Oil slumps. U.S. LNG Sets Record. House Dems Drop. Green Hydrogen Moves.

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Today’s Key Takeaways:  Dunleavy challenges new definition of WOTUS in comments to Army Corp of Engineers. U.S. LNG exporters set a new loading record on Saturday – every one of the nation’s seven operational terminals had an LNG carrier berthed alongside. Brazil to boost mining for gold in the Amazon rainforest. 22 democrat house members retiring in 2022. U.S. Energy Department is requesting stakeholder input on three green hydrogen project items.


Governor Dunleavy challenges new Waters of U.S. definition
KINY, February 14, 2022

– Governor Mike Dunleavy challenged the proposed new definition of WOTUS, or Waters of the United States, in comments submitted to the Environmental Protection Agency and the United States Army Corps of Engineers.

The Biden Administration is proposing to expand the definition for WOTUS, under which, Alaska waters would be designated as WOTUS and thus fall under federal control.

“Alaska stands to be disproportionately affected by the Proposed Rule, and particularly, by the vast expansion of federal jurisdiction it will inflict on states,” said Governor Dunleavy said in a release. “Alaska needs regulations tailored to the diversity and abundance of its waters, not a one-size-fits-all rule imposing excessive federal requirements.”

The Governor noted that Alaska has significantly more water than all other states. According to a release from his office, Alaska has roughly 900,000 miles of navigable rivers and streams; 22,000 square miles of lakes; nearly 27,000 miles of coastline. In addition, Alaska has more wetlands than every other state combined, which cover 43 percent of the state’s surface area.

The submitted comments highlight four areas of concern, on is that the proposed rule would expand WOTUS beyond any previous definition. Another they said that the science underpinning the Proposed Rule is insufficient to support its application to several Alaska-specific categories of waters.

The release states that the proposed rule impedes Alaska in carrying out its constitutionally imposed responsibility to manage its own natural resources and impinges on Alaska’s management rights under the federal Alaska Statehood Act. In addition, they said the proposed rule disregards the language in the federal Clean Water Act which “recognize[s], preserve[s], and protect[s] the primary responsibilities and rights of state[s]” to manage and protect water resources.

In his response, Governor Dunleavy has requested four exclusions for Alaska from the WOTUS definition based on the data gaps in the science used to support the Proposed Rule: (1) Alaska permafrost wetlands, (2) Alaska forested wetlands, (3) Alaska wetland mosaics, and (4) Alaska waters and lands falling under the “other waters” category in the Proposed Rule.


Oil slumps from 7-year high as Russia says withdraws some troops
Stephanie Kelley, Reuters, February 15, 2022

Oil tumbled over 4% from a seven-year high on Tuesday after Russia said some of its military units were returning to their bases after exercises near Ukraine, a move that appeared to de-escalate tension between Moscow and the West.

It was not clear how many units were being withdrawn, and by what distance, after a build-up of an estimated 130,000 Russian troops. An earlier Interfax report on the troop movements had prompted oil to extend losses. read more

“We went from fearing that our worst fears would be realized to maybe there’s a diplomatic offramp here after all. That brings a lot of relief in terms of keeping supplies on the market,” said John Kilduff, partner at Again Capital in New York. “We can’t afford to lose a single barrel these days.”

Brent crude fell $3.99, or 4.1%, to $92.49 a barrel by 11:11 a.m. EST (1611 GMT). U.S. West Texas Intermediate (WTI) crude fell $4.28, or 4.5%, to $91.18 a barrel.

Both oil benchmarks hit their highest since September 2014 on Monday, with Brent touching $96.78 and WTI reaching $95.82. The price of Brent jumped 50% in 2021, while WTI soared around 60%, as a global recovery in demand from the COVID-19 pandemic strained supply.

The latest Russia-Ukraine development drew a cautious response from Ukraine and Britain, after days of U.S. and British warnings that Moscow might invade its neighbour at any time.

British Prime Minister Boris Johnson and U.S. President Joe Biden had agreed in a call on Monday there was a crucial window for diplomacy. read more

Investors are also watching talks between the United States and Iran on reviving Tehran’s nuclear deal with world powers, which could potentially allow for higher Iranian oil exports.

Russian Foreign Minister Sergei Lavrov spoke to his Iranian counterpart Hossein Amirabdollahian on Monday, and they noted a “tangible move forward” in reviving the Iran nuclear deal, Russia’s foreign ministry said. read more

Underlining the tight supply and demand balance, the latest weekly reports on U.S. inventories were expected to show another drop in crude stocks, which are at over three-year lows.

