News of the Day:
Biden officials warn against hoarding gasoline amid shortages
Rachel Frazin, The Hill, May 12, 2021
Transportation Secretary Pete Buttigieg on Wednesday warned against “hoarding” gasoline amid increasing shortages, echoing similar comments from Energy Secretary Jennifer Granholm on Tuesday.
“This is a time to be sensible and to be safe,” Buttigieg said during a White House press briefing. “Of course we understand the concern in areas where people are encountering temporary supply disruptions, but hoarding does not make things better.”
He also echoed a tweet from the Consumer Product Safety Commission warning people against putting gasoline into plastic bags, saying, “Under no circumstances should gasoline ever be put into anything but a vehicle directly or an approved container.”
- Overnight Energy: Southeast sees gas shortages amid pipeline shutdown…
- Southeast sees gas shortages amid pipeline shutdown
As of Wednesday morning, 28 percent of gas stations in North Carolina, nearly 18 percent of gas stations in Georgia and 16 percent of stations in South Carolina were reporting outages, according to GasBuddy.
In a Tuesday press briefing, Granholm made comments similar to those made by Buttigieg, saying “things will be back to normal soon, [and] we’re asking people not to hoard.”
The shortages come as many people sought to purchase gas amid the news over the weekend that the Colonial Pipeline shut down. The pipeline says it provides 45 percent of the fuel consumed by the East Coast and shut down following a ransomware attack.
OIL:
Oil on track for 9-week high on rising demand outlooks
Reuters, May 12, 2021
Oil prices rose for a fourth day on Wednesday, putting both benchmarks on track for their highest closes in almost nine weeks, on signs of a speedy economic recovery and upbeat forecasts for energy demand.
Brent futures rose $1.09, or 1.6%, to $69.64 a barrel, while U.S. West Texas Intermediate (WTI) crude rose $1.08, or 1.7%, to $66.36.
That put WTI on track for its highest close since March 9 and Brent on track for its highest close since March 11.
The price gains came ahead of a report by the U.S. Energy Information Administration (EIA) expected to show a 2.8-million-barrel decline in U.S. crude inventories last week.
If correct, that would confirm data from the American Petroleum Institute (API) industry group late Tuesday that showed U.S. crude stocks fell by 2.5 million barrels in the week to May 7.
“Oil prices today are experiencing a lift on positive demand outlooks released by OPEC and IEA, which both came out with a similar consensus that oil demand will average 96.4 million barrels per day (bpd) in 2021,” said Louise Dickson, oil markets analyst at Rystad Energy.
The International Energy Agency (IEA) said in its monthly report that oil demand is already outstripping supply and the shortfall is expected to widen even if Iran boosts exports as vaccinations against COVID-19 bolster the global economy.
Oil prices were also supported by the outlook from the Organization of the Petroleum Exporting Countries, which on Tuesday stuck to a forecast for a strong recovery in world oil demand in 2021, with growth in China and the United States outweighing the impact of the coronavirus crisis in India.
India’s coronavirus death toll crossed 250,000 in the deadliest 24 hours since the pandemic began.
In the United States, fuel shortages worsened on Wednesday as the shutdown of the Colonial Pipeline, the nation’s largest fuel pipeline network, entered its sixth day and gasoline stations from Florida to Virginia ran out of supply in some cities.
U.S. unleaded gasoline prices hit an average $2.99 a gallon, the highest since November 2014, the American Automobile Association said.
“While a prolonged outage would be supportive for refined product prices, it could start to weigh on crude oil prices if refiners on the U.S. Gulf Coast are forced to reduce run rates due to a build-up of refined product inventories,” ING analysts said.
Colonial, which transports more than 2.5 million barrels per day, has said it hopes to restart a large portion of the network by the end of the week.
Oil also found support from positive U.S. and UK economic data.
U.S. consumer prices increased by the most in nearly 12 years in April as booming demand amid a reopening economy pushed against supply constraints, which could fuel financial market fears of a lengthy period of higher inflation.
