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G-7 DIFFERENCES ON OIL AND GAS: The Group of Seven has some major emerging differences to work out at its April meeting as some members, wrestling with the question of how widely to enable new oil and gas ventures, test the limits of the spirit and letter of previous commitments to constrain fossil fuels as they look to preserve their energy security.
Japan wants to include language in this year’s communique that’s more favorable to fossil fuel investment, including upstream investment in gas and LNG, and it’s upsetting some of its fellows who are worried the Japanese aren’t being ambitious enough on phasing out fossil fuels in the power sector, Bloomberg reported earlier this week.
Now, the Italian government has proposed a new export credit policy that walks back the country’s pledge at COP26 and last year’s meeting of G-7 countries to end new public financing of fossil fuels and related infrastructure by the end of 2022.
The reference points: Italy was one of dozens of signatories to pledge ahead of COP26 to end new direct public support of the “international unabated fossil fuel energy sector” (Each of its fellow G-7 members, with the exception of Japan, also signed).
G-7 energy and environment ministers resolved months later to end new direct public support for the international unabated fossil fuel energy sector by year’s end, “except in limited circumstances clearly defined by each country that are consistent with a 1.5 °C warming limit and the goals of the Paris Agreement.”
When G-7 heads of government met in June 2022, they committed to the same language.
What’s changed: Europe has since endured a full year’s worth of worry over whether it can acquire sufficient energy in the near and medium terms while ditching Russian gas.
Italy also has a new government, and one that is leveling challenges against various other elements of the EU’s climate change policymaking, including its green building and vehicle regulations.
Italy’s new finance approach: The government said in its new policy, announced earlier this week, that it remains firmly committed to climate objectives but said consequences of the energy crisis “may potentially require further investments in order to diversify sources of supply, in particular in relation to gas.”
The policy extends public support for oil for new exploration and production of oil through the end of the year. Gas E&P gets a longer off-ramp through 2026.
Other phases of the gas value chain “will be gradually dismissed in the light of the role that gas can play in the transition,” it said.
European leaders and the Biden administration have acknowledged that gas will be integral to the energy transition they’re overseeing, but they generally maintain a definitive preference for renewable energy, especially where public dollars (or euros) are being put up.
President Joe Biden issued an executive order during his first week in office directing agencies and the Export-Import Bank to work together to promote an end to international fossil fuel finance, and the administration in December 2021 formalized a policy to restrict unabated coal, oil, and natural gas ventures.
The administration has kept doors open to financing certain gas projects, however, especially where they aid allies in making up for reduced supplies from Russia.
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CA SENATE COMMITTEE APPROVES NEWSOM GOUGING BILL: The California Senate’s energy committee approved a dialed-back version of Gov. Gavin Newsom’s anti-price gouging bill yesterday, setting up a vote today in the chamber’s appropriations committee.
If it clears that, the bill would be taken up by the full Senate.
The bill would create an entity within the California Energy Commission to monitor oil and retail fuel markets. The watchdog would be equipped with subpoena power and could make price gouging referrals to the state attorney general.
But the bill excludes language in an earlier proposal that would have penalized refiners for earning profits above a specified maximum gross gasoline refining margin. Lawmakers debated the proposal last month, and some witnesses said the penalty approach could backfire and make refined products more scarce.
GREAT LAKES LAWMAKERS OPPOSE CANADIAN NUCLEAR WASTE SITE: A bipartisan group of more than a dozen lawmakers are backing a resolution that would formally oppose the construction of a nuclear waste site on the Canadian side of the Great Lakes basin.
The Nuclear Waste Management Organization, a non-profit entity created by the Canadian government, has drawn up plans to build a facility to permanently store more than 50,000 tons of high-level nuclear waste in South Bruce, Ontario.
Lawmakers ranging from Sen. Gary Peters to Reps. Rashida Tlaib and John James are backing the resolution. Several members said the potential for an accident involving dissemination of highly-radioactive waste into the lakes made the project too risky.
Democratic Rep. Dan Kildee of Michigan, chief sponsor of the bill, said Biden should intervene and take up the issue himself with the Canadians. Biden travels to Canada today.
Elsewhere in nuclear waste world: Idaho National Laboratory announced yesterday that it has successfully transferred all Experimental Breeder Reactor-II spent nuclear fuel from wet storage to dry, a more permanent storage solution for radioactive waste.
EBR-II was a sodium-cooled fast reactor that operated from 1964 to 1994, generating power for the lab and supporting reactor research and development projects.
INL and DOE, along with Idaho and the U.S. Navy, entered a settlement agreement in 1995 arranging for disposal of the spent fuel used in the reactor.
INL said the disposal project also led to the recovery of uranium products from the volume of waste that could be used for high-assay low-enriched uranium, the fuel required to power advanced nuclear reactor designs.
FORD SEES $3B LOSS ON ELECTRIC VEHICLES THIS YEAR: Ford expects a pretax loss of roughly $3 billion on its EV business this year, it said today, as it seeks to provide more transparency into the finances of its three business units.
