LNG Exports
I guess the big news is the Admin’s LNG export infrastructure pause. I think the Admin’s reasoning was climate-related, or at least related to desires of certain climate activist types. The Admin claimed that the analysis was out of date. Which I think is true, since there has been a war in Ukraine and hopeful a general reduction in Russian LNG exports to them. Except that those need to be replaced by someone or something. In the absence of our contribution, would that mean that worldwide supply would go down, which means Russia could make more money.. and our European allies trust us less. This is all pretty obvious, but what I hadn’t heard in most of the coverage was that if exports are cut off, then it’s a boon to our own domestic gas prices (so will we use more?), and a boon to chemical industries who will make more profits (and produce more? with environmental implications?). Thanks to Doomberg for that additional information. Who knows? This seems to me like silly season fire hose flailing to get support from certain quarters (the Bill McKibben/John Podesta/random activists nexus), seemingly more of a political symbolic gesture than actually reducing emissions. And yet.. wars use a great deal of carbon, so wouldn’t we want to starve Russia of profits?
I guess there are two questions in my mind: 1) will restricting exports have any net impacts on carbon emissions? 2) will restricting exports actually cause more carbon to be emitted due to the actions of other countries? (e.g. continuing to fund war, firing up coal plants)?
The industry association Eurogas was quick to condemn the move:
“Europe is committed to phase out its dependency on Russian gas in the wake of Russia’s invasion of Ukraine, and has tied this shift to its 2050 climate goals. In achieving both, imports of US LNG have increased by both volume and importance, and have helped to stabilise gas and electricity prices for European consumers. However, current volumes of LNG coming from the US still leave a supply gap, for which we must continue to increase imports, rather than scale them back, as has been put forward by some interests in the US’ governing institutions.
If additional US LNG export capacities don’t materialise it would risk increasing and prolonging the global supply imbalance. This would inevitably prolong the period of price volatility in Europe and could lead to price increases with the consequent implications that would have for economic turmoil and social impact.”
Now if Europe has economic and social turmoil, it’s possible that they might elect folks who don’t care about energy transitions that much and reduce efforts.. so there’s another potential impact.
So glad, I’m not involved in any EIS’s for these…it’s not clear to me what’s “reasonably foreseeable”.
Musician Has Federal Lands Co-Location Idea
Interesting idea of musician Met: Co-locating O&G and renewables on federal land.
The idea began a little over two years ago with researchers at Planet Reimagined, a climate-focused nonprofit co-founded by Met. He said they mapped the federally leased oil-and-gas land and then worked with someone from the National Aeronautics and Space Administration to determine the photovoltaic potential and the annual wind speeds on those leases. “There’s so much opportunity,” Met said.
New renewable generation can be built more quickly and cheaply on these sites, Met said. For instance, wind and solar applications could reuse the environmental site data collected for the original oil-and-gas project’s approval, cutting years off the environmental assessment process, he said. Sites often already have infrastructure including roads and power grid connections, reducing building costs and time.
Co-locating also avoids adding to the competition for land between conservation, agriculture, renewables, industry and other uses. It can also help transition the business of small, mom-and-pop oil-and-gas producers, their communities and their workers. Independent operators with a median of 12 employees produced 83% of U.S. oil and 90% of its gas in 2019, according to the latest data available from the Independent Petroleum Association of America.
Now I don’t remember seeing electric lines to O&G rigs and production equipment out on federal land, which seems like it could be a problem. So I asked a person online who is familiar with the industry (and if TSW readers know more, please help out.)
The great majority of Federal O&G leases are in remote areas and most are probably are not connected to the grid. The drilling rigs have their own electric generation equipment, which moves on with the rig after the well is drilled. Most production equipment do not require electric service. However some centralized facilities serve multiple wellsites, and those sites generally source their electrical need from small onsite generators, or if they happen to be near a municipal infrastructure, they will connect to local utility lines. In many cases, production equipment can operate on a small amount of electricity produced by a small solar panel with battery backup. The point being, not much electricity is required for the average operating site.
It seems like it might be a good idea, but we run into the need for those pesky and expensive transmission lines again. Perhaps building them along existing roads would not be so bad. Anyway, it’s a novel and interesting idea from an unusual source.