GAS:
From the Washington Examiner, Daily on Energy:
SUMMER OF PAIN FOR NATURAL GAS: The U.S will generate less electricity this summer from natural gas because of higher prices, especially in Texas, where gas production was hit hard from the freezing event in February.
Renewables are poised to generate about 30% more electricity in Texas this summer than last, the EIA said yesterday in its Short-Term Energy Outlook, replacing high-cost natural gas. Coal is also poised to benefit from higher gas prices, with coal’s share of electricity generation nationally projected to increase from 22% in 2020 to 26% this summer. Emissions, of course, will bounce back this year, rising 6% after a record drop last year, with economic activity returning, EIA said.
MINING:
GOP’s Barr Proposes Helping Coal Country With Rare Earth Mining
Joe Deaux, Daniel Flatley, Bloomberg Green, May 12, 2021
GOP Representative Andy Barr is proposing legislation to expedite approval for coal companies to mine rare earths and other minerals critical for the electrification revolution the Biden administration covets.
The bill being introduced by the Kentucky Republican also would offer a lifeline to the struggling U.S. coal industry, which faces waning demand as power plants shift away from the dirtiest fossil fuel.
The measure would amend the so-called FAST act, a program that funds surface transportation infrastructure planning and investment. It would expand permitting to streamline and expedite the approval process for existing coal mines to extract and process the minerals the U.S. says are crucial for batteries and other green energy infrastructure.
Barr’s legislation would have to get backing from Democrats, who control the House, in order for it to even get a vote. But it comes amid a broader push in Congress to confront China on technology and innovation and reduce reliance on the country for critical materials. China has dominated worldwide production of the rare earths, a group of 17 elements needed for many high-tech products, for more than a decade, according to the American Geosciences Institute.
“Bringing second life and purpose to one of the United States’ most abundant resources — coal — will strengthen our supply chain and protect national security,” Barr said in a statement. “My legislation fosters the domestic production of rare-earth and critical minerals used in national security technology as well as in the daily lives of Americans through computers, televisions, and vehicles.”
Coal production has slumped by more than half since peaking in 2008, and mining experts say the quickest route to domestic production of the critical rare-earth metals would be through existing facilities that won’t have to go through the rigorous approval process that new mines typically face.
The legislation also comes as the Biden administration looks to end domestic reliance on China and other adversaries for crucial goods. The Senate Commerce Committee on Wednesday plans to take up separate legislation to boost domestic research and development and increase semiconductor manufacturing in the U.S.
POLITICS:
EPA water nominee commits to ‘enduring solutions’ in confirmation hearing
Zack Budryk, The Hill, May 12, 2021
Radhika Fox, President Biden’s nominee to be the Environmental Protection Agency’s assistant administrator for water, on Wednesday pledged to “listen to all sides in order to find enduring solutions” in a hearing before the Senate Environment and Public Works Committee.
Fox, who currently serves in the position on an acting basis, told the committee that “most people don’t think about” the policies and programs that go into Americans’ water service, including “the key role of states and tribes in providing these essential water services.”
“It just works, for most Americans but not for all,” she added, invoking the water crisis in Flint, Mich., after its water supply was contaminated.
She went on to argue that the role calls for active engagement with stakeholders, saying “we can’t make policy sitting behind a desk in Washington, D.C. We have to actively engage with all who are impacted by our decisions, whether it’s water utilities, farmers and ranchers, community orgs, environmental groups, states, tribes, local officials and many, many others.”
“Water is the great uniter. It can unite this country; it can help pull us out of the compounding crises that face our nation, whether it’s a global pandemic, economic recession, longstanding racial inequities and climate change,” she added.
Ranking member Sen. Shelley Moore Capito (R-W.Va.) questioned Fox on her position on the Obama administration’s 2015 Navigable Waters Protection Rule, which significantly broadened the definition of “waters of the United States,” later curtailed under the Trump administration.
