Subscribe today to the Washington Examiner magazine and get Washington Briefing: politics and policy stories that will keep you up to date with what’s going on in Washington. SUBSCRIBE NOW: Just $1.00 an issue!
SULLIVAN INTERVIEW: Sen. Dan Sullivan is on a mission to lure close allies of the U.S. in Asia into signing the dotted line and contracting for natural gas shipments from Alaska in order to get the state’s delayed $40 billion LNG export project over the finish line.
We caught up with Sullivan after his recent weekend getaway to Japan and South Korea, where he met with senior government officials to shop what he confidently boasts as the West Coast’s only fully permitted export project in Alaska LNG.
The big picture: Fallout from the war in Ukraine raised the premium on LNG worldwide, especially among those in the United States’s sphere of influence who want to phase out or end their energy trade relationship with Russia.
The war commenced with the backdrop of the U.S. rising in rank to lead the world’s in LNG exports (a title it forfeited for a time when Freeport LNG came offline last summer), and administration officials from President Joe Biden himself to Secretary Jennifer Granholm, Amos Hochstein, Assistant Secretary of State Geoff Pyatt, and Japan Ambassador Rahm Emanuel have talked up the value of using American energy for the country’s strategic advantage.
Sullivan sought to carry that message to Seoul, as well as to Tokyo, where he was joined by Emanuel.
“One of the things that is so important in our competition with these authoritarian regimes like Russia and China is that American energy shared with our allies provides us a huge strategic advantage vis a vis these dictatorships,” Sullivan told Jeremy.
Europe was Russia’s top gas export market leading into the war, although it is no more and now outcompetes the rest of the world for U.S. LNG.
Japan and South Korea remain the two leading cumulative export markets for U.S. LNG reaching back to 2016, making growth in shipments via Alaska LNG a natural development.
But the Europeans and Japanese continue to import Russian gas, something Sullivan said he sought to dissuade the Japanese against.
“You are helping fund the Russian war machine,” he recalled telling Japanese leaders. “Don’t do that. We have an alternative.”
An LNG industrial policy: Congress in 2004 approved a loan guarantee worth $18 billion, indexed to inflation, to support financing and construction of a pipeline and LNG project to transport natural gas from Alaska’s North Slope natural gas to the continental U.S.
The bipartisan infrastructure law removed the condition that shipments go to the continental U.S., opening the world up to gas from the project once it got its export authorization, and the loan guarantee now is valued at upwards of $26 billion for Alaska LNG.
The project has struggled to secure the rest of its financing, though. Negotiations with potential buyers are “fairly advanced,” developer Alaska Pipeline Development Corporation said last month in a presentation before the Alaska House of Representatives’ Finance Committee.
“We’re all working on this. It’s a big project,” Sullivan said. “The private sector’s got to drive this, but it’s important to have government support as well to recognize giant geostrategic benefits.”
The risk advantage: Alaska to Asia is a significantly shorter journey than the journey from the Gulf or Atlantic Coast — 7 days versus 18+ days, according to some estimates.
That’s a big selling point that Sullivan as well as Emanuel have communicated around Alaska LNG, the others being there’s always fewer risks in dealing with the U.S. than when dealing with its major competitors.
“These countries want to diversify away from Russian oil and gas but also from Qatari natural gas. The Middle East is a dangerous neighborhood,” he said. There’s no government risk in the United States. We have all the permits. We have all the export licenses. The Biden administration has already successfully defended those in court from radical environmental groups, and there’s no resource risk.”
Welcome to Daily on Energy, written by Washington Examiner Energy and Environment Writers Jeremy Beaman (@jeremywbeaman) and Breanne Deppisch (@breanne_dep). Email [email protected] or [email protected] for tips, suggestions, calendar items, and anything else. If a friend sent this to you and you’d like to sign up, click here. If signing up doesn’t work, shoot us an email, and we’ll add you to our list.
SENATE REPUBLICANS SEEK TO CANCEL EPA’S GOOD NEIGHBOR RULE: Senate Republicans want to cancel EPA’s “good neighbor” rule, which it finalized in March to limit downwind smog pollution from coal-fired power plants and industrial facilities.
The Congressional Review Act resolution of disapproval was led by Sen. Roger Wicker of Mississippi, who said it’s necessary because EPA relied on a “questionable” methodology and disregarded states’ attempts to address cross-state smog with their own state implementation plans.
The Clean Air Act provides that EPA must issue a federal implementation plan to limit pollution to downwind states if it determines states’ plans to be inadequate. EPA fully or partially disapproved of 21 state implementation plans, including those submitted by Mississippi, West Virginia, and Maryland.
Good neighbor is the latest EPA rule to be targeted by congressional Republicans. The Senate passed a resolution of disapproval for the WOTUS rule, although Biden vetoed it. Republicans have also floated resolutions of disapproval for the agency’s proposed vehicle emissions standards and its emissions regulations for power plants.
