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Energy

Biden’s Mad War On Natural Gas Will Not End Well For Americans

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From the Daily Caller News Foundation

By DAVID BLACKMON

 

Even as the Biden administration’s regulatory agencies are moving to render the building of new natural gas power plants too costly to justify, a consensus has formed in the analyst community that the added power demands from AI will require a big expansion of natural gas generation to ensure grid stability.

Over a span of less than 20 days in April and May, Biden regulators at the Environmental Protection Agency(EPA) and the Federal Energy Regulatory Commission(FERC) published new regulations that, according to grid expert Robert Bryce, add more than 1 million words targeting natural gas to the federal register.

On April 25, the EPA finalized new power plant emission rules that will essentially force the retirement of America’s remaining coal-fired power plants by 2030 by rendering them too costly to continue operating. Most media reports focused on that aspect of the new regulations, which had been anticipated.

Reporters gave less attention to the fact that the new rules also constitute a clear effort to make it nearly impossible to finance and operate additional gas-fired power plants over the same time. The requirement that new gas plants be accompanied by costly carbon capture and storage (CCS) capability adds millions in additional costs and would also consume as much as 30% of the power generated by the plants, greatly diminishing their profitability. The fact that some operators have already tried and failed to add CCS to at least five such plants in the United States leads to an almost inevitable conclusion that this rule is intentionally structured to shut down the natural gas power industry in this country.

On May 13, the FERC rules added hundreds of thousands of more words targeting natural gas with its Order 1920. Where the EPA rules make it vastly more expensive to build and operate natural gas power plants, FERC Order 1920 makes it more costly and difficult to permit transmission lines needed to carry their electricity to market. FERC does this by discriminating between generation sources, streamlining and incentivizing permitting for power lines that are connected to wind and solar projects.

It is a regulatory pincer move designed to force generation companies to invest in wind and solar to the exclusion of natural gas generation, one that Bryce says “will strangle AI in the crib.” Rapidly expanding power loads will require a generation source that is reliable 24 hours, seven days each week, one that can be rapidly dispatched to meet demand surges that take place every day. Only natural gas can reliably fill that breach.

A series of recently published analytical studies support Bryce’s case. A Goldman Sachs analysis published in mid-May estimates that natural gas is the most fit generation tech to meet about 60% of the incremental demand load by 2030. Tudor Pickering & Holt estimates that meeting the new demand could require the building of as much as 8.5 bcf/day of new natural gas generation capacity over the same time frame.

Bryce quotes from a Morningstar report that pegs the additional gas demand at 7 to 10 bcf/day. He also refers to an Enverus study that concludes that power demand from AI and other data centers will double by 2035, requiring an additional 4.2 bcf/day of new natural gas generation by that time for their needs alone.

“This type of need demonstrates that the emphasis on renewables as the only source of power is fatally flawed in terms of meeting the real demands of the market,” Richard Kinder, executive chairman of pipeline operator Kinder Morgan, told analysts during the company’s first-quarter earnings in April, as reported by CNBC.

Seldom do we see a consensus so broad and diverse as this emerge on any topic in the energy space, yet the Biden regulators at EPA, FERC and other relevant agencies appear to be impervious to having their green energy fantasies interrupted by such pesky realty. They have one goal, which is to finalize as many new regulations negatively impacting the coal and oil and gas industries as possible before time runs out on the administration’s first term.

In that mad rush to consolidate authoritarian control, any and all inconvenient facts are to be ignored. This will not end well.

David Blackmon is an energy writer and consultant based in Texas. He spent 40 years in the oil and gas business, where he specialized in public policy and communications.

Business

Two major banks leave UN Net Zero Banking Alliance in two weeks

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From The Center Square

Under Texas law, financial institutions that boycott the oil and natural gas industry are prohibited from entering into contracts with state governmental entities. State law also requires state entities to divest from financial companies that boycott the oil and natural gas industry by implementing ESG policies.

