What to Expect From the Looming LNG Report

Current conditions: A 7.3-magnitude earthquake caused major damage on the Pacific island of Vanuatu • Oil from damaged tankers is washing up on Russian beaches after a storm in the Black Sea • Hot, dry, and windy weather returns to parched Southern California.

THE TOP FIVE

1. What to expect from the looming LNG report

The Department of Energy’s study on liquefied natural gas exports could drop as soon as today, but we might already know what’s in it thanks to an accompanying letter written by Energy Secretary Jennifer Granholm and obtained by The New York Times. The key takeaways:

• Continued U.S. LNG exports at recent levels would have negative impacts on both the economy and the environment.
• “Unfettered exports” would drive up wholesale domestic gas prices by 30%, hurting consumers and industry alike.
• Increasing exports could generate 1.5 gigatons of direct greenhouse gas emissions a year, which is about 25% of total annual U.S. emissions.
• The pace at which we have been exporting is “neither sustainable nor advisable,” Granholm writes.
• Separately, two sources said the report will warn that increasing LNG exports could benefit China.

The study reportedly stops short of saying that more LNG shipments are not in the public’s best interest and therefore should be banned. President Biden halted new LNG export licenses in January until the DOE could complete its analysis. President-elect Trump has promised to resume export terminal approvals.

2. DOE to loan PG&E $15 billion for power upgrades

More from the DOE: The Loan Programs Office this morning announced a conditional loan commitment of up to $15 billion for Pacific Gas & Electric Company’s Project Polaris. The project “will support a portfolio of projects to expand hydropower generation and battery storage, upgrade transmission capacity through reconductoring and grid enhancing technologies, and enable virtual power plants throughout PG&E’s service area,” the DOE said. This is the largest loan in the history of the LPO, and the office plans to finalize it before the end of President Biden’s term, according to The Wall Street Journal.

DOE

3. Push for permitting reform hits a dead end

Permitting reform is officially off the table. Sens. Joe Manchin and John Barrasso had hoped some version of their bipartisan bill to help speed new energy infrastructure would be included in Congress’ must-pass final agenda items for the year, but alas, it won’t. Politico’s Joshua Siegel reported that Manchin “conceded” yesterday on the issue after tense partisan disagreements – over things like who should be able to take advantage of loosened rules, and how local environments and communities would be protected – proved too difficult to overcome. “It’s a shame that our country is losing this monumental opportunity to advance commonsense, bipartisan permitting reform,” Manchin said in a statement.

Somewhat relatedly, the DOE narrowed (from 10 down to three) its list of potential “National Interest Electric Transmission Corridors,” or regions especially in need of energy transmission upgrades. They are:

• The Lake Erie-Canada Corridor – includes parts of Lake Erie and Pennsylvania
• The Southwestern Grid Connector Corridor – includes parts of Colorado, New Mexico, and western Oklahoma
• The Tribal Energy Access Corridor – includes five Tribal Reservations, as well as parts of North Dakota, South Dakota, Nebraska

A NEITC designation would allow the government to speed up grid expansion projects in these regions and provide federal funding. “A lack of transmission infrastructure can directly contribute to higher electricity prices, more frequent power outages from extreme weather, and longer outages as the grid struggles to come back online,” the Department explained in its announcement. A comment period on the three suggested corridors will now begin and extend into the next administration.

4. SCOTUS shuts down red states’ attack on California’s clean air rules

The Supreme Court yesterday dismissed a constitutional challenge from 17 Republican-led states against California’s long standing right to make its own clean air rules. The state has had a waiver since the 1960s to set its own vehicle emission standards, so long as they meet or go beyond the national standards. And its rules have been really effective at reducing pollution from cars in the Los Angeles area. Ohio and 16 other states were petitioning the Court, arguing that California was being treated differently than other states and that “the Golden State is not a golden child.” The dismissal “closes the door on a constitutional challenge to California’s anti-pollution standards,” the Los Angeles Times explained, but other challengers – including the oil and gas industry – are exploring other legal routes.

5. Germany set for snap election

German Chancellor Olaf Scholz yesterday lost a confidence vote in parliament, triggering snap elections to be held in February. The turmoil will have ramifications for energy and climate policy in Europe’s largest economy. Sholz’s coalition government “made significant progress in key policy areas, such as renewables expansion,” reported Clean Energy Wire. It also committed Germany to emissions reductions in line with the Paris Agreement. But a new government will have other things on its mind, especially as unemployment is high, energy prices remain elevated, and struggling industry heavyweights like Volkswagen and auto parts supplier Bosch are resorting to massive layoffs. Meanwhile, a scramble is also underway in France to form a government after the previous one failed a no-confidence vote two weeks ago. “The EU as a whole is affected” by these political instabilities, reported the BBC, and everything from global climate policy to the war in Ukraine could feel the impacts.

THE KICKER

A rapid study from Imperial College London finds that human-caused climate change intensified Tropical Cyclone Chido from a Category 3 storm to a Category 4 storm. The cyclone devastated the French territory of Mayotte over the weekend.