HAPPY FRIDAY AFTERNOON! Good afternoon, readers, we made it to the end of the week! As you may have noticed last week, each Friday we’ll be looking at key conversations or remarks we’ve been following throughout the week and highlight one quote you might have missed in the daily shuffle. Let us know if you’d like to see this on a daily basis!
In today’s edition of the Daily on Energy, we’ll be diving into different areas of the oil and gas industry and the electrical grid, as the Biden administration has announced several investments for renewable energy. Our election countdown takes a look at another climate measure on the ballot this November in California, which would issue billions in bonds for environmental and water projects. Keep reading to find out who – if anyone – is opposed to the measure.
Wrapping up the week, Maydeen took a deep dive into the EPA’s finalized rule to replace all lead service lines nationwide within the next 10 years. While the rule has been celebrated by many, some water associations now warn that Americans could face the brunt of the cost.
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.
QUOTE OF THE WEEK: During a podcast with the Electric Power Supply Association released Tuesday, Derrick Kualapai from the United Association of Journeymen and Apprentices for the Plumbing and Pipe Fitting Industry of the United States and Canada detailed what grid reliability actually looks like for American families.
“What does [reliability] look like for your average American that comes home from work and they want to flip the light switch? They want to know that that’s going to turn on, and it’s going to turn on every time,” Kualapai said. “And then once it does turn on and as we sort of take a look at this trend of phasing out fossil fuels, what does that space look like? At the end of the day, the answer is, the challenge is reliability. We’ve got to have reliability, and so I think – I think we have our work cut out for us.”
OIL PRICES ARE DOWN: Oil prices tumbled as China’s economic growth slowed and uncertainty revolved around the conflict in the Middle East, Reuters reports. International benchmark Brent oil futures fell by $1.39, or 1.87%, to $73.06 a barrel. West Texas Intermediate crude declined by $1.45 or 2.05%, to $69.22 a barrel.
Brent and WTI’s falling prices marked the biggest weekly decline since the International Energy Agency in September cut its forecast for global oil demand in 2024 and 2025. China, the top oil importer, saw refinery output decline for a sixth month in a row. Meanwhile, following the death of Hamas leader Yahya Sinwar, hope increased that there could be an end to the escalating war in the Middle East. Oil prices also dipped earlier this week as Israeli officials told the U.S. it would not strike Iran’s nuclear or oil sites for retaliation.
OIL AND GAS GROUP PREPARES FOR TRUMP WIN: If re-elected to office, former President Donald Trump has vowed to do away with many landmark climate change measures implemented by the Biden administration. With the November election just weeks away, at least one oil and gas industry group is reportedly preparing to make good on that promise.
The details: The American Exploration and Production Council (AXPC) has drafted plans to reverse more than half a dozen climate rules put in place by President Joe Biden, according to internal documents reviewed by the Washington Post. The group is reportedly still developing the plan to reverse the measures, and said it plans to pursue it no matter who is elected.
Among targeted measures is a tax on methane emissions detailed in a rule issued by the Environmental Protection Agency. The rule places a fine on oil and gas facilities for wasteful methane emissions, starting at $900 per metric ton this year.
The plans reportedly detail how AXPC would pursue changing the climate rules under a Democratic or Republican White House. It also outlines more than $500,000 in spending for Republican Senate campaigns, in a bid to get GOP control of the chamber, according to the Washington Post. The plans reportedly envision rewriting the Biden rules or completely replacing them with orders that boost fossil fuel production as well as support liquified natural gas exports.
Mixed support: AXPC is made up of around 30 oil and gas producers, and not all members are in favor of the climate rule reversing roadmap. Officials with ExxonMobil told the Washington Post that the company aligned with AXPC on many issues, “but there are some issues where we are not.”
“We think there needs to be an accountability mechanism within the regulations,” ExxonMobil senior vice president Bart Cahir said of the methane tax.
Some energy experts who received the drafted plans told the outlet many of the rule reversals would contradict climate pledges made by AXPC members who have publicly backed the Paris agreement.
TEXAS PIPELINE BOOSTING U.S. GAS OUTPUT: In West Texas last month, the Matterhorn Express pipeline began pumping natural gas from the Permian Basin to the Gulf Coast for export. Now, top energy executives are saying the pipeline is easing pressure on prices, clearing up bottlenecks and boosting U.S. production, according to Reuters.
The details: This year, producers in the Permian Basin saw much of the gas produced trapped in the basin, reportedly forcing companies to pay for it to be taken away. With the Matterhorn Express now moving gas, producers are seeing relief from those pressures.
Key quote: “Matterhorn has freed up space, and the price we are getting for gas now has been positive for almost a month,” Mike Oestmann, CEO of Midland producer Tall City Exploration told Reuters. “We produced a lot of gas that we not only didn’t get paid for, we paid for it to be taken away.”
Some background: The Matterhorn Express Pipeline stretches around 580 miles long, and is the first natural gas line to be built in the Permian basin within the last three years. It began moving small amounts of gas in September. The pipeline reportedly has a capacity to move 2.5 billion cubic feet of gas per day.
BIDEN’S BID TO AVOID BLACKOUTS: The Biden administration announced nearly $2 billion in funding on Friday to expand and protect the United States’s electrical grid, which is facing growing threats of blackouts and failure due to extreme weather and rising demand.
