in the federal tax, that would be passed on to the consumer,” she said, noting that the lost revenue would have to be replaced elsewhere.
Instead, Democrats will go after oil companies: Instead, Democrats will pursue legislation to attack oil companies as manipulating the marketplace.
“Big Oil has profiteered and exploited the marketplace,” Pelosi said.
She was joined at the press conference by Senate Majority Leader Chuck Schumer, House Energy and Commerce Chairman Frank Pallone, and Senate Commerce Chair Maria Cantwell. They declined to offer specifics about the legislation. But Schumer made it clear that Democrats think the public is receptive to the idea of blaming the industry for high gas prices. Oil companies maintain that the market is competitive.
Pallone said they will give the FTC and state attorneys general “increased authority—including civil penalty authority— to go after oil companies and retailers that are gouging their customers.” The bill would apply to both wholesale and retail sales.
BOEM ASKING FOR COMMENT ON NEW OFFSHORE WIND: The Bureau of Ocean Energy Management announced yesterday it is seeking information on the possibility of leasing multiple plots of federal waters for offshore wind development.
The calls for information seek input about six areas off the central Atlantic coast as well as two off the Oregon coast.
The administration hopes to get to stand up 30 GW of offshore wind power by 2030, and there were 18 active commercial wind energy leases in the Atlantic as of February, according to the Interior Department. Those 18 leases could support approximately 27 GW of power to supply if fully developed.
Granholm on permitting: Granholm said during the same offshore wind event yesterday that government has to help remove more “barriers” keeping offshore wind power down.
“One of the barriers that I know you all agree on is the time for permitting,” she said. Ensuring more “certainty with respect to time frames” is a priority and that the administration is working to “see how we can collapse permitting time.”
DESANTIS TAKES DOWN NET METERING: Republican Gov. Ron DeSantis vetoed legislation yesterday to reform net energy metering in Florida.
Similar to the proposal California’s Public Utility Commission introduced in December, the bill sought to reduce the compensation paid to residential solar users for the excess power they export to the grid, something developers fiercely oppose as reducing incentives encouraging homeowners to install solar panels.
DeSantis’s veto order cited inflation and said Florida “should not contribute to the financial crunch that our citizens are experiencing.”
Opposition to the legislation was bipartisan, with Democratic state Sen. Lori Berman saying DeSantis’s veto was necessary and that solar is necessary to slow climate change.
INDUSTRY ‘SET’ ON PERMITTING: HAALAND: Interior Secretary Deb Haaland said the oil and gas industry is “set” with the amount of drilling permits at its disposal and defended the Biden administration’s actions to scale down the federal leasing program.
Haaland, who was before the House Appropriations Committee this morning, brought up the thousands of drilling permits currently authorized and disputed Republican characterizations that the administration is choking production on federal lands.
“There is no ban on leasing right now,” Haaland said.
“The 9,000 permits — those have already been approved, and the industry is free to use these permits in a way they see fit,” she also said. “They just haven’t acted on those.”
Administration officials have been batting away criticisms from both Republicans and environmental groups, the latter of which argue Biden is doing far too little in the way of keeping his promise to end new drilling on federal lands.
INSPECTORS FIND NO SIGNIFICANT DANGER AT CHERNOBYL: A team of international nuclear inspectors tasked with measuring radiation at the Chernobyl nuclear facility in Ukraine did not find a dangerous increase in exposure levels after Russian troops briefly seized control of the facility before ceding control back to Ukraine last month.
Speaking to reporters in Vienna, International Atomic Energy Agency Director General Rafael Grossi said that the levels measured by his team were “significantly below the authorized levels for workers in an environment with this type of radiation.”
“The situation is not one that could be judged as posing great danger to the environment or to people at the moment that we were taking these measurements,” Grossi said.
His remarks come after Russian troops seized control of the plant in late February, forcing more than 200 technicians and support staff there to work at gunpoint and with very little food. Russian soldiers abruptly handed control of the facility back to Ukraine last month, citing exposure to “significant amounts” of radiation while digging trenches in the exclusion zone.
INDUSTRY ASKS FOR MORE TIME ON SEC CLIMATE RULE: Oil and gas industry groups are asking the SEC for more time to review and comment on the commission’s climate change disclosure proposal.
The trade groups note the wide scope of the 506-page rule and said in a letter to Chairman Gary Gensler this week that its 39-day comment period “does not constitute a meaningful opportunity when there are so many wide-ranging economic and financial impacts from this rule.”
The commission proposed the new disclosure rule last month to the qualified praise of environmental groups and the dismay of Republicans and industry.
Gensler defended the disclosure proposal during a forum earlier this month, saying the commission has historically “stepped in when there is significant need for the disclosure of information relevant to investors’ decisions.”
“That’s where we are right now, by the way,” he said.
The Rundown
Wall Street Journal The Permian Basin oil field is running out of workers, materials—and cash
New York Times From king cobras to geckos, 20 percent of reptiles risk extinction
Calendar
THURSDAY | APRIL 28
12:00 p.m. Resources for the Future hosts a forum to talk over the key drivers of domestic and global energy prices and explore U.S. policy proposals to address increased energy costs.
4:00 p.m. National Press Club The Electric Power Research Institute will launch Climate READi (REsilience and ADaptation initiative), an effort to ensure operation of a resilient power system for the future.
