News of the Day:
From the Washington Examiner, Daily on Energy:
GRANHOLM’S OLIVE BRANCH TO GOP ON LNG AND CRITICAL MINERALS: During yesterday’s craziness, we missed a couple things in Granholm’s hearing to be Energy secretary, in which she sought to assure Republicans that fossil fuels through carbon management techniques would play a role in Biden’s net-zero emissions goal.
She also committed to follow federal law as it relates to approving applications for exporting LNG providing clarity in an area where Biden was murky during the campaign.
“The Natural Gas Act of 1938 dictates the requirements and the considerations, and I would certainly abide by that act, including issues related to whether something is in the public interest, what the economics are, what the geopolitical concerns are,” Granholm said in response to a question from GOP Sen. Mike Lee on how climate considerations would factor into DOE’s analysis.
Granholm added in some cases, such as small-scale LNG exports to Caribbean islands, approvals could even provide a net climate benefit compared to other dirtier fuels.
She did indicate, though, that the administration, likely through FERC which works with DOE in approving LNG projects, would apply stricter greenhouse gas reviews.
“I would also want to work with the natural gas providers to see if we could continue to reduce greenhouse gas emissions at the point of production,” she added.
Critical minerals key climate goals: Granholm also promised Republicans she shares their interest in boosting domestic mining for critical minerals that could be crucial to developing more batteries, wind turbines, and solar panels. The issue is tricky for Democrats and environmentalists, who want to expand clean energy development but generally oppose new mining.
“These minerals can be mined in a responsible way in a way that respects the environment,” Granholm said. “We don’t want to be under the thumb of China or other countries that corner the market on minerals.” She added she is “enthusiastically supportive” of DOE’s role in critical minerals “for both jobs and energy security and supply chain security in the United States.”
Today’s Rasmussen Poll:
Most voters say former President Trump should be acquitted in next month’s Senate impeachment trial, which they expect to make America’s political division worse.
A new Rasmussen Reports national telephone and online survey finds that 50% of Likely U.S. Voters say the Senate should not convict Trump of “high crimes and misdemeanors” in the trial scheduled to start Feb. 9. Forty-five percent (45%) of voters think Trump should be convicted.
By a 3-to-1 margin, however, voters expect the Senate trial to make the country more divided, rather than more united. Fifty-seven percent (57%) of voters say Trump’s trial will cause more division in America, compared to 19% who say the trial will help unite the country. Twenty percent (20%) say the impeachment trial will not make much difference.
Argus Live: Crude prices could surge to $80/bl in 2021
Argus, January 27, 2021
Global crude prices could soar to $80/bl this year because of severe inventory shortages and rising demand, but US shale producers are unlikely to ramp up production, a panel of experts told the Argus Live Crude Summit today.
Crude supply is shrinking much faster than widely estimated, Marshall Adkins, a managing director who oversees energy investment banking at Raymond James, said. Global inventories have dropped by about 370mn bl since last May, which means Opec+ needs to produce at full capacity by the end of 2021 to keep up with demand.
Once demand starts to gain momentum, the resulting supply crunch will cause prices to jump by as much as 35pc this year to $80/bl from a little over $50/bl today.
The outlook “is exceptionally bullish,” Adkins said. “Oil demand has been stronger and faster than expected. And inventories are falling very fast.”
Ed Morse, managing director and global head of commodity research at Citi Group, concurred.
“The world overestimated the decline in demand,” Morse said. “And the world is now dramatically underestimating the decline in inventories.”
New LNG projects will start going ahead, but green credentials to be closely watched
Nina Chestney, Reuters, January 26, 2021
Companies will press ahead with some new liquefied natural gas (LNG) projects despite pressure on lenders to divert funding from fossil fuels, industry executives said at the annual European Gas Conference, but scrutiny of their environmental standards will be tight.
Several LNG projects have been delayed or cancelled in recent years due to weak gas prices and worries about oversupply.
While prices have recovered somewhat as Asian demand picks up, lenders also face growing calls to starve fossil fuel projects of finance due to pressure to meet climate change targets.
