Energy Industry Insights: March 2024
Record U.S. Oil Production and the Potential Impacts
By Schenley N. Kent
Domestic oil production in the U.S. reached a new record in November 2023, hitting 13.31 million barrels per day, according to data from the U.S. Energy Information Administration. In “Domestic Oil Production in U.S Reached Record Levels,” historical data shows that the new domestic oil production record set in November surpassed the previous record of 13.25 million barrels per day achieved in September 2023.
Weighing in on the other side of the argument is the column “Record Production Means Energy and Economic Security,” from the Independent Petroleum Association of America. In this article, the Association points out that the country’s record-breaking production levels have not come to fruition at the expense of harming some Americans.
Click here to read the entire article.
US Counties are Blocking the Future of Renewable Energy: These Maps, Graphics Show How
“Across America, local bans, moratoriums and construction impediments are blocking wind and solar energy with increasing levels of red tape.”
Why this is important: This article highlights one of two issues making meeting U.S. clean energy goals more difficult: supply. Demand for power is skyrocketing in a way that was not foreseen five or 10 years ago. However, that just makes increasing supply all the more important. Many localities across the nation are making it more difficult to increase supply through prohibiting location of facilities in their localities. While in many situations perfectly reasonable, local goals are being served—for instance, preserving the viability of local economies based upon agriculture and tourism—the net effect on the national goal of increasing renewable energy resources is huge and puts both state and national goals in danger. The maps in this article, however, are suspect: It marks some localities as prohibiting renewable energy that have merely put in place construction standards and allow renewable energy projects to go forward, while not marking others that have entirely prohibited it—so take the specifics with a grain of salt. — Michael W.S. Lockaby
How China Became the World’s Leader on Renewable Energy
“China has achieved stunning growth in its installed renewable capacity over the last two decades, far outpacing the rest of the world.”
Why this is important: Rare earth metals (REMs) are critical to the manufacturing of batteries and other clean energy technologies. One aspect of China’s renewable energy dominance is its control of REMs supply chains. For example, the Bayan Obo mine in China alone comprised 45 percent of global rare earth mine production in 2019. While the Executive Branch has been responsible for funding needed REM projects in the U.S., Congress has been largely inactive. Several bills supporting U.S. REM production have been introduced in Congress throughout the years, but few have become law. If the U.S. is going to seriously contend with China in renewable energy development, Congress needs to kickstart domestic production of REMs. — Joseph C. Unger
New Poll Shows Pennsylvania Voters Overwhelmingly Reject Biden LNG Pause
“A new statewide Pennsylvania poll showed 58% of Pennsylvania voters surveyed oppose President Joe Biden’s liquefied natural gas export moratorium after learning the details of the impact it would have on jobs and communities in the state.”
Why this is important: On January 26, 2024, the Biden administration announced that it was halting approval of new licenses to export liquified natural gas (LNG) due to climate change concerns. The article discusses Pennsylvania voters’ opposition to the LNG export moratorium. A recent poll showed that 58 percent of Pennsylvania voters surveyed oppose the moratorium and that at least 41 percent of voters are more likely to vote against President Biden in the upcoming presidential election based on the suspension of LNG export approvals.
Both Pennsylvania Democratic Senators John Fetterman and Bob Casey also urged President Biden to undo his decision. Governor Shapiro, also a Democrat, similarly requested that the moratorium be short. As the second-largest natural gas-producing state after Texas, Pennsylvania’s economy is directly affected by the LNG export moratorium. As such, President Biden’s decision will likely not only impact Pennsylvania’s economy in the short term, but could impact the 2024 presidential election and future LNG export policy depending on who presides in the White House next year. — Steven W. Lee
10 Republican-Led States File Lawsuit to Block SEC’s Climate Disclosure Rule
“The states say the agency exceeded its rulemaking authority in requiring public companies to disclose climate-related risks as part of their registrations and annual filings.”
Why this is important: Ten states, led by West Virginia’s Attorney General Patrick Morrisey, are challenging the recent Securities and Exchange Commission rule requiring companies to report on their climate-related risks, greenhouse gas emissions, and climate-related targets. The lawsuit asserts that the final rule, which requires less reporting than the proposed rule, still exceeds the SEC’s authority to regulate business under its authorizing act. The new rule is in line with the Biden administration’s efforts to place climate considerations at the forefront of all agency decision-making. — David L. Yaussy
The Last Coal Plant in New England is Sputtering. What Happens Next?
“It will mark another milestone as well – the first region in the U.S. in over a century will be coal-free.”
Why this is important: The last coal-fired electric generation plant in New England is on its last economic legs. The Merrimack Station in New Hampshire operated for 500 hours on 21 days last year. In 2022, it ran 27 days. It has until March 23, 2024 to pass environmental permitting tests that it has struggled to pass the past few years. The New England region now produces 40 percent of its power from renewables and 49 percent from natural gas. If the plant closes as expected, the New England region will be first region in U.S. with no coal-fired electric generation. — Mark E. Heath
Fracking for Heat: Utah could become Home to World’s Largest Enhanced Geothermal Plant
“Beaver County’s Cape Station expects to begin pumping out continuous power in 2026.”
