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Sparks

Biden: Look at These Pretty Wind Turbines (Also, We’re Expanding Oil Drilling)

No one is pleased.

President Biden.
Heatmap Illustration/Getty Images

An announcement Friday by the Biden administration to extend the nation’s offshore oil leasing program perfectly encapsulates the Catch-22 the president finds himself in over his climate goals. The press release brazenly advertises the drilling expansion plan as “Reflecting America’s Rapid and Accelerating Shift to Clean Energy,” all while reading like someone trying to convince you that they’ve got a gun to their head.

This plan was a long time coming. The Interior Department is responsible for establishing a five-year leasing schedule under the Outer Continental Shelf Lands Act that will “best” meet the United States' energy needs, and the previous plan is about to expire. Lease sale 261, which was supposed to be held on Wednesday but has been delayed until later this fall, is the last one on the agenda.

The agency could, in theory, issue a schedule with zero lease sales over the next five years. But due to provisions added into the Inflation Reduction Act by West Virginia Senator Joe Manchin, such inaction would prevent the government from being able to open up more of the nation’s coast to offshore wind development. Before the Interior Department can put up any offshore acreage for wind, it has to have put up at least 60 million acres for oil in the previous year, the law says.

So instead of calling it an offshore oil lease plan, the agency is describing it as an offshore wind-enablement plan. The IRA’s handcuffs were referenced roughly four times in the press release, including in the first sentence, which reads, “Consistent with the requirements of the Inflation Reduction Act …” The plan to hold three oil and gas sales in 2025, 2027, and 2029 is the “minimum number” the department could schedule in order to continue the expansion of offshore wind, it said, and “the fewest … in history.” The subheading of the page even calls it a plan that “phases down oil and gas leasing in the Gulf of Mexico,” and the image paired with the announcement on social media featured wind turbines.

There’s nothing factually wrong about any of this. The final plan calls for significantly fewer sales than the 47 initially proposed in 2018 by the Trump administration, and a marked reduction from the 11 proposed by Biden last summer. The plan also restricts drilling to areas in the Gulf of Mexico that are already under development, rather than opening up new areas in Alaska or the Atlantic, as Trump wanted to do. But it does put the U.S. on a path to increased oil production, and at least one analysis asserts that the administration doesn’t even need to hold any more wind lease sales to achieve Biden’s clean energy goals.

It’s unclear who the apologetic tone or desperate image of wind turbines was for. By all accounts, the announcement was a letdown to all sides.

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Sparks

The Country’s Largest Power Markets Are Getting More Gas

Three companies are joining forces to add at least a gigawatt of new generation by 2029. The question is whether they can actually do it.

Natural gas pipelines.
Heatmap Illustration/Getty Images

Two of the biggest electricity markets in the country — the 13-state PJM Interconnection, which spans the Mid-Atlantic and the Midwest, and ERCOT, which covers nearly all of Texas — want more natural gas. Both are projecting immense increases in electricity demand thanks to data centers and electrification. And both have had bouts of market weirdness and dysfunction, with ERCOT experiencing spiky prices and even blackouts during extreme weather and PJM making enormous payouts largely to gas and coal operators to lock in their “capacity,” i.e. their ability to provide power when most needed.

Now a trio of companies, including the independent power producer NRG, the turbine manufacturer GE Vernova, and a subsidiary of the construction firm Kiewit Corporation, are teaming up with a plan to bring gas-powered plants to PJM and ERCOT, the companies announced today.

The three companies said that the new joint venture “will work to advance four projects totaling over 5 gigawatts” of natural gas combined cycle plants to the two power markets, with over a gigawatt coming by 2029. The companies said that they could eventually build 10 to 15 gigawatts “and expand to other areas across the U.S.”

So far, PJM and Texas’ call for new gas has been more widely heard than answered. The power producer Calpine said last year that it would look into developing more gas in PJM, but actual investment announcements have been scarce, although at least one gas plant scheduled to close has said it would stay open.

So far, across the country, planned new additions to the grid are still overwhelmingly solar and battery storage, according to the Energy Information Administration, whose data shows some 63 gigawatts of planned capacity scheduled to be added this year, with more than half being solar and over 80% being storage.

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Sparks

An Emergency Trump-Coded Appeal to Save the Hydrogen Tax Credit

Featuring China, fossil fuels, and data centers.

The Capitol.
Heatmap Illustration/Getty Images

As Republicans in Congress go hunting for ways to slash spending to carry out President Trump’s agenda, more than 100 energy businesses, trade groups, and advocacy organizations sent a letter to key House and Senate leaders on Tuesday requesting that one particular line item be spared: the hydrogen tax credit.

The tax credit “will serve as a catalyst to propel the United States to global energy dominance,” the letter argues, “while advancing American competitiveness in energy technologies that our adversaries are actively pursuing.” The Fuel Cell and Hydrogen Energy Association organized the letter, which features signatures from the American Petroleum Institute, the U.S. Chamber of Commerce, the Clean Energy Buyers Association, and numerous hydrogen, industrial gas, and chemical companies, among many others. Three out of the seven regional clean hydrogen hubs — the Mid-Atlantic, Heartland, and Pacific Northwest hubs — are also listed.

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Sparks

Why Your Car Insurance Bill Is Making Renewables More Expensive

Core inflation is up, meaning that interest rates are unlikely to go down anytime soon.

Wind turbines being built.
Heatmap Illustration/Getty Images

The Fed on Wednesday issued a report showing substantial increases in the price of eggs, used cars, and auto insurance — data that could spell bad news for the renewables economy.

Though some of those factors had already been widely reported on, the overall rise in prices exceeded analysts’ expectations. With overall inflation still elevated — reaching an annual rate of 3%, while “core” inflation, stripping out food and energy, rose to 3.3%, after an unexpectedly sharp 0.4% jump in January alone — any prospect of substantial interest rate cuts from the Federal Reserve has dwindled even further.

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