Fox responded that “we are in the process of reviewing” the rule, adding that the EPA is “trying to understand, what are the lessons learned from an implementation perspective on both the 2015 rule and the 2020 rule?”
“Administrator [Michael] Regan and I want an enduring definition of waters of the US, one that can withstand administration changes,” she added.
Asked what her priorities would be if confirmed, Fox said they would include “mak[ing] sure the Office of Water is implementing the range of water infrastructure funding and financing programs this committee has taken so much leadership on developing.”
Another priority, Fox said, would be addressing per- and polyfluoroalkyl substances (PFAS) and other emerging contaminants, noting that Regan has asked her to co-chair an executive council on PFAS.
“That is going to be important as we think about making sure that water is clean for all families,” she said.
CLIMATE CHANGE:
U.S. eyes nuclear reactor tax credit to meet climate goals -sources
Timothy Gardner, Jarrett Renshaw, Reuters, May 12, 2021
The White House has signaled privately to lawmakers and stakeholders in recent weeks that it supports taxpayer subsidies to keep nuclear facilities from closing and making it harder to meet U.S. climate goals, three sources familiar with the discussions told Reuters.
New subsidies, in the form of “production tax credits,” would likely be swept into President Joe Biden’s multi-trillion-dollar legislative effort to invest in infrastructure and jobs, the sources said.
Wind and solar power producers already get these tax rebates based on levels of energy they generate.
Biden wants the U.S. power industry to be emissions free by 2035. He is asking Congress to extend or create tax credits aimed at wind, solar and battery manufacturing as part of his $2.3 trillion American Jobs Plan.
The United States leads the world with more than 90 nuclear reactors, the country’s top source of emissions-free power generation. Yet aging plants have been closing due to rising security costs and competition from plentiful natural gas, wind, and solar power, which are becoming less pricey.
“There’s a deepening understanding within the administration that it needs nuclear to meet its zero-emission goals,” said a source engaged in the talks and familiar with the White House thinking.
The White House had no comment.
New York state’s Indian Point nuclear power plant, owned by Entergy Corp (ETR.N), closed its last reactor on April 30. In Illinois, Exelon Corp (EXC.O) has said it might close four reactors at two plants by November, if the state does not implement subsidies.
Nuclear plants provide thousands of union jobs that pay some of the highest salaries in the energy business. Biden’s allies in building trades unions have lobbied for the production tax credits.
The credits also have the support of Democratic Senator Joe Manchin from the energy-rich state of West Virginia, two of the sources said. He holds outsized power in the evenly divided Senate because he can block his party’s agenda.
Manchin’s office did not immediately respond to a request for comment.
THE STRUGGLE TO SAVE REACTORS
Preliminary plans for a federal nuclear power production tax credit in deregulated markets bar companies from double-dipping in states that offer similar assistance, according to one of the sources. Companies also would have to prove financial hardship, the source said.
While Biden pledged in his campaign to boost spending for research on new generation of advanced nuclear plants, his White House, like the preceding Trump and Obama administrations, has struggled to devise a blueprint to save the existing reactors.
The Biden administration has also supported a Clean Energy Standard (CES) in the infrastructure plan, a mechanism that could support existing nuclear plants.
Such a standard could co-exist with production tax credits, which would set gradually more ambitious targets for the power industry to cut emissions until they hit net-zero.
The production tax credit could be implemented on a faster timetable and could help save even the Illinois plants, some experts say. Exelon, however, believes that the only way they can be saved is by Illinois taking action.
“We’re racing to cut emissions, create jobs, and shore up local economies — allowing nuclear plants to close sets us back on all three fronts,” said Ryan Fitzpatrick, director of the climate and energy program at Third Way, a moderate think tank.
An activist group slammed the of tax credits for aging plants saying it would slow deployment of renewable energy like wind and solar power. “A nuclear bailout is wrong for taxpayers, wrong for ratepayers, and wrong for the climate,” said Lukas Ross, program manager at Friends of the Earth.