Not soon after the general election, and within two weeks of each other, two major financial institutions have left a United Nations Net Zero Banking Alliance (NZBA).

This is after they joined three years ago, pledging to require environmental social governance standards (ESG) across their platforms, products and systems.

According to the “bank-led and UN-convened” NZBA, global banks joined the alliance, pledging to align their lending, investment, and capital markets activities with a net-zero greenhouse gas emissions by 2050, NZBA explains.

Since April 2021, 145 banks in 44 countries with more than $73 trillion in assets have joined NZBA, tripling membership in three years.

“In April 2021 when NZBA launched, no bank had set a science-based sectoral 2030 target for its financed emissions using 1.5°C scenarios,” it says. “Today, over half of NZBA banks have set such targets.”

There are two less on the list.

Goldman Sachs was the first to withdraw from the alliance this month, ESG Today reported. Wells Fargo was the second, announcing its departure Friday.

The banks withdrew two years after 19 state attorneys general launched an investigation into them and four other institutions, Bank of America, Citigroup, JP Morgan Chase and Morgan Stanley, for alleged deceptive trade practices connected to ESG.

Four states led the investigation: Arizona, Kentucky, Missouri and Texas. Others involved include Arkansas, Indiana, Kansas, Louisiana, Mississippi, Montana, Nebraska, Oklahoma, Tennessee and Virginia. Five state investigations aren’t public for confidentiality reasons.

The investigation was the third launched by Texas AG Ken Paxton into deceptive trade practices connected to ESG, which he argues were designed to negatively impact the Texas oil and natural gas industry. The industry is the lifeblood of the Texas economy and major economic engine for the country and world, The Center Square has reported.

The Texas oil and natural gas industry accounts for nearly one-third of Texas’s GDP and funds more than 10% of the state’s budget.

It generates over 43% of the electricity in the U.S. and 51% in Texas, according to 2023 data from the Energy Information Administration.

It continues to break production records, emissions reduction records and job creation records, leading the nation in all three categories, The Center Square reported. Last year, the industry paid the largest amount in tax revenue in state history of more than $26.3 billion. This translated to $72 million a day to fund public schools, universities, roads, first responders and other services.

“The radical climate change movement has been waging an all-out war against American energy for years, and the last thing Americans need right now are corporate activists helping the left bankrupt our fossil fuel industry,” Paxton said in 2022 when launching Texas’ investigation. “If the largest banks in the world think they can get away with lying to consumers or taking any other illegal action designed to target a vital American industry like energy, they’re dead wrong. This investigation is just getting started, and we won’t stop until we get to the truth.”‘

Paxton praised Wells Fargo’s move to withdraw from “an anti-energy activist organization that requires its members to prioritize a radical climate agenda over consumer and investor interests.”

Under Texas law, financial institutions that boycott the oil and natural gas industry are prohibited from entering into contracts with state governmental entities. State law also requires state entities to divest from financial companies that boycott the oil and natural gas industry by implementing ESG policies. To date, 17 companies and 353 publicly traded investment funds are on Texas’ ESG divestment list.

After financial institutions withdraw from the NZBA, they are permitted to do business with Texas, Paxton said. He also urged other financial institutions to follow suit and “end ESG policies that are hostile to our critical oil and gas industries.”

Texas Comptroller Glenn Hegar has expressed skepticism about companies claiming to withdraw from ESG commitments noting there is often doublespeak in their announcements, The Center Square reported.

Notably, when leaving the alliance, a Goldman Sachs spokesperson said the company was still committed to the NZBA goals and has “the capabilities to achieve our goals and to support the sustainability objectives of our clients,” ESG Today reported. The company also said it was “very focused on the increasingly elevated sustainability standards and reporting requirements imposed by regulators around the world.”

“Goldman Sachs also confirmed that its goal to align its financing activities with net zero by 2050, and its interim sector-specific targets remained in place,” ESG Today reported.