Ford’s announcement is part of a new financial reporting format in which it breaks out results by traditional ICE vehicles, commercial vehicles, and Model e EVs.
Ford projects Model e’s cumulative three-year loss from 2021 to 2023 will total about $6 billion.
Ford finance chief John Lawler compared the EV division to a startup – “startups lose money as they invest in capability, develop knowledge, build volume and gain share,” he said during a media briefing.
He said he is confident the company will achieve its target of 8% operating profits (or 10% adjusted for earnings before interest and taxes) by late 2026.
OFFSHORE WIND BUILDOUT THREATENED BY WHALE AND DOLPHIN DEATHS: Lawmakers called for a pause on offshore wind power construction yesterday after eight dolphins washed up and died in a “mass stranding event” in Sea Isle City, New Jersey.
“We are not even in the construction stage of these industrial wind turbine grids, yet we are already witnessing a highly unusual mortality rate of these intelligent marine animals,” Rep. Jeff Van Drew said in a statement. He noted that the siting and pre-construction activities off the state’s coast are being conducted “right in the middle” of feeding and breeding grounds, as well as migration routes, for marine mammals such as whales and dolphins.
Rep. Chris Smith told Breanne that the offshore wind project represents a “potentially catastrophic threat” to the coast.
The deaths bring to 23 the number of dolphin and porpoise strandings in 2023.
And it’s part of an alarming trend: Since early December, 29 whales have washed ashore along the East Coast, including humpback whales and the endangered North Atlantic right whale.
At a field hearing in South Jersey earlier this month, officials from the nonprofit group Clean Ocean Action noted an unusual trend: Beginning in December, large commerce shipping in the area decreased by 20%, making it unlikely that shipping traffic alone was responsible for the increase in deaths.
And beginning in December, at least six survey vessels “within close proximity” of each other in the Atlantic and in Cape May were conducting sonar and other geotechnical activities – which “could have had cumulative effects” due to the multiple sonar activities, Clean Ocean Action director Cindy Zipf said.
OHIO TRAIN DERAILMENT HIGHLIGHTS NEED FOR SAFETY IMPROVEMENTS, BUTTIGIEG SAYS: Department of Transportation Secretary Pete Buttigieg played up DOT’s new actions and investments to increase federal rail safety today, telling members of the Senate Appropriations Committee that the department is seeking $273 million in new funding in its FY2024 effort to support the Federal Railroad Administration, expand inspection capabilities, and increase stakeholder engagement to address risks.
Speaking to members of the Senate Transportation, Housing and Urban Development Subcommittee, Buttigieg said DOT has made nearly $18 billion in funds available to improve rail service and safety, and advanced more than 70 critical rail projects nationwide, he said. “Derailments may be down compared to prior decades, but we’re still seeing far too many,” Buttigieg said, according to a copy of his prepared remarks.
DOT, and Buttigieg, have come under intense scrutiny for what critics say was a late and insufficient response to the East Palestine derailment.
Buttigieg said today that while derailments are down compared to previous decades, the East Palestine disaster made clear that the status quo for rail safety is “clearly not acceptable.”
Meanwhile, the chairman of the subcommittee, Sen. Brian Schatz, pressed Buttigieg over safeguards for wayside detecting devices, which are installed along tracks and play a crucial role in detecting potential incidents before they occur.
Historically, these devices have not been regulated at the federal level, Buttigieg said, though he said DOT is interested in working with Congress to help create more regulations and standards for these devices.
COLD SNAP THREATENING EUROPEAN GAS STORAGE: Northern Europe is bracing for a cold snap next week, threatening to drive up its demand for natural gas and risk depleting some of its stored gas—which leaders worked for months to save — in the last seven days of its winter heating season.
A very cold Arctic mass is expected to descend upon the northern part of the continent, forecasters said, sending temperatures plunging far below seasonal norms for this time of year. The cold front could send temperatures in some areas as low as 5.3 degrees celsius below their typical averages.
It’s also an abrupt shift from the EU’s winter so far, which saw record-high temperatures that allowed the bloc to consume around 30% less gas compared to previous years, Breanne reported.
In Spain’s northern Basque region, residents spent the start of the new year sunbathing and enjoying the 77-degree weather —roughly 27 degrees higher than January averages. In Austria, some ski towns didn’t see snow for an entire month. Switzerland put out a pollen advisory warning allergy sufferers about early-blooming plants and flowers, and others converted ski slopes to mountain biking lanes due to the lack of snow.
The Rundown
Recharge Enforced wind farms, shut-down oil fields and meat rationing: Shell’s drastic road to net-zero
Bloomberg Bankers bury ‘ESG’ in pitch books to head off Republican attacks
Euractiv France looking to liberal Netherlands in push for nuclear revival
Calendar
THURSDAY | MARCH 23
10:00 a.m. Dirksen 366. The Senate Energy and Natural Resources Committee will convene for a hearing to examine cybersecurity vulnerabilities to U.S. energy infrastructure.
