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NEW ORLEANS WITHOUT POWER: Hurricane Ida has knocked out all eight transmission lines into New Orleans leaving more than a million people without power, a level of damage utility Entergy deemed “catastrophic.”
That means it will be several weeks, not days, before customers in the city see power restored. The only power in the city is coming from generators.
The failure of New Orleans’ electricity transmission system is likely to bring the issue of grid resilience back to the fore, which is a key component of the Biden administration’s Build Back Better infrastructure agenda.
Some analysts are floating changes to the way utilities build transmission, raising arguments in favor of under-grounding lines to prepare for more severe storms caused by climate change.
“The fastest way to get power back in New Orleans would be basically to build the grid back as it is, but that leaves it vulnerable to future hurricanes because we know it will get hit again,” said Joshua Rhodes, a research associate at the University of Texas at Austin and a founding partner of IdeaSmiths LLC.
The main argument against building lines underground, a relatively untested method, has been the huge upfront capital cost.
But Rhodes told me areas vulnerable to extreme weather should use a different equation to evaluate transmission assets.
Traditional above-ground lines can last several decades, Rhodes said, meaning cost can be amortized over a longer period of time.
“But if you have to frequently replace or do a major repair, that starts to add up,” Rhodes said.
Building underground could also avoid the backlash that visible power lines elicit, a key barrier to expanding the nation’s transmission system.
Policy or company initiative? This is not the first time Entergy’s transmission lines did not stand up to a hurricane.
Nearly all of Entergy’s transmission lines into New Orleans failed as a result of 2008’s Hurricane Gustav, leading to regulators and elected officials criticizing the company for the poor condition of its grid, according to Nola.com.
The provisions addressing transmission in the bipartisan infrastructure bill are focused more on speeding the approval process to enable quicker construction to keep pace with growing demand for renewable energy, but the issue of grid resilience has been top-of-mind too.
Rhodes said the North American Reliability Corporation could theoretically impose a more strict standard on how transmission lines are built in areas where hurricanes happen frequently.
But he added it’s “incumbent on companies” to propose undergrounding transmission lines to utility regulators, to “show them it would be valuable to do this kind of thing and maybe be cheaper over the long run.”
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WHAT IDA MEANS FOR OIL AND GAS PRICES: Hurricane Ida is likely to lead to some increase in gasoline prices, but nothing dramatic, analysts say.
Average national gasoline prices could rise in the 5-10 cents per gallon range over the next two weeks, according to GasBuddy analyst Patrick De Haan.
“Hurricane Ida isn’t likely to lead to drastic price increases, but some increases are likely over the next ~2 weeks,” he said.
What’s down: Oil prices have not surged despite Ida forcing the shutdown of 96% of oil production and 94% of natural gas output in the U.S. Gulf of Mexico.
At least nine refineries in Louisiana have reduced production or shut-in operations in response to the storm, together accounting for about 13% of the total U.S. refining capacity, according to the Department of Energy.
Several pipelines have also shut down operations as a precautionary measure, including some of the Colonial Pipeline, the key hub for transportation fuels that was hit by a cyberattack in April, which halted deliveries across the Southeast and lead to panic purchases of gas.
But refinery and oil and gas shutdowns are not anticipated to cause any immediate supply issues, the Energy Department said, because Gulf Coast stocks of gasoline and diesel are above or essentially in line with the five-year average.
Colonial Pipeline said today it expects to resume full service once it assesses the storm impact. Colonial said fuel supply is available throughout the Southeast from numerous terminals located along its network.
Political fallout: Escaping major disruptions and price spikes would represent a sigh of relief to the Biden administration, which has been on the defensive this summer over rising gasoline prices caused mostly by oil prices increasing as demand returned with recovery from the pandemic.
But prices have fallen in recent weeks due to concerns over the spreading Delta variant, providing cushion against any price increases that might occur from Hurricane Ida.
LATEST ON IDA: More than a million people in Louisiana and Mississippi were left without power after Hurricane Ida made landfall as a strong Category 4 hurricane and now pushes northeast with heavy flash flooding conditions and dangerous storm surges, the Washington Examiner’s Kaelan Deese reports.
The Bayou State reported 1,023,255 customers were still without power as of this morning, and Mississippi reported at least 121,669 people still without electricity.
IDA TESTS LEVEE SYSTEM: Hurricane Ida, one of the most powerful storms ever to threaten the U.S. coastline, brought dangerous storm surge and powerful winds to southern Louisiana, testing a $14 billion system of levees around New Orleans on the 16th anniversary of Hurricane Katrina’s catastrophic landfall, the Washington Examiner’s Daniel Chaitin reports.
After Katrina devastated New Orleans and the surrounding area in 2005, causing more than 1,800 deaths and $100 billion in damage, a system of pumps, floodwalls, and levees was rebuilt. Levees may be over-topped from Ida, and localized flooding is possible, but officials have expressed confidence the system will hold and is vastly more capable of reducing the threat of storm surge.