Five Goldman Sachs funds are listed in Texas’ ESG divestment list.

The Comptroller’s office remains committed to “enforcing the laws of our state as passed by the Texas Legislature,” Hegar said. “Texas tax dollars should not be invested in a manner that undermines our state’s economy or threatens key Texas industries and jobs.”

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Daily Caller

LNG Farce Sums Up Four Years Of Ridiculous Biden Energy Policy

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From the Daily Caller News Foundation

By David Blackmon

That is what happens when “science” isn’t science at all and energy reality is ignored in favor of the prevailing narratives of the political left.

As Congress struggled with yet another chaotic episode of negotiations over another catastrophic continuing resolution, all I could think was how wonderful it would be for everyone if they just shut the government down and brought an end to the Biden administration and its incredibly braindead and destructive energy-policy farce a month early.

What a blessing it would be for the country if President Joe Biden’s Environmental Protection Agency (EPA) were forced to stop “throwing gold bars off the Titanic” 30 days ahead of schedule. What a merry Christmas we could have if we never had to hear silly talking points based on pseudoscience from the likes of Biden’s climate policy adviser John Podesta or Energy Secretary Jennifer Granholm or Biden himself (read, as always, from his ever-present TelePrompTer) again!

What a shame it has been that the rest of us have been forced to take such unserious people seriously for the last four years solely because they had assumed power over the rest of us. As Jerry Garcia and the Grateful Dead spent decades singing: “What a long, strange trip it’s been.”

Speaking of Granholm, she put the perfect coda to this administration’s seemingly endless series of policy scams this week by playing cynical political games with what was advertised as a serious study. It was ostensibly a study so vitally important that it mandated the suspension of permitting for one of the country’s great growth industries while we breathlessly awaited its publication for most of a year.

That, of course, was the Department of Energy’s (DOE) study related to the economic and environmental impacts of continued growth of the U.S. liquified natural gas (LNG) export industry. We were told in January by both Granholm and Biden that the need to conduct this study was so urgent, that it was entirely necessary to suspend permitting for new LNG export infrastructure until it was completed.

The grand plan was transparent: implement the “pause” based on a highly suspect LNG emissions draft study by researchers at Cornell University, and then publish an impactful DOE study that could be used by a President Kamala Harris to implement a permanent ban on new export facilities. It no doubt seemed foolproof at the Biden White House, but schemes like this never turn out to be anywhere near that.

First, the scientific basis for implementing the pause to begin with fell apart when the authors of the draft Cornell study were forced to radically lower their emissions estimates in the final product published in September.

And then, the DOE study findings turned out to be a mixed bag proving no real danger in allowing the industry to resume its growth path.

Faced with a completed study whose findings essentially amount to a big bag of nothing, Granholm decided she could not simply publish it and let it stand on its own merits. Instead, someone at DOE decided it would be a great idea to leak a three-page letter to the New York Times 24 hours before publication of the study in an obvious attempt to punch up the findings.

The problem with Granholm’s letter was, as the Wall Street Journal’s editorial board put it Thursday, “the study’s facts are at war with her conclusions.” After ticking off a list of ways in which Granholm’s letter exaggerates and misleads about the study’s actual findings, the Journal’s editorial added, “Our sources say the Biden National Security Council and career officials at Energy’s National Laboratories disagree with Ms. Granholm’s conclusions.”

There can be little doubt that this reality would have held little sway in a Kamala Harris presidency. Granholm’s and Podesta’s talking points would have almost certainly resulted in making the permitting “pause” a permanent feature of U.S. energy policy. That is what happens when “science” isn’t science at all and energy reality is ignored in favor of the prevailing narratives of the political left.

What a blessing it would have been to put an end to this form of policy madness a month ahead of time. January 20 surely cannot come soon enough.

David Blackmon is an energy writer and consultant based in Texas. He spent 40 years in the oil and gas business, where he specialized in public policy and communications.

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