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ADMINISTRATION PUTS LIMITS ON LNG BOOM: Biden officials are putting some checks on the U.S. LNG export craze to keep the industry’s growth and emissions within the administration’s bounds and limit undesirable consequences of a rapid expansion of planned export projects and new infrastructure.
This comes after Biden presided over record exports: Record LNG exports to Europe totaling some 56 billion cubic meters in 2022 have been an immense source of pride for the Biden administration, which helped facilitate the increase with its U.S.-EU joint energy security task force.
How the administration has tried to limit the related emissions: Creation of that task force came with a promise to limit the environmental impact of the administration’s newfound pro-fossil export policy by getting a grip on methane, and EPA is currently finalizing regulations to crack down on methane emissions from oil and gas sources to that end.
It’s also working on a rulemaking for implementation of the Inflation Reduction Act’s new methane fee program.
Brad Crabtree, assistant secretary of energy in the Office of Office of Fossil Energy and Carbon Management, put methane mitigation on the same plane as the administration’s export agenda, which centers the energy security of allies and competition with Russian natural gas.
“As we work to meet [2050] climate obligations, we recognize the European Union and its member states, other importing countries, and companies purchasing natural gas are increasingly expressing clear policy and market preferences for gas with lower methane emissions and for broader decarbonisation of the natural gas supply chain,” Crabtree said during remarks this morning at the Fifth Transatlantic Energy Security Forum, hosted by LNG Allies.
The newest check on LNG: The Department of Energy also signed a policy statement last month “reaffirming” the force of its seven-year deadline for authorization holders to commence exports of domestically produced natural gas.
It means the department will not consider applications for an extension if a project developer fails to construct and begin exporting gas within that timeline unless it can prove that it both has commenced construction on the export facility and has been unable to meet the deadline as a result of extenuating circumstances outside of its control.
The policy is meant to limit flexibilities with export authorization’s terms and means project developers can’t just come back to the department for any old reason to request an extension if they fail to meet its deadline.
Dozens of LNG export projects currently hold export authorizations, a number of which DOE has approved in the last two years. The volume of LNG authorized for export now exceeds current exports by a factor of four, and some have raised concern about oversaturation in the market with all the new planned export terminals.
“This overhang of authorized projects that have not proceeded to export has created confusion overseas,” said Crabtree, who added that he’s been in meetings with various country’s delegates who expressed that it’s difficult for them to discern the real state of the U.S. LNG export market.
The new policy could end up weeding out projects that have been in the pipeline but delayed. Securing financing and long-term contracts has been a problem for the industry because of limited interest, especially in Europe, to enter long-term contracts for gas, and 10 export projects could be at risk of losing authorizations under the policy statement’s terms, according to Oil & Gas Watch.
Crabtree also said the massive volume of gas approved for export “creates concern and confusion” in the U.S. because the domestic industry, consumers, and environmental NGOs “see the level of authorized exporters and then the level of actual production and that delta and it creates uncertainty regarding the full domestic market and environmental implications of the export approvals that we’ve made.”
Environmental NGOs have been President Joe Biden’s foremost critics on LNG exports, challenging the administration’s campaign as a clear violation of his climate change agenda.
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NATURAL RESOURCES ADVANCES PRO-MINNESOTA MINING BILLS: The House Natural Resources Committee advanced two measures yesterday designed to rebuke and reverse Biden administration actions blocking new mineral development in Minnesota’s Superior National Forest, where developers seek to construct the Twin Metals mine.
Both bills were led by Energy and Mineral Resources Subcommittee Chairman Pete Stauber of Minnesota and were brought in response to the Interior Department’s rescission of two mineral leases for the Twin Metals mining project and subsequent 20-year withdrawal covering approximately 225,504 acres in the Superior National Forest.
One of the resolutions would express disapproval of the land withdrawal under the Federal Land Policy and Management Act. If the Senate were to pass the same resolution, the land withdrawal would be nullified without needing Biden’s signature.
The other measure would rescind the withdrawal via a different legislative means while also reinstating the two mineral leases withdrawn by the Biden administration.
‘Fundamental disagreement’: Republicans on the committee sought to draw attention to the Biden administration’s climate change goals and the overwhelming need for new mines and minerals, such as the nickel and cobalt reserves within the SNF.