The details: The funding, enacted through the 2021 Bipartisan Infrastructure Law, is set to go toward 38 projects across 42 states intended to strengthen the grid and increase its capacity as electrification, manufacturing, and data centers have caused energy demand to soar. Managed by the Department of Energy’s Grid Resilience and Innovation Partnerships, also known as the GRIP program, the investments are expected to upgrade more than 950 miles of integral transmission lines, increase capacity by over 7.5 gigawatts, and support almost 6,000 jobs.
Six of the projects selected are set to use the funding for boosting and restoring grid infrastructure in the southeastern regions of the country devastated by Hurricane Milton and Hurricane Helene within the last month.
Some background: While the administration has touted the investments, Energy Secretary Jennifer Granholm told reporters that demand for additional investment is outpacing available funding. This comes as concerns continue to grow over the grid’s stability and reliability. With AI data centers and electrification causing energy demand to soar, and coal phasing out faster than renewables can produce, Granholm said there is a “tremendous need” for more investment in the grid.
Read more from Callie here.
NEW GEOTHERMAL ENERGY DEVELOPMENTS: The Department of Interior announced yesterday that the Bureau of Land Management approved the Fervo Cape Geothermal Power Project in Beaver County, Utah. The project will cover about 631 acres, including 148 acres on public land and generate up to 2 gigawatts of power that can help power over 2 million homes, the agency said.
BLM is also proposing a new categorical exclusion that would apply to geothermal energy resource operations of up to 20 acres. The categorical exclusion would help to accelerate and confirm new geothermal resources, which would cover drilling, temperature gradient wells and resource wells.
Under the National Environmental Protection Act, projects must undergo an environmental assessment (EA) or an environmental impact statement (EIS). However, the proposal’s categorical exclusion would exclude EAs or EISs for operations confirming geothermal energy resources.
Geothermal energy extracts thermal energy from the Earth’s core to create renewable clean energy. The Biden administration has approved 42 renewable energy projects on public lands and of those projects, 14 are geothermal developments.
THOUSANDS OF MAINERS OVERBILLED FOR ELECTRICITY: This week, Maine utility regulators approved a settlement ordering energy provider Electricity Maine to refund around $6 million to thousands of existing and former customers who had been overcharged.
Some background: In February 2023, Electricity Maine was accused of overbilling customers for electricity after the state’s Office of the Public Advocate said it received over 125 complaints over the span of four months, according to the Portland Press Herald. The office claimed Electricity Maine overcharged its customers by “millions of dollars” than what they would have paid if the company had set its rates at the standard offer set by the Public Utilities Commission. With the standard offer set at 10.6 cents per kilowatt-hour, Electricity Maine reportedly set its rates as high as 40 cents.
The details: In a unanimous vote Wednesday, the PUC approved the settlement, paving the way for around 20,000 customers to receive a payment of around $300 from the large settlement. Electricity Maine has also been ordered to pay a $315,000 penalty as part of the settlement. Until June 2026, the electricity provider will also see its rates capped at just 6 cents higher than the standard offer.
EPA’S LEAD PIPE RULE COULD COST CONSUMERS MORE, WATER GROUPS WARN: Association of Metropolitan Water Agencies chief policy officer Dan Hartnett told the Washington Examiner that the EPA’s final lead and copper rule could be an “expensive endeavor.”
The EPA last week finalized a rule aimed at replacing all lead service lines in the next 10 years. The agency estimated that there are nearly 9 million homes with lead pipes. The rule is intended to prevent public health crises, as the administration has linked lead exposure to major problems, up to premature death.
The EPA estimated it would cost between $1.47 billion and $1.95 billion per year to implement the rule. However, the American Water Works Association estimated that the cost to replace all lead service lines in the country could be more than $90 billion.
Hartnett said the gap between AWWA’s estimated cost and the EPA’s will have to be “filled by ratepayers if more federal money doesn’t come through.”
Read more from Maydeen here.
ELECTION COUNTDOWN: On this year’s ballot, California residents will vote on Proposition 4 – the Parks, Environment, Energy, and Water Bond Measure.
Prop 4 would require the state to issue $10 billion in bonds for a range of environmental, energy and water projects. Specifically, the bonds would fund projects such as river and lake restorations, heatwave and disaster shelters, wind turbine development, and many others.
The measure would require 40% of the money to go to lower-income towns affected by environmental disasters. The Natural Resources Agency would also be required to publicly list its programs and projects on the agency’s website.
In support: Prop 4 has received endorsements from the California Fire Chiefs Association, American Lung Association, California Council of Land Trusts, Los Angeles County Federation of Labor and many more.
In opposition: There’s not many who have expressed opposition to the measure but California Sen. Brian Jones said the measure’s bond will come with long-term financial burdens and the state does not need additional debt.
“Imagine using your credit card to buy something, knowing that by the time you finish paying off the debt, you’ll have spent nearly double the original price due to interest. It’s a poor financial decision most of us would avoid,” Jones wrote in CalMatters.
The Howard Jarvis Taxpayers Association, the California Republican Party, and Assemblymember Jim Patterson have expressed opposition to the measure.
RUNDOWN
New York Times Our Boundless Love for Big Sur May Be Killing It
Reuters COP16: From forests to oceans, nature in a dire state
Financial Times How US fossil fuel companies could be left holding an unexpectedly large bill