DEMOCRATS PUSH FOR CLEAN SHIPPING ON WORLD OCEANS DAY: Senate Democrats introduced two bills yesterday designed to cut greenhouse gas emissions from the maritime shipping sector, including one that would levy a pollution fee on large marine vessels bringing cargo into U.S. ports.
Sen. Sheldon Whitehouse’s International Maritime Pollution Accountability Act would charge for emissions of carbon dioxide, nitrogen oxides, sulfur dioxide, and particle pollution. The fee schedule would apply to ships with at least 10,000 gross tonnage, a metric that would exclude most domestic shipping, according to Whitehouse’s office.
Collections are estimated to add up to some $250 billion over 10 years, and part of the sum would be used to add low-carbon vessels to the nation’s shipping fleet.
The other bill, introduced by Sen. Alex Padilla, would direct EPA to set “progressively tighter carbon intensity standards for shipping fuel to reduce greenhouse gas emissions by 2040,” according to a summary.
More from Congress: Republican Rep. Carol Miller of West Virginia announced introduction of the Methane Reduction and Economic Growth Act of 2023 this morning, which would amend the 45Q tax credit to add methane and incentivize its capture from mine sites.
Democratic Reps. Terri Sewell of Alabama and Chris Deluzio of Pennsylvania are cosponsors, as is Republican Guy Reschenthaler of Pennsylvania.
GM JOINS FORD TO ACCESS TESLA’S CHARGING NETWORK: Tesla called on its vehicle manufacturers to adopt its North American Charging Standard, and the EV giant’s big-name competitors are heeding it.
General Motors announced yesterday that it, like Ford, will utilize the Tesla-designed charging connector and charge port on its new models from 2025 onward, allowing customers to access “12,000 Tesla Superchargers and growing” beginning in early 2024, the company said.
The motive: Adopting the standard means “more charging stations, less range anxiety” and “more sustainable journeys,” GM said, adding that “it’s about your convenience, not our competition.”
But the agreements further cements Tesla’s reign as standard-bearer in the EV world beyond just being the maker of the preeminent vehicle models.
DEMOCRATS USING WILDFIRE SMOKE TO BATTER GOP ON CLIMATE: Democrats are skewering 2024 Republican candidates over their environmental policies and positions on climate change as the East Coast chokes on smoke drifting south from Canada’s out-of-control wildfires, the Washington Examiner’s Naomi Lim reports.
An ad put together by the Democratic National Committee features Donald Trump remarking that global warming is a hoax and a “moneymaking industry,” as well as Ron DeSantis saying he rejects “politicization of the weather,” in a split image with footage of the orange-tinted, smoke-filled Manhattan.
Mike Pence is also featured in the ad challenging assertions of drastic temperature rise.
DNC spokesman Ammar Moussa said Republicans are “focused on gas stoves, trivializing climate change, promising to ban abortion, and rolling back clean air protections while virtually ignoring the reality of what’s happening outside Americans’ windows.”
FUSION STARTUP CHIEF BULLISH ON TECHNOLOGY’S PROSPECTS: The head of Commonwealth Fusion Systems, a startup trying to demonstrate and commercialize a nuclear fusion reactor, said he’s keeping his head down as people express considerable skepticism that fusion power plants could ever be successful.
“The skepticism is understandable,” CEO Bob Mumgaard told CNBC. “That doesn’t bother us. We have to build things and show that they work.”
“Everyone has different thresholds for what they have to see to believe something,” Mumgaard also said. “When the Wright brothers were flying, you still had skeptics that said planes couldn’t exist.”
Commonwealth’s SPARC project uses superconducting magnets to replicate a fusion reaction, which differs from the method and technology used in the Department of Energy’s fusion breakthrough last year.
Read more here.
OIL GEOPOLITICS UPDATE– FIRST, RUMBLINGS OF A DEAL WITH IRAN: Oil prices plunged and then recovered yesterday following a report and subsequent official denials about a U.S. nuclear deal with Iran to lift sanctions.
Middle East Eye reported that the two sides were working toward a deal that would give sanctions relief in exchange for Iran reducing uranium enrichment.
Brent crude plunged more than 3% on the rumors. But it has since recovered, thanks in part to the National Security Council and Iranian officials issuing denials.
Second, MBS threatened the U.S. after Biden promised “consequences”: After Biden last fall said that the U.S. would impose “consequences” on Saudi Arabia over its decision to defy him and slash oil production, Crown Prince Mohammed bin Salman lashed out, in private.
MBS said in a classified document obtained by the Washington Post that “he will not deal with the U.S. administration anymore.” He also threatened “major economic consequences for Washington.”
It is not clear whether the outburst was conveyed directly to the U.S.
The document was revealed as part of the Discord leaks allegedly made by Air National Guard member Jack Teixeira – the same provenance of this week’s revelation that the U.S. had advance intelligence of Ukrainian plans to attack the Nord Stream pipelines.
The Rundown
Bloomberg America’s long, tortured journey to build EV batteries
E&E News Tensions, gas prices rise as Washington state auctions carbon
