WHAT’S HAPPENING TODAY: Good afternoon and Happy Thursday, readers. Callie and Maydeen spent the morning attending the second day of the Deploy24 conference here in Washington, D.C. We kick things off today by recapping a key conversation we had with clean fuel industry players in attendance.
As OPEC+ has again delayed plans to increase oil output, we also take a look at a new study that suggests domestic energy demand will rise by 15% within the next five years. You may not be surprised to find out what exactly is driving this jump in demand. Keep reading to learn more.
Welcome to Daily on Energy, written by Washington Examiner energy and environment writers Callie Patteson (@CalliePatteson) and Maydeen Merino (@MaydeenMerino). Email cpatteson@washingtonexaminer dot com or mmerino@washingtonexaminer dot com for tips, suggestions, calendar items, and anything else. If a friend sent this to you and you’d like to sign up, click here. If signing up doesn’t work, shoot us an email, and we’ll add you to our list.
DEPLOY24 – A DISCUSSION ON SUSTAINABLE AVIATION FUEL: Department of Energy officials, industry leaders, academics, former government officials, and more gathered today at the Washington Convention Center in Washington, D.C., for the second day of Deploy24, the second annual conference hosted by DOE on the nation’s domestic energy transformation.
Amid panel discussions, speeches, and detailed presentations, Callie and Maydeen sat down with executives from renewable fuels producer Gevo to discuss extending clean fuel tax credits and support in the next Congress.
The details: CEO Pat Gruber and Chief Customer, Marketing and Brand Officer Andy Shafer revealed they are seeking a 10-year extension for the 45Z tax credit for sustainable aviation fuel (SAF) which is set to expire in 2027. The tax credit goes towards the production and sale of low-emission fuels, starting at 35 cents per gallon for SAF and going as high as $1.75. The executives explained this helps Gevo finance their plants and ensure they can be completely paid off. Once the plant is completely paid for, Gruber said the fuel is on a level playing field economically with petroleum, offering a clean alternative.
As the construction and operation of these SAF facilities create hundreds of construction and long-term jobs as well as support local farmers and rural economies, the executives are confident there is strong bipartisan support for future development. “It gets support from both sides of the aisle,” Shafer said, with the two explaining that even conservative lawmakers they have spoken to that previously held negative positions on the issue were more understanding of why the subsidies and federal loans are beneficial.
Many clean tax credits and future green loans are under threat from the incoming Trump administration, which has vowed to prioritize securing domestic energy. However, SAF production fits into that agenda, according to Frank Maisano, a senior principal at energy law firm Bracewell. Maisano told Callie and Maydeen that if a project checks off boxes like creating jobs, supports rural economic development, boosts clean infrastructure, and fits into a smart energy transition, the administration “will lean with it.”
Some background: In October, DOE’s Loan Programs Office announced it would be providing Gevo with conditional commitment for a loan guarantee of $1.46 billion for a net-zero project in South Dakota. The loan is expected to go towards funding a first-of-its-kind facility to produce SAF. Specifically, the plant is projected to manufacture 60 million gallons of sustainable jet fuel, 1.3 billion lbs of animal feed products, and 30 million lbs of corn oil every year. DOE has said the plant would be the first in the country to convert cornstarch into sustainable aviation fuel using carbon capture and renewable energy.
OPEC+ TO DELAY OIL OUTPUT HIKE…AGAIN: OPEC+ is set to again push back its planned increase in oil output, in an effort to support the market next year.
The details: OPEC+ confirmed the plans during an online meeting on Thursday, announcing that the gradual easing of output cuts would begin in April 2025. The group had planned to ease current reductions in January, increasing production by 180,000 barrels a day. Additionally, the oil producing bloc agreed to have production cuts fully recovered by September 2026. While these deadlines have been set, OPEC+ said the anticipated increase in production could continue to be paused or reversed based on market conditions.
Some background: The decision comes as market concerns have grown surrounding a decrease in global demand paired with expected increased output outside of OPEC+, including from the U.S. On Wednesday, a survey released by law firm Haynes Boone estimated that the incoming Trump administration would continue to depress oil prices amid an anticipated increase in production. Specifically, the bank analysts claimed prices would fall to $58.62 by 2027.
The response: As of Thursday morning, prices had jumped slightly on the news of the extended cuts. International benchmark Brent Crude increased by 0.48% to $72.64, while West Texas Intermediate rose by 0.47% to $68.86.
Read more from Callie here.
U.S. ENERGY DEMAND TO INCREASE 15% IN THE NEXT 5 YEARS DUE TO AI AND MANUFACTURING: In a new report, “Strategic Industries Surging: Driving U.S. Power Demand,” Grid Strategies anticipates U.S. electricity demand will increase five times faster than previously estimated over the next five years, with the main drivers being the rise of data centers and manufacturing.
The report projects that the U.S. electricity load in 2029 will hit 947 gigawatts, representing 15% growth in demand in just five years. Potential load growth has increased five times over the last two years. Strategic industries like semiconductor chip manufacturing, artificial intelligence, and battery manufacturing are driving this growth.