The first of this week’s two reports, from the American Petroleum Institute, is due at 4:30 p.m. EST (2130 GMT).


U.S. LNG Exporters Set a New Record for Daily Volume
The Maritime Executive, February 13, 2022

With U.S. domestic natural gas trading at the highest prices seen since 2014, America’s LNG exporters are ramping up gas exports at a record rate, sending cargoes overseas for consumers in Europe and Asia – where prices are far higher. 

According to Bloomberg, U.S. LNG exporters set a new loading record on Saturday, when – for the first time ever – every one of the nation’s seven operational terminals had an LNG carrier berthed alongside. Together, these plants took in a record-setting 13.3 billion cubic feet of natural gas on Saturday, roughly equivalent to 10 percent of the daily natural gas demand of the United States in winter.

About two-thirds of the volume is bound for the European market, where pinched supplies and fears of a major conflict in Ukraine have driven up prices to record levels. Europe gets about 40 percent of its gas supply from Russia, and the share rises to 55 percent for consumers in Germany. This dependence gives Russia “tremendous coercive power over Europe’s economies,” according to former national security advisor Gen. H.R. McMaster – and LNG from non-Russian suppliers may help to offset it. 

New concerns over domestic pricing

Though U.S. LNG exports to Europe are a boost for America’s allies, some energy analysts note that the pace is contributing to a tightening gas market and rising domestic prices. Last week, a group of 10 senators called for the Department of Energy to limit LNG exports until it has determined the effects on domestic gas supplies.

“Despite the heavy burden rising natural gas prices has placed on American families, the U.S. is exporting record levels of natural gas to other countries, a trend that is only expected to continue,” the senators wrote in a letter to Energy Secretary Jennifer Granholm. “Projections of exponentially increased U.S. exports will cause real harm to American families’ ability to pay their home energy bills.”

The senators called on DOE to study LNG exports’ impact on domestic prices and the public interest, and to come up with a plan to make sure that natural gas is affordable for American households. Until that work is done, they called for the department to consider halting permit approvals for additional U.S. LNG export terminals.


Brazil’s Bolsonaro issues decrees to boost mining of Amazon
David Biller, Associated Press, February 14, 2022

Brazil’s President Jair Bolsonaro has issued two decrees to boost gold prospecting with a focus on the Amazon rainforest

Brazil’s President Jair Bolsonaro has issued two decrees to drive gold prospecting with a focus on the Amazon rainforest, according to the texts published Monday in the official gazette.

The Program to Support Development of Artisanal and Small-Scale Mining created by one decree aims to strengthen policies and stimulate best practices, according to the text. The Amazon “will be the priority region for the development of works,” it says.

The other alters existing laws and regulations, for example requiring the nation’s mining regulator to establish simplified criteria for the analysis of permit requests for prospecting.

The measures spurred outrage from environmental and Indigenous rights groups, which warned they would exacerbate the illegal destruction of the world’s largest tropical rainforest and pollution of its waterways with mercury, used to separate gold.

“They run opposite to what the federal government should be doing,” Larissa Rodrigues, portfolio manager for an environmental think tank Choices Institute, said by phone. “There is enormous illegality circulating in the chain that is measurable. The government should be concerned about controlling that chain and not giving more stimulus to it.”

Bolsonaro has been an outspoken champion of mining the Amazon since his presidential campaign in 2018, promising to unearth the rainforest’s vast mineral wealth. In doing so, he garnered vast support from prospectors. He is widely expected to run for reelection in October.

Nongovernment organizations have been sounding the alarm about how both the president’s comments and the reduction of environmental oversight during his term have emboldened illegal miners and spurred a gold rush, wreaking vast damage where they work.

But Bolsonaro, the son of a prospector himself, has been unmoved. He characterizes prospecting as one of the few alternatives available to people living in a vast, poor region with few opportunities.

“Prospecting represents elevated potential for the generation of wealth and income for a population of hundreds of thousands of people,” according to a statement from the secretary general of the presidency.

An Associated Press investigation last month found that illegal landing strips and unauthorized airplanes have helped prospectors carry out tons of gold mined on Indigenous lands. The gold ends up in the hands of brokers, some of whom are under investigation by authorities for receiving gold from illegal mining — facilitated by a widespread lack of traceability. The gold is refined in Sao Paulo before becoming part of the global supply chain.

