Climate Change Fears Put US Gas Utilities On Defensive.
According to the Financial Times, “US natural gas utilities are rallying against an emergent threat to their historically stable business as communities worried about climate change
block new pipelines and gas connections for homes. As the cleanest-burning fossil fuel, natural gas reduced total US energy-related carbon emissions as it displaced coal at power stations. The majority of household heating, hot water and cooking is now fuelled
by gas, while it is also the most-used input for US electricity generation, aided by cheap supplies from shale drilling. However, this has led annual emissions from gas to increase by nearly 500m tonnes in the past 10 years, including a 4 per cent rise in
2019, the Energy Information Administration estimates. This rise has stoked opposition against new pipelines and home connections, with climate activists saying energy demand could be better served by renewable sources. The city of Berkeley last year banned
gas connections in new construction, sparking similar efforts in other communities. In New York state, regulators stopped a new pipeline sought by National Grid, causing the UK-based utility owner to halt gas hookups for new customers until the governor threatened
to revoke its operating licence. These setbacks have led the American Gas Association to release its first climate change position statement. Its document published last month contained
10 commitments for a lower-carbon economy and eight principles, the last of which declares that public policy ‘should include the option of natural gas for consumers’.” [Financial Times,
2/6/20 (=)]
Shale Gas Swamps Asia, Pushing LNG Prices To Record Lows.
According to the Wall Street Journal, “Liquefied natural gas is fetching the lowest price on record in Asia, a troubling sign for U.S. energy producers who have relied on overseas
shipments of shale gas to buoy the sagging domestic market. The main price gauge for liquefied natural gas, or LNG, in Asia fell to $3.15 per million British thermal units Wednesday, down sharply from more than $20 five years ago as U.S. deliveries have swamped
markets around the world. As recently as Jan. 15, the Asian benchmark, called the Japan Korea Marker, was comfortably above $5. Around then, fear that the coronavirus outbreak would stall economic activity in the world’s second-largest economy added to other
factors already pressuring prices. Those included a mild winter in Asia, ample local stockpiles and increasing deliveries from U.S. gas-liquefaction facilities. ‘The fundamentals were already really weak,’ said Ira Joseph, head of gas and power analytics at
S&P Global Platts, which tracks prices. ‘The whole market is really oversupplied.’ Tumbling LNG prices are cause for concern for a wide swath of energy companies, from major oil companies Royal Dutch Shell PLC and Chevron Corp. to independent firms that operate
export terminals, such as Cheniere Energy Inc., and shale-gas producers like Cabot Oil & Gas Corp., Range Resources Corp. and EQT Corp. A problem for LNG suppliers like these is that power plants in Asia have been slower to switch from burning coal to gas
than their U.S. and European peers were when cheap shale gas flooded their local markets, Mr. Joseph said.” [Wall Street Journal,
2/6/20 (=)]
Why Some Cities Are Targeting Gas Stoves To Fight Climate Change.
According to Curbed, “Ever since the Green New Deal became a key talking point and policy goal of progressive politicians last year, there’s been a renewed push to make American homes
and buildings better for the environment. For a growing number of municipalities and local leaders, part of the answer lies in shifting homes toward relying solely on electricity, instead of gas, for cooking, heating, and running appliances. The current movement
for U.S. municipalities to eliminate natural gas from homes first gained momentum in California. In 2018, the state’s then-governor, Jerry Brown, signed a pair of laws that funded research into reducing building emissions and developing clean heating technology.
Last July, Berkeley became the first U.S. municipality to sign a law banning the installation of natural gas lines in new buildings. Since then, more than 20 other California cities have passed similar laws, and local and state governments across the country
have begun considering similar laws as part of their strategies to cut building emissions. Maine passed a bill last June providing funding to install new electric heat pumps in place of furnaces across the state, and Seattle Mayor Jenny Durkan said her city
will unveil a plan in 2021 to make all new civic buildings fully electric. ‘This is about what kind of technology can support the cities and homes that we want and need,’ says Sage Welch, a spokesperson for the Building Decarbonization Coalition.” [Curbed,
2/5/20 (=)]
PennEast Makes Clear It’s Digging In Despite Roadblocks To Controversial Pipeline.