Why this is important: One of the more interesting alternative energy sources is geothermal, which holds the promise of producing zero carbon baseload power. For years, geothermal steam plants were limited by geology to just a few areas with very hot rock close to the surface. With the knowledge and experience gained by the oil and gas industry from drilling horizontal wells and fracturing them, the places where geothermal energy can be produced has expanded greatly. The concept has been proven, but whether it will be economical is something that is presently being tested. — David L. Yaussy
“The transformation of the former coal plant into a Tesla Megapack is a big step forward for clean energy and safety in the form of outages.”
Why this is important: A former coal plant in Queensland, Australia, is being converted into a $330 million Tesla Megapack, a new sustainable energy hub. The Megapack uses powerful batteries for storage and support to stabilize the grid and in this application, store as much as two hours-worth of power for a city. These batteries are considered critical to supplement renewables for all day power with storage of surplus solar power in the day that can be used at night. — Mark E. Heath
Nuclear Energy’s Resurgence in US Policy Spotlight
“New legislation and Biden administration policies are breathing life into the nuclear power sector, marking a significant shift toward embracing it as a key carbon-free energy source.”
Why this is important: Nuclear power generation is continuing to grow due to support for carbon-free power generation. Analysts see three reasons for recent growth: 1) the Biden administration is supporting nuclear power by embracing it as a carbon-free energy source, 2) the government is providing billions for advanced nuclear technology, and 3) the administration is making regulatory changes to speed up licensing approval of new advanced reactors. Current technology is moving towards smaller modular nuclear reactors for electric generation. The new reactors will be needed to supplement renewables when wind and sunlight are not available to generate power. — Mark E. Heath
Toyota is Hitting the Gas on Hybrids as EV Sales Cool. But What does That Mean for the Planet?
“Auto experts say the company’s foot dragging on EVs was no fumble, rather, a calculated strategy to give consumers what they want — although EV sales are rising, problems like affordability, battery range and sparse charging stations are dampening growth in demand.”
Why this is important: Several car manufacturers have ramped up efforts to produce electric vehicles (EVs). Although EV sales are rising, problems like affordability, battery range, and sparse charging stations have slowed demand. Toyota has been slow to embrace the EV revolution fully and has instead maintained its focus on hybrid vehicles. In the article, Toyota states that it shares “the objective of reducing carbon as much as possible, as soon as possible.” Yet, the company has been highly critical of President Biden’s EV policies. As the U.S. auto industry moves steadily toward all-electric vehicles to align with the Biden clean energy policy goals, Toyota has been lobbying the government for at least three years to slow that transition. Sources say that Toyota’s lobbying efforts may have worked since the Biden administration is considering delaying some of its most stringent clean energy requirements on automakers, initially set to start in 2027, until after 2030.
Per the article, Toyota’s decision to favor hybrids has paid off handsomely compared to its rivals – including the all-electric Tesla. Last year, Toyota sold 11.2 million cars, more than any other automaker. Demand for fully electric vehicles is still growing in the U.S., just not as fast as initially forecasted. The U.S. crossed a critical threshold last year with 1.2 million EVs sold, a 46.3 percent increase from 2022. Despite the growing demand for EVs, Toyota remains focused on manufacturing hybrid vehicles. Specifically, plug-in hybrids offer the best of both worlds – the reliability and range of a gas car but with less pollution and fuel use and better affordability than EVs. — Schenley N. Kent
Global Small Modular Reactor Pipeline Hits 22 GW, with US Leading the Market
“Growing interest from heavy industry and a 25-nation agreement to triple nuclear power globally by 2050 are tailwinds as the first commercial SMR comes online in China.”
Why this is important: Nuclear power, fueled by the growth of small modular nuclear reactors (SMRs), now have 22 GW of power generation in the pipeline to be built worldwide. The majority of that growth is in the U.S. with $176 billion in planned projects, which will add up to 7 GW (4 GW announced and another 3 GW in planning stages). In December 2023, 150 countries, including the U.S., Canada, Poland, South Korea, and the United Kingdom, pledged to grow nuclear power by 25 percent to reduce CO2 emissions. Perhaps the biggest indicator of a growing nuclear sector is that three new uranium mines have opened in the U.S. — Mark E. Heath
Trillions of Tons of Buried Hydrogen: Clean Energy Gold Rush Begins
“There’s enough natural hydrogen trapped underground to meet all projected demands for hundreds of years.”
Why this is important: Here’s a (relatively) new one – gold hydrogen, meaning naturally occurring deposits of hydrogen underground that can be accessed like natural gas, rather than derived from water or hydrocarbons. Geologists are still trying to figure out how to locate them, but they could be a great source of energy, used in combustion or in fuel cells. Commercial viability will depend on finding large enough pockets of the gas, and on whether hydrogen can be separated easily from the methane and other gases that often reside with it. — David L. Yaussy
● EIA Energy Statistics
Here is a round-up of the latest statistics concerning the energy industry.
ELECTRICITY
PETROLEUM
Weekly Petroleum Status Report
NATURAL GAS
Short-Term Energy Outlook – Natural Gas
COAL
Short-Term Energy Outlook – Coal
RENEWABLES
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