CP2 TERMINAL SET FOR FERC VOTE: The major natural gas export terminal project that generated tremendous environmentalist pushback and led to the Biden administration’s pause on new LNG export approvals is now scheduled to be considered by the Federal Energy Regulatory Commission next week.
FERC announced yesterday it will consider the Calcasieu Pass 2 project, sited on 546 acres in Louisiana’s Cameron Parish. The project, managed by Virginia-based LNG producer Venture Global, is expected to have an export capacity of 20 million metric tons annually.
The background: In January, the Biden administration, under pressure from green groups, stated it would delay its decision on CP2, and directed the Energy Department to further analyze the project for any climate change impacts.
Shortly after, the White House announced the pause on new LNG export approvals, saying it would update the underlying analyses to account for climate change, the economy, and national security.
The fate of the project is a huge test for the White House ahead of a tough election – especially as President Joe Biden has tried to court young, environmental voters in his bid for reelection.
What environmentalists are saying: Green groups noted in response to FERC’s announced vote that the project would have lifecycle annual greenhouse gas emissions equivalent to 46 coal-fired power plants. They also said it would hurt nearby residents through pollution.
“If FERC is not prepared to reject this potentially disastrous project, it should pull down consideration of CP2 until after its newly confirmed commissioners are caught up to speed,” Sierra Club’s Beyond Dirty Fuels director Cathy Collentine said in a statement. “The world does not need, nor can communities, consumers, or the climate afford, being locked into decades of additional gas exports.”
The process: The project needs approval from FERC, which oversees the environmental review processes and ensures compliance with the National Environmental Policy Act.
But then it also needs approval from the DOE, which is required to determine whether terminals for non-FTA countries are in the “public interest.”
Remember: Two thirds of the project’s capacity is committed to Germany and Japan – which are non-FTA countries.
It’s far from guaranteed that DOE will issue a final determination before the November election. The administration hasn’t said when the pause will end, but the most recent guidance from Secretary Jennifer Granholm is that her agency aims to wrap it up by the first quarter of next year.
An important note: DOE has never rejected a proposed natural gas project because of its expected environmental impact.
Last July, FERC issued its final environmental impact statement for the project, noting that the project would result in “some adverse environmental impacts” – but that the impacts would be “less-than-significant,” and that climate change impacts are not characterized in the EIS as significant or insignificant.
Time is money: Venture Global blasted FERC in March for delaying the project for what was then eight months – and is now nearing 11 months – a setback they say is one of the longest to ever sit before the commission.
Eyes to the commission: FERC will meet next Thursday, June 27 at 10 a.m. Read the notice here.
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APPLICATIONS OPEN FOR $850M IN FUNDING FOR METHANE PROJECTS: DOE said today that it has opened applications for $850 million in funding under the Inflation Reduction Act for projects aimed at lowering methane emissions.
Three tranches of funding were announced. One is for three large awards for projects to reduce emissions from existing wells and infrastructure. A second is for 26 awards to accelerate the deployment of methane emissions reduction and solutions from equipment such as engines and compressors, flares, liquids, unloading products, produced water, and equipment leaks. The third will provide up to four grants for programs accelerating deployment and methane monitoring solutions, up to four awards for accelerating the deployment of local-scale methane monitoring solutions in disadvantaged communities, and up to five awards to form collaborative partnerships across the country to monitor methane emissions in different regions.
The announcement is the latest in a wide range of actions and rules by the administration meant to lower methane emissions. Read more from Breanne here.
A NEW CRITICISM OF A.I. ENERGY USE: A Washington Post report today highlights a new line of criticism against artificial intelligence developers that use huge amounts of energy. The argument is that, even if AI companies like Microsoft and Google say they are using clean energy for their projects, they are essentially hogging those clean resources for their own use, meaning that the grid as a whole transitions slower than it would have otherwise.
The tech companies have noted that they’ve funded clean energy projects, including wind and solar but also geothermal and nuclear, that would not have been demanded if not for the massive data centers they’re building. They argue that they are helping with the development of cutting-edge clean energy technologies.
But the Post article flags instances where AI projects have resulted in the delayed retirement of fossil fuel plants, including coal.
A key quote: “Ability to find power right now will determine the winners and losers in the AI arms race,” Aaron Zubaty, the CEO of Eolian, an energy investor. “It has left us with a map bleeding with places where the retirement of fossil plants are being delayed.”
REFINERS REPORTEDLY NERVOUS ABOUT PROVE IT ACT: A number of refiners have been contacting House Republicans to air out concerns about the PROVE IT Act, E&E News reports.
Ahead of the anticipated introduction of the House version of the bill, which would mandate a Department of Energy study of greenhouse gas emissions intensity of industrial products, some refiners are worried the imported oil they process could receive high scores, sources told the publication.
Why it’s important: Some Republicans and free-market groups oppose the legislation on the grounds that it could lead to a carbon tariff (a policy backed by some of the bill’s sponsors) or a carbon tax (which has almost no explicit support among congressional Republicans).
The lobbying by refiners shows that there is also resistance from industry players to the legislation. Notably, some major business interests, such as the American Petroleum Institute, support the measure, reasoning that it would show an advantage for U.S. fossil fuel products.
CANADA PREPARING TARIFFS ON CHINESE ELECTRIC VEHICLES: Canada is moving toward joining the U.S. and Europe in imposing new tariffs on Chinese electric vehicles, Bloomberg reports.
Officials told the publication that Prime Minister Justin Trudeau’s government is likely to start the process of a consultation on tariffs.
Why it matters: Western leaders have been moving toward protectionist measures against Chinese EVs. President Joe Biden moved to raise duties this spring, and the European Union introduced similar measures last week. The measures have been justified as necessary to counter efforts by Beijing to dominate the market by overproduction. Protecting domestic industries and workers from China has risen significantly as a priority for Treasury Secretary Janet Yellen and other key officials.
Canadian auto industry groups have pressed for tariffs so that Canada is in alignment with the U.S., Bloomberg notes.
Still, the end result is to forestall the entry of cheap Chinese vehicles into global markets, meaning that uptake of EVs will be slower. Some environmentalists, accordingly, oppose protectionist measures.
RUNDOWN
CNBC Extreme heat is turning electricity cutoffs into new political battle for power companies
Financial Times How companies are starting to back away from green targets
E&E News ‘Fearless’ and ‘witty’ Dem makes waves on Natural Resources