Today’s Key Takeaways: NJ Not A Fan of Wind? Oil up 2%. Natural gas demand rebuts IEA peak demand projections. Listen to the Uranium market. Undermining U.S. energy security with newest Department of Interior appointment.
NEWS OF THE DAY:
Ørsted halts New Jersey wind power projects in blow for Biden’s energy plans
Rebecca Falconer, Axios, November 1, 2023
Ørsted announced Tuesday it will cease work on two U.S. offshore wind projects in New Jersey.
Why it matters: The world’s largest wind energy developer halting these projects, Ocean Wind 1 and 2, is a blow to President Biden’s clean energy drive to cut emissions, which includes the goal of reaching 30 gigawatts of offshore wind-generating capacity in U.S. waters by 2030.
- It’s also a setback for New Jersey Gov. Phil Murphy’s (D) plans for the state to be 100% clean energy by 2035 and N.J. Democrats trying to hold onto majorities in the Legislature as wind power becomes a flashpoint in the Nov. 7 elections.
Driving the news: “Macroeconomic factors have changed dramatically over a short period of time, with high inflation, rising interest rates, and supply chain bottlenecks impacting our long-term capital investments,” said David Hardy, Ørsted’s Americas CEO.
- “As a result, we have no choice but to cease development of Ocean Wind 1 and Ocean Wind 2.”
What they’re saying: White House spokesperson Michael Kikukawa tells Axios in an emailed statement that “momentum remains on the side of an expanding U.S. offshore wind industry,” citing nearly $8 billion in offshore wind investments since Biden signed his signature Inflation Reduction Act.
- “From day one, the Biden-Harris Administration has used every available tool to advance the growing American offshore wind industry, and we are seeing the results,” he adds.
Thought bubble, via Axios’ Ben Gaman: This is perhaps the starkest evidence yet of economic hurdles undercutting White House hopes for a major U.S. offshore wind buildout.
The tech has potential to play a role cutting U.S. emissions, but a combination of interest rates, inflation, supply chain challenges and more are slowing offshore wind down even as several projects move forward.
Of note: Ørsted will proceed with its Revolution Wind project in Connecticut and Rhode Island, per a company statement.
Oil up 2% as war rages in Middle East and investors await Fed statement
Scott Disavino Reuters, November 1, 2023
- U.S. Fed widely expected to keep interest rates steady
- Glum factory activity from China adds to fragile recovery fears
- No disruption to oil supplies from Middle East conflict so far
- U.S. crude storage build smaller than expected last week – EIA
Natural Gas Demand Suggests The IEA Got Peak Demand Wrong
Tsvetana Paraskova, OilPrice.Com, November 1, 2023
- The IEA said in its World Energy Outlook 2023 in October that global natural gas demand growth will slow down this decade compared to the decade to 2021 and peak by 2030.
- Industry executives expect a part of Europe’s gas demand to have been lost for good during the energy crisis last year, but they do not see demand in Asia slackening anytime soon.
- Executives in the natural gas industry expect strong demand for the fuel in Asia through 2040 and 2050.
Executives in the natural gas industry expect strong demand for the fuel in Asia through 2040 and 2050 as countries continue their coal-to-gas switch policy and look to meet emission reduction goals.
Recent estimates and reports diverge from the International Energy Agency’s (IEA) peak fossil fuel demand projections announced in recent weeks. The IEA expects demand for all three fossil fuels – oil, coal, and natural gas – to peak before the end of this decade.
WHAT THE URANIUM MARKET IS SAYING: Uranium prices are set to end the month of October at their highest since more than a decade ago — providing signs of high demand for nuclear power as countries shift away from fossil fuels and pursue ambitious decarbonization goals.
With the spot price of uranium set at $74 per pound as of yesterday’s close, according to nuclear data provider UxC, strong demand from utilities is coinciding with low inventories and threats to supply, creating a price hike that hasn’t been seen in more than 12 years. Political turmoil in Niger, a large uranium-producing country, and disruption from Russia-supplied sources are feeding into the price hike.