Mark Gyetvay, chief financial officer, and deputy chairman of the management board of Russian gas producer Novatek, told the conference, held virtually, that by the end of the decade, the LNG market will be 150 million tons short on the supply side.
Coal wins curious reprieve in Biden’s assault on climate change
Bloomberg News, January 28, 2021
President Joe Biden enlisted the entire US government in the fight against climate change on Wednesday, even telling the Central Intelligence Agency to consider global warming a national security threat.
Yet he left out coal — the fossil fuel most widely blamed for global warming — when he froze the sale of leases to extract oil and gas from federal land.
It was a conspicuous omission for a president who has vowed to make the electric grid carbon-free by 2035 and who has said the world’s “future rests in renewable energy.”Top of Form
White House national climate adviser Gina McCarthy said coal leasing will still get a review as part of a broad analysis of fossil-fuel leasing. But unlike oil and gas development on federal land, which Biden promised to target when running for president, a pause on selling coal rights “was not part of the commitments on the campaign.”
Administration officials had planned to include coal in the order, but the decision was made to leave it off the list by Monday afternoon, according to three people familiar with the matter who asked not to be named describing internal deliberations.
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Bank cop halts Trump rule boosting loans to private prisons, energy industry
Victoria Guida, Politico, January 28, 2021
A key bank regulator on Thursday halted a last-minute, Trump-era rule that would prevent big banks from denying loans and other services to entire industries like energy or private prisons, a regulation that had drawn ire not just from Democrats but from banks themselves.
The Office of the Comptroller of the Currency said the decision on the fate of the rule should be left to whomever President Joe Biden names to head the national bank regulator.
“Pausing publication of the rule in the Federal Register will allow the next confirmed Comptroller of the Currency to review the final rule and the public comments the OCC received, as part of an orderly transition,” the OCC said in a press release.
The rule, finalized before former acting Comptroller of the Currency Brian Brooks left office earlier this month, has been criticized by lenders, investors, consumer groups, Democrats, and some conservatives.
Lenders increasingly are weighing the economic risks of climate change and are under pressure from activists and shareholders to adopt business practices that are environmentally and socially responsible. In some cases, that has led them to deny loans to gun manufacturers, oil and gas firms and other categories of companies.
The regulation finalized under Brooks would require banks to treat customers on an individual basis rather than refusing to serve them because they’re part of a particular industry.
CLIMATE CHANGE CONVERSATIONS:
Climate Change Does Not Mean Job Creation
Jim Geraghty, National Review, January 28, 2021
Yesterday, President Biden announced, “Today is ‘Climate Day’ at the White House and — which means that today is ‘Jobs Day’ at the White House. We’re talking about American innovation, American products, American labor.”
Biden’s chief climate adviser, former Obama-era EPA administrator Gina McCarthy, added, “when we say, ‘climate change,’ eventually, people are going to think ‘jobs,’ just like President Biden when he hears the words ‘climate change.’”
The problem is that Biden’s first major move on climate, canceling the Keystone Pipeline, already eliminated 1,000 jobs, according to TC Energy. And defenders of the Biden administration are being ludicrously disingenuous when they insist that “most of the [Keystone Pipeline] jobs would be temporary.” Yes, all construction jobs are temporary. (It only seems like the contractor working on your kitchen is taking forever.) When the construction crew has built what they’ve been assigned to build, that job is over, and they have to find a new one.
The Biden administration answer to those 1,000 laid-off workers is to tell them to find other jobs. A week ago, the incoming transportation secretary, Pete Buttigieg, declared in his confirmation hearing, “We are very eager to see those workers continue to be employed in good-paying union jobs, even if they might be different ones.”
And yesterday, “Special Climate Envoy” John Kerry suggested that coal miners could and would easily transition into the solar-power industry: “You know, you look at the consequences of black lung for a miner, for instance, and measure that against the fastest-growing job in the United States before COVID was solar power technician. The same people can do those jobs, but the choice of doing the solar power one now is a better choice.”