“This is a very differently protected city than it was 16 years ago,” said Ramsey Green, New Orleans Mayor LaToya Cantrell’s deputy chief administrative officer for infrastructure, according to NOLA.com.
CHATTERJEE JOINS PRO-CARBON TAX GROUP: Neil Chatterjee, during his tenure as chairman of the Federal Energy Regulatory Commission, was eager to be among the first Republicans in government to signal support for carbon pricing.
Now, Chatterjee is planning to advocate for a carbon tax after leaving government, announcing this morning on his last day at FERC that he has joined the Climate Leadership Council as a senior policy adviser.
The Climate Leadership Council, a group founded by former GOP Secretaries of State James Baker and the late George Shultz, advocates for a federal carbon tax that would return the revenue from the fee to households to offset higher energy costs.
Chatterjee, a Kentucky native who used to work for Senate Minority Leader Mitch McConnell, will look to “bring Republicans to the table in support of a lasting and effective climate solution,” he said in a statement.
Greg Bertelsen, the CEO of the Climate Leadership Council, said he hoped Chatterjee will help “broaden support” for the group’s carbon tax proposal.
Chatterjee will work for the Council’s advocacy arm, Americans for Carbon Dividends, to promote the policy on Capitol Hill.
Chatterjee also announced he will join the Washington office of the global law firm Hogan Lovells as a senior adviser.
HHS ESTABLISHES OFFICE OF CLIMATE CHANGE: The Department of Health and Human Services announced today the establishment of the Office of Climate Change and Health Equity, the Washington Examiner’s David Hogberg reports.
“Unfortunately, some of the same groups disproportionately impacted by COVID-19 will be the same groups struggling the most with the effects of climate change on our health,” HHS Assistant Secretary for Health Rachel Levine said in a press release.
The new office will aim to identify populations with disproportionate exposures to climate change, address health disparities exacerbated by climate change, and assist with regulations to reduce greenhouse gas emissions.
GONE WITH THE WIND: More wind was installed in 2020 than any other energy source, accounting for 42% of new U.S. capacity, the Department of Energy said in a new report out this morning.
The report, prepared by DOE’s Lawrence Berkeley National Laboratory, detailed a record 16,836 megawatts of new utility-scale onshore wind power capacity last year – representing $24.6 billion of new investment.
Texas installed the most capacity with 4,137 MW. Other leading states include Iowa, Oklahoma, Wyoming, Illinois, and Missouri — all of which added more than 1,000 MW of capacity in 2020.
Wind turbines are growing in size and power, leading to more energy produced at lower costs. Turbine prices have steeply declined from levels seen a decade ago, from $1,800 per kilowatt in 2008 to $770–$850/kw now.
Offshore wind is next: Meanwhile, the pipeline for U.S. offshore wind energy projects grew to 35,324 MW in 2020, a 24% increase over last year, according to a separate report by DOE’s National Renewable Energy Laboratory.
Most of the growth is targeted for the New York Bight, where the Bureau of Ocean Management created five new wind energy areas with a total of 9,800 MW of capacity.
Also this year, Massachusetts’ Vineyard Wind became the first approved commercial-scale offshore wind energy project in the U.S.
RELATED…INTERIOR MOVES ON NEW YORK OFFSHORE WIND PROJECT: Interior announced this morning that BOEM plans to conduct an environmental review of a proposed commercial-scale wind project offshore New York. The proposed Sunrise wind project would build up to 122 turbines capable of generating 880 to 1,300 megawatts power, enough to serve nearly 600,000 homes.
During a 30-day public comment period, BOEM will seek information to be analyzed in the environmental review, including mitigation measures and possible alternative routes.
Interior is touting the project as a component of the Biden administration’s goal to deploy 30 gigawatts of offshore wind energy by 2030.
The Rundown
Wall Street Journal China curbs steel output, but familiar economic pressures test its mettle
Axios Federal Trade Commission to probe gas station mergers as prices climb
New York Times A new coal mine for England is stirring hopes and fears
Calendar
MONDAY | AUG. 30
12 p.m. The US-Qatar Business Council will host a webinar event featuring energy experts titled, “How Will LNG Drive a Sustainable Energy World?”
3:30 p.m. Resources for the Future will host a webinar conversation with EPA Administrator Michael Regan to discuss the role of economic analysis in informing environmental rulemaking and policy, regulations for greenhouse gas emissions under the Clean Air Act, environmental justice considerations, and more.
WEDNESDAY | SEP. 1
12:30 p.m. The Nuclear Innovation Alliance will hold a webinar event for the release of the new NIA resource, “Advanced Nuclear Reactor Technology: A Primer.”
1 p.m. The House Select Committee on the Climate Crisis will hold a virtual briefing on the IPCC’s 6th Assessment Report.