Rodrigues’ Choices Institute released a study last week that found 229 tons of gold with indications of illegality were sold from 2015 to 2020, or roughly half of national production — most of which originated in the Amazon. The study was based on the analysis of more than 40,000 sale records and satellite images of production sites.

Rodrigues added that the simplification of the mining regulator’s permit process could usher in a wave of new requests or clearing of the agency’s backlog of requests, causing “complete lack of control.”

One of the decrees creates a multiagency commission charged with developing policies to foment what it terms “artisanal mining,” and which it says will be sustainable.

However, most gold prospecting in the Amazon is far from artisanal, employing generators and heavy machinery for digging trenches and dredging rivers.

Beto Marubo, an Indigenous leader in the Javari Valley, a remote region of Brazil bordering Peru, said on Twitter that the decree represents “another incentive for the destruction of the rivers, the forests, the life in our communities.”


Democratic retirements spark worry over holding House majority
Alayna Treene, Oriana Gonzalez, Axios, February 15, 2022

Rep. Kathleen Rice (D-N.Y.) is the latest lawmaker to announce that she won’t seek re-election this year, bringing the total number of Democratic retirements to 30, compared with 14 Republicans.

Why it matters: The increasing number of Democratic retirements — put against the backdrop of President Biden’s sagging approval ratings and uncertainty about redistricting — is adding to concerns the party may not be able to keep its slim majority in the House.

Driving the news: Axios is tracking the House retirements as the midterm election cycle ramps up. We will update this chart regularly.

By the numbers:

Democrats: 22 Democratic House members will retire in 2022 [see chart].

Eight are seeking other offices:

  1. Anthony Brown (MD-04) — Running for Maryland attorney general
  2. Conor Lamb (PA-17) — Running for Pennsylvania U.S. Senate seat
  3. Val Demings (FL-10) — Running for Florida U.S. Senate seat
  4. Tim Ryan (OH-13) — Running for Ohio U.S. Senate seat
  5. Charlie Crist (FL-13) — Running for governor of Florida
  6. Karen Bass (CA-37) — Running for mayor of Los Angeles
  7. Peter Welch (VT) — Running for Vermont U.S. Senate seat
  8. Tom Suozzi (NY-3) — Running for New York governor

Republicans: Seven Republican House members will retire [see chart].

  • Rep. Devin Nunes (R-Calif.) retired to become CEO of former President Trump’s media company. His resignation became effective at the end of December.

Seven are seeking other offices:

  1. Lee Zeldin (NY-1) — Running for governor of New York
  2. Billy Long (MO-7) — Running for Missouri U.S. Senate seat
  3. Vicky Hartzler (MO-4) — Running for Missouri U.S. Senate seat
  4. Mo Brooks (AL-5) — Running for Alabama U.S. Senate seat
  5. Ted Budd (NC-3) — Running for North Carolina U.S. Senate seat
  6. Jody Hice (GA-10) — Running for Georgia secretary of state
  7. Louie Gohmert (TX-1) — Running for Texas attorney general


From the Washington Examiner, Daily on Energy:

ENERGY GETS GREEN HYDROGEN PROGRAMS MOVING: The Energy Department announced today it is requesting stakeholder input on three green hydrogen project items funded by the new infrastructure law: the $8 billion for Regional Clean Hydrogen Hubs, $1 billion Clean Hydrogen Electrolysis Program, and $500 million for other clean hydrogen manufacturing and recycling, all designed to enable industrial-scale production of hydrogen without greenhouse gas emissions.

Once it gets to that stage, the administration will prioritize any proposed hub able to “provide significant training and long-term job opportunities for residents of each region and drive greenhouse gas emissions down in the sector,” a senior administration official told reporters on a call yesterday previewing the announcement.

What else is being announced today: The White House also said it is has created a “Buy Clean Task Force,” which will include as members the Departments of Energy, Defense, and Transportation and the General Services Administration, to develop recommendations on how agencies and interested companies can procure low-emissions products and building materials. The task force was created in conjunction with President Joe Biden’s December executive order directing federal agencies to work to enable a 65% reduction in emissions for all federal government operations by 2030 and aim to achieve net-zero by 2050.

The White House’s Council on Environmental Quality is also issuing guidance today on how carbon capture, utilization, and storage projects developers should analyze life cycle emissions associated with their projects and what considerations such projects should have to generate the most jobs.