“It is worrisome that strategic industries, such as the development of an American advanced manufacturing sector or AI leadership, may face headwinds from the limited ability of the nation’s electricity systems to respond. Electricity systems need to supply new generation, connect that generation to load, and – of course – connect new load to the system,” the report said.
It added, “There are real risks to America’s economic, technological, and geopolitical leadership if the grid can’t keep up with demand.” The report added that large-scale transmission investments are needed to meet demand but policy changes like permitting reform would be required.
Read more by Maydeen here.
META BUYS SOLAR POWER FROM INVENERGY: Facebook owner Meta announced it would contract with Chicago-based energy developer and operator Invenergy for 760 megawatts of clean energy to help the company meet energy needs and reach renewable energy goals.
“Energy demand is soaring—and Invenergy is excited to work with Meta to deliver long-term, clean energy solutions to support their operations,” Ted Romaine, Invenergy’s executive vice president of origination, said in a press release.
“As the largest privately held clean energy owner, operator and developer, we’re pleased that Invenergy’s utility-scale solar projects can contribute to meeting Meta’s clean energy goals, while also providing good-paying jobs and generating millions in local economic benefits,” Romaine added.
Meta signed a contract with four Invenergy solar energy facilities in Ohio, Texas, Arizona, and New Mexico.
Urvi Parekh, Meta’s Head of Global Energy, said the “projects will help us continue our commitment to support all of our operations with 100% clean energy.”
Tech companies have been seeking investments into emission-free energy to help power their artificial intelligence development and data centers.
Meta earlier this week announced it is requesting proposals to identify nuclear energy developers to help harness nuclear energy for AI development. The company has announced previous deals with renewable energy companies. For example in August, Meta purchased geothermal power from Sage Geosystems to help power its data centers.
ELON MUSK SAYS TO SCRAP ALL INFLATION REDUCTION ACT CREDITS: Elon Musk said all IRA tax credits should be scrapped, E&E News reporter Andres Picon tweeted.
When asked whether the law’s electric vehicle tax credits should be eliminated, he answered “I think we get rid of all credits.”
Musk and former presidential candidate Vivek Ramaswamy have been tapped to co-lead President-elect Donald Trump’s Department of Government Efficiency (DOGE). Both of them were on Capitol Hill today meeting with DOGE caucus lawmakers.
Musk has previously called for eliminating EV subsidies under the IRA. Republicans are anticipated to debate and repeal some of President Joe Biden’s IRA subsidies that are meant to boost the renewable energy sector. But many Republicans have indicated that certain of the credits should be kept in place.
CLIMATE AND RISING INSURANCE PREMIUMS, WHAT’S THE CONNECTION? Climate change may lead to higher insurance costs for Americans depending on where they live, new research suggests.
The details: A study on mortgage payment data reviewed by The Guardian reveals that the top fifth counties for climate-driven disaster risk across the U.S. saw their home premiums jump by around 22% from 2020 to 2023. This appears to point to an overarching overlap in disaster-risk prone regions and those at most risk for seeing premium increases.
The researchers reportedly estimated that heightened disaster risk from extreme weather can result in premium increases equivalent to $500.
Researchers also pointed to recent insurance claims submitted as a result of the impacts of the 2024 Atlantic Hurricane season The study claims that Florida-based Citizens Property Insurance Corporation has denied nearly 30% of claims filed related to Hurricane Helene, and around 6% of claims from Hurricane Milton. At the same time, the insurer is reportedly looking to raise premiums by 14%. Citizens has defended its rates, telling the outlet, “the system is sustainable.”
“The cost of living in harm’s way has gone up disproportionately,” study co-author and economist Ben Keys told The Guardian. “We are seeing the first broad-based direct cost of climate change for homeowners because of these insurance increases.”
Important to remember: While heightened disaster risk can result in premium increases, changes in the weather and atmosphere can not be entirely to blame. For example, a failure by state regulators to protect rates in light of increasing natural disasters opens the door for premiums to rise. Though, others, including the Congressional Budget Office, have argued suppression of rates may cause insurance providers to leave high-risk regions, making it more difficult for consumers to obtain affordable insurance.
Some states have been successful in passing legislation to ensure affordable rates for those impacted by extreme weather, including Georgia. In April the state passed a bill providing premium discounts or rate reductions for property owners who construct new buildings to better withstand severe weather, such as hurricanes.
STARMER EASES UP ON CLIMATE TARGETS: Prime Minister Keir Starmer has reportedly watered down one of his green energy goals for the United Kingdom in an apparent effort to boost more confidence in his office.
The details: Starmer unveiled a “plan for change” on Thursday, detailing plans for the UK to reach 95% clean energy by 2030, according to the Financial Times. This slightly walks back a previous promise by UK officials to hit 100% clean power by the same year.
The prime minister also reportedly said the government would “deliver the highest sustained growth in the G7.” While Starmer previously promised to deliver this by the end of parliament, he failed to provide any timeframe in the updated target.
While these appeared to signal an easing up on short-term climate goals for the country, Starmer insisted that the Labour party’s mission for green energy “hasn’t changed since the day we launched it two years ago.”
The tweaked goals come as the prime minister has seen his poll ratings continuously drop since his party won the July 4 general election.
RUNDOWN:
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