Today’s Key Takeaways: After increasing two years in a row, U.S. emissions expected to drop 3 percent. Senator Merkley attempts to rein in LNG exports. USGS investing in critical minerals – including Alaska. ENGO’s fight ENGO’s over offshore wind. $1 billion confidence boost in refiner Phillips 66.
News of the Day:
U.S. Carbon Dioxide Emissions Expected to Decline by 3 Percent This Year
Institute for Energy Research, November 29, 2023
Key Takeaways
- Carbon Dioxide emissions are estimated to drop 3 percent this year as coal plants are idled and retired and natural gas mostly picks up the slack.
- Carbon dioxide emissions increased in 2021 and 2022 as the impact of forced COVID closures that hammered energy consumption and economic growth faded.
- Global carbon dioxide emissions are going in the opposite direction, with a predicted 1 percent increase in emissions led by China, the world’s largest emitter by far.
- U.S. coal consumption will reach its lowest level since 1973 despite an economy over 3.4 times larger in real terms.
- President Biden has promised the United Nations that the United States will reduce carbon dioxide by 50 to 52 percent of 2005 levels by the end of 2030, but this year they are expected to be only at a 20 percent reduction from 2005 levels.
- Biden plans on spending hundreds of billions of taxpayer dollars subsidizing renewable energy and other “green technologies” to produce almost 150 percent of the reductions in the last 18 years over the next 7 years.
- China is benefiting from Biden’s plan, as it allows them to burn over half the world’s coal to make products Biden is demanding Americans buy.
OIL:
Activist Investor Elliott Buys $1-Billion Stake in U.S. Refiner Phillips 66
Charles Kennedy, OilPrice.Com, November 29, 2023
Elliott Investment Management, an activist investment group, said on Wednesday it had amassed a $1-billion stake in one of the largest U.S. refiners, Phillips 66, and expressed dissatisfaction with the company’s underperformance in recent years.
Apart from disclosing its $1 billion investment in Phillips 66, the activist investment firm sent a letter to the Board of Directors of Phillips 66, in which it outlined its ideas of how the refiner could regain trust with investors and unlock significant and sustainable value for its shareholders.
“Elliott sees approximately 75% upside to the current stock price,” the activist investor said today, sending the stock price of Phillips 66 (NYSE: PSX) up by 5% in pre-market trade in New York.
According to Elliott, Phillips 66’s performance has declined in recent years “as it has shifted its focus away from its Refining segment.”
“As a result, operational execution has suffered, and the Company was poorly positioned to take advantage of the refining super-cycle in 2022 and 2023,” Elliott said in the letter.
During the same period, Phillips 66 peers such as Marathon Petroleum and Valero Energy “were far better prepared,” according to the activist investor.
Phillips 66’s refining operating expenses per barrel have increased the gap with the same metric at Valero, undermining confidence among Phillips 66 investors that the company has the ability to run its refining operations efficiently, Elliott said.
“At present, we believe Mr. Lashier and the rest of the management team deserve investor support so long as they demonstrate meaningful progress against these targets,” the investor wrote.
Phillips 66 missed analyst expectations for the third-quarter earnings, despite stronger refining margins compared to the second quarter.
To compare, for the same quarter, Valero Energy, the second-largest U.S. refiner by capacity, booked higher-than-expected profits amid continued strong product demand in the United States.
GAS:
MERKLEY RENEWS CALL TO REIN IN LNG EXPORTS: Sen. Jeff Merkley of Oregon criticized U.S. LNG exports yesterday, voicing his strong opposition to the construction of additional LNG export facilities to help supply the EU as both Europe and the U.S. look to deliver on their emissions reduction targets.
Merkley said that exporting gas, even though it helped Europe avoid an energy disaster last year, is a “lose-lose” situation that risks significantly worsening climate change.
While Russia’s invasion of Ukraine upended the global commodities market, he said, the U.S. should bear in mind how long the EU will need additional LNG exports from the U.S.—especially as it looks to meet its own climate goals.
The question is therefore, “Does Europe need this forever?” he asked, speaking at an event last night hosted by Canary Media. “And the answer is no.”
“Europe is trying to dramatically reduce their reliance on fossil gas because they know, as we know … that we can’t possibly reduce the impact on climate if we’re continuing to use fossil fuels,” Merkley said. “So we have to phase them out.”
He also criticized the way that DOE and FERC currently assess the environmental effects of LNG, accusing them of essentially using a “rubber stamp” to broadly approve new projects and export terminals.
“In the worst case, it’s about twice as bad or more than twice as bad as locally produced coal,” Merkley said of the LNG facilities and planned export terminals.
“We like to pretend that this is somehow better for the world and that we’re some kind of stellar example, when it’s false,” Merkley said. “We can’t afford, with an issue of this magnitude, to be trotting out falsehoods to make ourselves look good.” Read more from the event here.
From the Washington Examiner, Daily on Energy, November 29, 2023
MINING:
USGS invests millions in critical minerals
Shane Lasley, Metal Tech News, November 29, 2023
In 2023 alone, the federal geological survey invested $51M into Earth MRI scans of 35 states as part of a nationwide critical minerals search.
From rare earths in Northern Maine to lithium in Southern California and titanium in Florida to 29 critical minerals in Alaska, the United States Geological Survey is investing heavily in strengthening domestic supply chains for the 50 minerals and metals critical to every sector of the American economy.
This nationwide search for critical minerals is being carried out under the Earth Mapping Resources Initiative, or Earth MRI, a clever moniker that reflects the earth penetrating scans carried out under the program that are providing geoscientists with data needed to diagnose the best places in America to find critical minerals.
To efficiently and effectively carry out these Earth MRI scans, USGS is partnering with geologists at the state level to help identify the best places to look and to carry out the groundwork.
In fiscal year 2023 alone, the USGS distributed more than $51 million across 35 states and Puerto Rico to fund geoscience data collection and mapping in partnership with state geological surveys to identify areas of the country with potential for critical minerals.
“Investments from President Biden’s Investing in America agenda are already helping us better understand our domestic critical mineral resources, a key step in securing a reliable and sustainable supply of the critical minerals that power everything from household appliances and electronics to low-carbon energy technologies like batteries and wind turbines,” said U.S. Geological Survey Director Dave Applegate.
POLITICS:
Environmentalists Face Off Against Environmentalists Over Offshore Wind Projects
Ken Wells, The Wall Street Journal, November 28, 2023
Supporters insist that, when done properly, projects can avoid harming marine species
Offshore wind turbines are pitting environmentalists against environmentalists—threatening to impede progress toward an ambitious U.S. goal for such projects.
The Energy Department estimates offshore wind turbines could produce as much as 20% of regional power needs along the densely populated Eastern Seaboard from Florida to Maine by 2050.
To reach that goal, the Biden administration had hoped to green-light 30 gigawatts from utility-scale offshore wind farms by 2030—enough to power nine million homes. That now seems wildly ambitious, as billions of dollars in projects have been canceled amid staggering cost overruns, soaring interest rates and supply-chain delays.
Added to these economic woes are persistent environmental concerns, as attested to by some recent federal lawsuits. In September, for example, Cape May County, N.J., and a coalition of regional environmental, fisheries and tourism groups sought to stop development of two utility-scale projects off the New Jersey coast.