WHAT’S HAPPENING TODAY: Good afternoon readers, and Happy Thursday! In today’s edition of Daily on Energy, Callie and Maydeen take a look at an oil refinery closure in California and the surge of data center announcements.
The newsletter also covers a new investigation by the Select Subcommittee on the Coronavirus Pandemic, which alleges that one of the Department of Energy’s labs is using machinery connected to the Chinese military. Meanwhile, the Federal Energy Regulatory Commission held their monthly meeting, where Chairman Willie Phillips offered a big endorsement for nuclear energy. We move over to Germany, where officials are reportedly seeking to reduce its reliance on China by boosting the wind power industry.
We later go into details about the Department of Energy’s new loans of nearly $3 billion for sustainable aviation fuel production. Then we head back to California, where we take a look at thousands of residents who are at risk of losing power this weekend due to high wildfire risk.
Lastly, for today’s election countdown, we take a look at the presidential election’s impact on clean technology investors.
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.
PHILLIPS 66 REFINERY SET TO CLOSE DAYS AFTER NEWSOM BILL: Phillips 66 announced yesterday its plans to shut down operations at its Los Angeles oil refinery, two days after California Gov. Gavin Newsom signed into law new stringent requirements for refineries in the state.
The oil company said its plans to close the oil refinery were not directly linked to the new state legislation but instead are based on the future of the industry.
“With the long-term sustainability of our Los Angeles Refinery uncertain and affected by market dynamics, we are working with leading land development firms to evaluate the future use of our unique and strategically located properties near the Port of Los Angeles,” Mark Lashier, chairman and CEO of Phillips 66, said in a statement.
Newsom on Monday signed a bill requiring refineries to maintain a minimum amount of fuel to avoid supply shortages and prevent high oil prices. Phillips 66 said it would continue to work with the state to maintain its current supply and meet consumer needs.
Read more from Maydeen here.
DATA CENTERS SURGING: Announced data center projects more than tripled in the first half of 2024, a Thursday report from data and analytics firm Wood Mackenzie now shows.
The details: Wood Mackenzie estimated that the number of new data centers announced in the first half of 2024 totaled a capacity of nearly 24 gigawatts, more than the entire amount announced in 2023. Georgia, Texas, and Virginia are leading the charge of this growth, with Virginia still holding the title of data center hub of the United States.
Key quote: “A large load like this has never really existed in history,” Chris Seiple, vice chairman of Wood Mackenzie’s power and renewables group, told the Financial Times. “It’s clear that there is a race going on across America to secure land and interconnection to energy to be able to build as much data center capacity as possible.”
Why does this matter? The rapid growth of data center announcements illustrates the immense rise in energy demand that is straining the national electricity grid amid the artificial intelligence race. Former regulators have warned that the grid in its current state is not prepared to handle rapid demand from large data centers, particularly as traditional sources of energy like coal are being phased out. With renewables prioritized by the Biden administration failing to take over as dominating power sources, Wood Mackenzie has predicted planned coal retirements may be delayed in the coming years to help manage demand.
Read more from Callie here.
COVID SUBCOMMITTEE LAUNCHES PROBE INTO DOE: The Select Subcommittee on the Coronavirus Pandemic is now investigating the Department of Energy, claiming one of the agency’s most advanced labs is using machinery connected to the Chinese military.
The details: Chairman Brad Wenstrup, an Ohio Republican, announced the probe today, saying it was prompted by evidence that allegedly reveals the Los Alamos National Laboratory in New Mexico operates equipment “created by the Beijing Genomics Institute,” which works for the Chinese Communist Party and People’s Liberation Army. The select subcommittee has said this equipment may put American national security at risk.
Wenstrup sent a letter to Energy Secretary Jennifer Granholm on Thursday requesting all documents indicating DOE’s use of equipment manufactured by or linked to BGI as well as all communications regarding DOE’s use of equipment linked to or manufactured by companies connected to the CCP or PLA. The chairman also requested a briefing regarding the alleged equipment no later than Oct. 31.
Key quote: “If there is in fact a BGI machine at Los Alamos, the U.S. Government’s most advanced scientific institution—one that is directly involved in investigating and protecting against biosecurity threats including COVID-19—may be putting American national security at risk by using machinery linked to the CCP and PLA,” Wenstrup wrote in the letter obtained by the Washington Examiner.
KEY REGULATOR BACKS NUCLEAR: Federal Energy Regulatory Commission Chairman Willie Phillips offered a big endorsement for nuclear energy on Thursday as concerns grow that rising demand will strain the national grid.
The details: Phillips’ remarks came following FERC’s monthly commission meeting during a media briefing with reporters. He had been pressed on the recent, and separate, purchase agreements announced by Google and Amazon this week for obtaining nuclear power through small modular reactors to support AI developments and data centers.
