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Climate

What to Expect From the Looming LNG Report

On a long-awaited study, PG&E’s loan, and Germany’s snap elections

What to Expect From the Looming LNG Report
Heatmap Illustration/Getty Images

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 toThe 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 Timesexplained, 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,” reportedClean 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.

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Climate

AM Briefing: California’s Insurance Hike

On the fallout from the LA fires, Trump’s tariffs, and Tesla’s sales slump

California’s Insurance Crisis Is Heating Up
Heatmap Illustration/Getty Images

Current conditions: A record-breaking 4 feet of snow fell on the Japanese island of Hokkaido • Nearly 6.5 feet of rain has inundated northern Queensland in Australia since Saturday • Cold Arctic air will collide with warm air over central states today, creating dangerous thunderstorm conditions.

THE TOP FIVE

1. China hits back at Trump tariffs

President Trump yesterday agreed to a month-long pause on across-the-board 25% tariffs on Canada and Mexico, but went ahead with an additional 10% tariff on Chinese imports. China retaliated with new levies on U.S. products including fuel – 15% for coal and liquefied natural gas, and 10% for crude oil – starting February 10. “Chinese firms are unlikely to sign new long-term contracts with proposed U.S. projects as long as trade tensions remain high,” notedBloomberg. “This is bad news for those American exporters that need to lock in buyers before securing necessary financing to begin construction.” Trump recently ended the Biden administration’s pause on LNG export permits. A December report from the Department of Energy found that China was likely to be the largest importer of U.S. LNG through 2050, and many entities in China had already signed contracts with U.S. export projects. Trump is expected to speak with Chinese President Xi Jinping this week.

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Politics

Trump’s Little Coal Reprieve

Artificial intelligence may extend coal’s useful life, but there’s no saving it.

Donald Trump.
Heatmap Illustration/Getty Images

Appearing by video connection to the global plutocrats assembled recently at Davos, Donald Trump interrupted a rambling answer to a question about liquefied natural gas to proclaim that he had come up with a solution to the energy demand of artificial intelligence (“I think it was largely my idea, because nobody thought this was possible”), which is to build power plants near data centers to power them. And a key part of the equation should be coal. “Nothing can destroy coal — not the weather, not a bomb — nothing,” he said. “But coal is very strong as a backup. It’s a great backup to have that facility, and it wouldn’t cost much more — more money. And we have more coal than anybody.”

There is some truth there — the United States does in fact have the largest coal reserves in the world — and AI may be offering something of a lifeline to the declining industry. But with Trump now talking about coal as a “backup,” it’s a reminder that he brings up the subject much less often than he used to. Even if coal will not be phased out as an electricity source quite as quickly as many had hoped or anticipated, Trump’s first-term promise to coal country will remain a broken one.

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Trump’s Other Funding Freeze Attacks Environmental Justice

Companies, states, cities, and other entities with Energy Department contracts that had community benefit plans embedded in them have been ordered to stop all work.

Donald Trump.
Heatmap Illustration/Getty Images

Amidst the chaos surrounding President Trump’s pause on infrastructure and climate spending, another federal funding freeze is going very much under the radar, undermining energy and resilience projects across the U.S. and its territories.

Days after Trump took office, acting Energy Secretary Ingrid Kolb reportedly told DOE in a memo to suspend any work “requiring, using, or enforcing Community Benefit Plans, and requiring, using, or enforcing Justice40 requirements, conditions, or principles” in any loan or loan guarantee, any grant, any cost-sharing agreement or any “contracts, contract awards, or any other source of financial assistance.” The memo stipulated this would apply to “existing” awards, grants, contracts and other financial assistance, according to E&E News’ Hannah Northey, who first reported the document’s existence.

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