“I think it’s fundamental supply-demand [dynamics],” Nima Ashkeboussi, a senior director of fuel and radiation safety at the Nuclear Energy Institute, told the Washington Examiner. “Demand has gone higher. Supply has kind of been steady or decreasing due to a prolonged down market. And adding on top of that, some of the geopolitical issues going on right now has led to where we are with the price.”
Where demand is coming from: Countries are now expressing a renewed global interest in nuclear energy, with several states reversing premature decisions to shut down nuclear power plants, including Europe and the United States. Earlier this year, U.S. federal regulators granted an exemption that will keep the California Diablo Canyon nuclear power plant reactors operating until November 2024 and August 2025 — and an application for a license extension is expected.
China has 22 nuclear reactors under construction, with an expected generating capacity of approximately 22.7 gigawatts. Japan has also made notable moves in the nuclear space, approving a law that will allow nuclear power plants to operate beyond 60 years and resuming operations at the Takahama Nuclear Power Plant after a 12-year hiatus.
Where supply is threatened: This renewed demand is coinciding with threats to global supply stemming from the coup in Niger, where generals ousted President Mohamed Bazoum in July and since then have upped their attacks against counterterrorism efforts from Western nations. There are also concerns circulating around how the market could be affected if the U.S. were to ban Russian uranium imports, following its bar on oil and gas imports.
“There are ongoing concerns about the potential for various supplies, especially those of enriched uranium from Russia, to be removed from the market due to trade actions (e.g., a ban on Russian imports by the U.S.),” UxC President Jonathan Hinze said in a statement to the Washington Examiner.
Canadian uranium major Cameco has also reduced its production forecast for this year, citing challenges at its Cigar Lake Mine and Key Lake mill due to equipment reliability and maintenance issues.
From the Washington Examiner, Daily on Energy
Biden appears to undermine U.S. energy security with “far-left” DOI appointment
Bethany Fischer, World Oil, October 31, 2023
On Oct. 31, the Biden administration’s Department of Interior (DOI) appointed Laura Daniel-Davis as Acting Deputy Secretary. According to Fox News, the promotion comes after two previously failed nominations over what Senator Joe Manchin (D-W.V.) considered “playing partisan politics” regarding U.S. energy security.
Daniel-Davis has more than 14 years of working at DOI across multiple administrations, the department said in a press release. She served as Chief Of Staff to Interior Secretaries Sally Jewell and Ken Salazar, as well as Associate Deputy Secretary during the Obama-Biden administration.
Daniel-Davis was involved in several so-called “green” initiatives, including permitting the U.S.’ first offshore wind project. She also served at the department during the Clinton-Gore administration in a variety of roles, including Associate Director of Congressional and Legislative Affairs. Prior to joining the Biden administration, Daniel-Davis served as Chief of Policy and Advocacy for the National Wildlife Federation, which focused on radical climate policies, according to Fox.
Daniel-Davis appeared in two Senate Energy and Natural Resources Committee confirmation hearings since 2021, when President Biden first nominated her for the position. However, both hearings failed, due to Republican opposition to her far-left climate agenda.
Fox News quoted Senate Energy and Natural Resources Committee Ranking Member John Barrasso (R-Wyo.), saying that Daniel-Davis “consistently blocked access to important minerals and restricted oil and gas leasing on federal lands.” Barrasso claimed that the appointment is just another part of this administration’s “devotion to a radical, anti-American energy agenda.”
Daniel-Davis has found herself in the hot seat with more than one government agency. In March 2023, House Oversight Chairman James Comer, (R-Ky.), and House Natural Resources Chairman Bruce Westerman, (R-Alaska) investigated her over a leaked memo that showed lower royalty rates for an Alaskan offshore oil and gas lease would enhance U.S. energy security, Fox News reported.
Daniel-Davis also has been accused of violating federal regulations regarding conflict of interests surrounding Alaskan oil and gas leases by watchdog group Protect the Public’s Trust, whose director was quoted as saying, “members of Congress are already demanding an audit of the ethics office at Interior, and rather than treading lightly, they appear to be doubling down,” according to Fox News.
The federal probe and subsequent accusations prompted Sen. Manchin’s condemnation of her previous nominations.