Democrats on the committee uniformly opposed the two Stauber bills. Democratic Rep. Jared Huffman explained his opposition as representative of the fundamental disagreement between his caucus and the GOP on whether to exploit resources within certain national treasures, linking the Arctic National Wildlife Refuge, Grand Canyon, and Superior as areas that should be categorically off limits.
“Some of us believe that there are places in our country that are simply too unique, too pristine, too special to be put at risk by extraction industry or other industrial uses that would threaten those values,” he said.
TREASURY CLAIMS VICTORY ON THE OIL PRICE CAP: Treasury put out a progress report today claiming success for the price cap on Russian oil, one year after it was agreed to with allies.
“Despite widespread initial market skepticism around the price cap, market participants and geopolitical analysts have now acknowledged that the price cap is accomplishing both of its goals,” Treasury said. The goals, of course, were crimping Vladimir Putin’s war funding and keeping oil supply on the market.
The argument: Citing Russian Ministry of Finance data, Treasury officials said that Russian oil revenue from January to March of this year dropped by more than 40% compared to the same period in 2022 — even as its oil sales volumes have increased by as much as 10%, largely due to increased sales to India and China.
Still: Skeptics have said that it is hard to monitor enforcement of the cap, and have noted the large “shadow fleet” of illegal tankers that allow Russia to ship oil outside the cap, as well as ship-to-ship transfers conducted in ports in the Mediterranean.
What to watch: The oil price cap is expected to be a major topic of discussion at this weekend’s G-7 meeting in Japan. European Union foreign policy chief Josep Borrell has called for action to crack down on India reselling Russian oil into Europe as refined fuel, prompting backlash from Indian officials.
STATE TEASES MOVEMENT TOWARD ALASKA-ASIA LNG TRADE: Assistant Secretary of State Geoff Pyatt talked up the prospect of doing more to help Asian allies by supplying them LNG from Alaska as part of the administration’s export campaign.
“We as the United States, as the U.S. national security community, are still really processing what it means for the United States to be the largest LNG exporter,” Pyatt said this morning. The task, he added, is figuring out how to leverage that power to strengthen alliances and support our friends and allies.
Pyatt will visit Alaska next week, where the state is hosting the Alaska Sustainable Energy Conference, with a “focus on Asia.” The visit follows the State Department’s creation of a Japan-U.S. energy security dialogue in December.
LNG in Alaska: The U.S. LNG trade with Japan has been a hot topic and one bubbling under the surface of the recent and current G-7 meetings, where the Japanese have sought to more expansively endorse the use and role of LNG than other members.
Sen. Dan Sullivan has pressed the Biden administration to be more supportive of Japan’s LNG ambitions. Its proximity to Alaska gives backers of Alaska LNG, whose FERC approval the D.C. Circuit upheld this week, hope that the planned export facility will be an ideal instrument for enabling economic growth in Alaska and serving U.S. and allied energy security interests.
COURT UPHOLDS VINEYARD WIND PERMITS AGAINST LOCAL CHALLENGE: A federal judge ruled against a group of Nantucket residents yesterday that challenged the Bureau of Ocean Energy Management’s and the National Marine Fisheries Service’s approvals of Vineyard Wind off the coast of Massachusetts.
District Judge Indira Talwani found neither agency violated federal environmental laws approving the project, which is under construction and expected to begin generating electricity later this year to become the first commercial-scale offshore wind project in the U.S.
Two separate lawsuits challenging Vineyard Wind remain pending before Talwani in the U.S. District Court of Massachusetts.
JOSE ANDRES EXEMPTED FROM BAY AREA GAS STOVE BAN: The city of Palo Alto announced this week that celebrity chef Jose Andres could use gas stoves in his new planned restaurant, exempting him from the city’s controversial, all-electric policy for appliances in new construction.
City officials described the settlement with Andres as a “one-off,” saying that his was a unique situation since the restaurant, Zatinya, has been in the works since 2019.
Andres had complained about the ban, noting that Zaytinya’s eastern Mediterranean concept relies heavily on gas and live fire, and had threatened to pull out of the deal if he could not use the installed gas line. “Zaytinya cannot compromise the caliber of its cuisine and reputation,” attorneys for the property argued in a complaint filed last month.
EPA LAUNCHES SEA-LEVEL RISE VISUALIZER: EPA launched a new interactive map allowing users to see how rising sea levels are projected to affect coastal regions that are home to hazardous waste facilities.
The Rundown
Financial Times France holds up EU energy agreement over nuclear power
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