Key quote: “I’m very optimistic and quite excited to see the interest in nuclear generation around the country,” Phillips said. “I believe that there’s great hope and optimism when it comes to small modular nuclear as well…I’m an all-of-the-above person. I’ve always said that we need to have all the tools available, available to us on the table as we address the pressing needs of load increasing demand. This is a good development.”
GERMANY’S GUST FOR WIND: German officials are reportedly seeking to boost its wind power industry, in an effort to reduce reliance on China.
The details: Germany is reportedly planning to expand a program with its state bank KfW to increase production for wind energy by 2030, according to Reuters.
Berlin is pushing a number of measures to support the industry starting early next year, including requiring all companies with access to a power generation facility to follow energy cybersecurity regulations. The measures are also reportedly looking to reduce the use of Chinese parts for turbines like permanent magnets. It is expected to cost around 16 billion euros ($17.34 billion) to successfully support increased production.
Key quote: “We must continue improving conditions to keep this industry competitive and ensure future value creation within Germany and Europe. These measures are a crucial step,” Germany’s Economy Minister Robert Habeck said.
LATEST ON ONTARIO YOUTH CLIMATE LEGAL CHALLENGE: The Ontario Court of Appeals, in Canada’s most populous province, has called for a new hearing in a challenge to the government’s emission goals that some youth say violates their rights.
Some background: A group of seven young people – aged 16 to 28 – first filed the lawsuit against the province in 2019, claiming Ontario’s targets for reducing greenhouse gas emissions violated their rights to life and equality, as well as liberty and security.
The targets, set in 2018, are to reduce emissions by 30% from 2005 levels by 2030. However, the youth challengers said these targets were not strong enough, claiming it would cause harm to young adults and future generations, according to CBC News. In fact, the plaintiffs reportedly said they had evidence that proved the government would allow for 30 megatonnes more in annual emissions by 2030.
The ruling: On Thursday, the high court ordered for a new hearing to be held in the challenge, claiming it was “not well placed” to determine if any rights had been infringed by the emission targets, CBC News reported.
ICYMI, BILLIONS TO FUEL JETS WITHOUT FOSSIL FUELS: DOE is floating nearly $3 billion worth of loans for sustainable aviation fuel production, in an effort to cut carbon emissions.
The details: Yesterday, DOE approved conditional loan guarantee commitments totaling $2.9 billion for two facilities producing fossil fuel-free jet fuel.
One of the proposed loans (worth up to $1.46 billion) is set to go to biofuels producer Gevo Net-Zero 1 for a facility in Lake Preston, South Dakota. The facility, anticipated to be the first of its kind in the U.S., plans to use 100% U.S.-sourced feedstocks to produce 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.
The second loan (worth up to $1.44 billion) is expected to go toward a Montana Renewables facility in Great Falls, Montana. The facility has been operational since 2022 and produces around 140 million gallons of biofuels every year. Montana Renewables plans to use the funding to expand that output to 315 million gallons annually, becoming the largest global producer of sustainable jet fuel.
Some background: The DOE estimates that the aviation industry is responsible for 11% of transportation emissions in the U.S., and 3.3% of national emissions overall. Sustainable jet fuel is expected to massively reduce the industry’s carbon footprint, helping reach lofty 2050 net-zero targets.
THOUSANDS OF CALIFORNIA RESIDENTS AT RISK FOR POWER OUTAGES: As much of California is under high wildfire risk, PG&E is warning that nearly 20,000 customers could face power outages starting today.
Northern and Southern California are under red flag warning due to dry weather and high winds coming from the north. High winds can help wildfires spread quickly.
In its latest advisory, PG&E warned that 24 counties could face power outages beginning today through the weekend. The power shutdowns are part of the Power Safety Shutoff program to prevent fires from being sparked by electricity.
“Given the forecasted strong northerly winds and current dry vegetation conditions, PG&E has sent advanced notifications to customers—via text, email, and automated phone call—in targeted areas where power may need to be proactively shut off for safety to reduce wildfire risk,” PG&E stated. “The duration and extent of power outages will depend on the weather in each area, and not all customers will be affected for the entire period.”
ELECTION COUNTDOWN – CLEAN TECH INVESTORS ARE CAUTIOUS: Clean technology investors are holding back as they wait and see who will be in the White House next year, with both candidates having expressed very different views on climate, Bloomberg reports.
U.S.-based climate tech startups raised $2.6 billion in the third quarter, which was a 31% decrease from the second quarter and a 39% decrease from the third quarter in 2023, according to Dealroom data.
“A lot of investors are very cautious right now,” Sophie Bakalar, partner at New York City-based Collaborative Fund told Bloomberg. “That’s one of the reasons why we’re not seeing as much capital being deployed at the moment.”
There are 18 days until Election Day.
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