According to NJ Spotlight, “Throughout its long fight to win approval for a 120-mile-long new natural gas pipeline through parts of Pennsylvania and New Jersey, PennEast Pipeline
LLC has repeatedly demonstrated its commitment to be in it for the long haul. The past several days underlined that steadfastness with a flurry of moves by the company, some of which may have bolstered its five-year quest to win approval for the controversial
project, and others that guaranteed new delays in its efforts. Late last week, PennEast filed amendments to its $1 billion project, proposing to build it in two phases. Initially, it would focus on 68 miles in Pennsylvania where it has won most of the approvals
it needs to begin construction, targeting completion by November of next year. The other portion in New Jersey would be set to deliver gas in 2023, pending more complicated permit approvals in the state. In a press release, Anthony Cox, chair of the company’s
Board of Managers, said the action ‘again proves the PennEast partners are fully committed to the entire project and meeting the needs of its customers for safe, clean, reliable and affordable energy.’’ Meanwhile, the Federal Energy Regulatory Commission sided
with PennEast last week in seeking to overturn an adverse federal appeals court ruling that threatens to block the project from moving forward in New Jersey. The agency issued an order saying the decision could disrupt the natural gas sector’s ability to construct
interstate pipelines.” [NJ Spotlight,
2/5/20 (=)]
The Arctic’s Thawing Ground Is Releasing A Shocking Amount Of Dangerous Gases.
According to National Geographic, “In the black spruce forests along the Tanana River in central Alaska, scientists Miriam Jones and Merritt Turetsky watched for years as trees tipped,
leaned, and toppled into boggy ground. Over time, the earth below weakened and grew soupy. This once-hard soil, thick with ice, was heating up, sinking and filling with rain and snow melt. Scientists have known for decades that as rising temperatures thaw
the northern latitudes, previously frozen soil called permafrost will release greenhouse gases, which in turn will speed up global climate change. But based in part on what they learned by studying Alaska’s ‘drunken forests,’ Turetsky, Jones and a team of
experts this week confirmed something else: Warming of small patches of frozen ground that contain large veins of ice will release far more emissions than once thought. This process, called ‘abrupt thaw,’ will probably hit just 5 percent of Arctic permafrost.
But that will likely be enough, conservatively, to double permafrost’s overall contribution to the warming of the planet, the team of researchers led by Turetsky concluded in a study published Monday in the journal Nature Geoscience. ‘It’s a little change,
but it can have a big punch,’ says Turetsky, director of the Institute for Arctic and Alpine Research at the University of Colorado. Abrupt thaw is not a cause for alarm, the scientists say. Permafrost will still produce fewer emissions than our own burning
of coal, oil and natural gas. David Lawrence, a senior scientist at the National Center for Atmospheric Research in Boulder, Colorado, said that—until now— thawing permafrost had been expected to amplify human-caused climate change by about 10 percent.” [National
Geographic,
2/5/20 (=)]
Governor Plans To Veto Natural Gas Manufacturing Tax Credit.
According to the Associated Press, “Pennsylvania Gov. Tom Wolf (D) will veto a bill that would provide millions in tax breaks for new construction of facilities that use natural gas
extracted in the state to produce fertilizer and other chemicals, his spokesman said yesterday. The bill, which passed both legislative chambers this week by veto-proof majorities, would authorize the ‘energy and fertilizer manufacturing tax credit’ for projects
that require at least $450 million in construction and startup costs and that create at least 800 jobs. The Revenue Department estimates the tax credit would be worth about $22 million annually per plant. The tax break would expire at the end of 2050. Wolf
‘believes such projects should be evaluated on a specific case-by-case basis,’ said spokesman J.J. Abbott. ‘However, if there was a specific project, he would be open to a conversation.’ The bill’s primary sponsor, state Rep. Aaron Kaufer (R), said the fact
that the bill is not specific to a single business makes for better policy. ‘This is truly a once-in-a-lifetime opportunity, and if we don’t take advantage of our natural resources in northeastern Pennsylvania, we’re missing out on the opportunity,’ Kaufer
said yesterday. Eligibility will also require payment of prevailing wage rates and an effort to hire local workers during construction.” [Associated Press,
2/6/20 (=)]
Pipeline CEO 'Scared To Death' Of Fracking Ban.
According to E&E News, “The CEO of the company known for the Dakota Access pipeline said yesterday he’s terrified of the risk from politicians who want to end hydraulic fracturing
— a position that’s supported by some Democrats running for president. ‘I am scared to death, I’m telling you,’ Kelcy Warren, Energy Transfer LP’s chairman and chief executive, told a crowd at the Argus Americas Crude Summit. Warren said he didn’t know ‘if
any of those people actually know what fracking really is,’ suggesting it’s a buzzword they picked up and started using. ‘Can you imagine if we would eliminate fracking in the United States?’ Warren asked. ‘It would be chaos.’ Fracking involves the injection
of sand, water and chemicals at high pressure into tight rock formations, including the Bakken Shale in North Dakota. The process is widely credited with reversing the decline in U.S. oil and gas production, but environmental groups warn about the effects
fracking could have on the air, water and seismic activity. The oil and gas industry maintains the process is safe. The construction of Dakota Access led to protests as it was being built to send oil from North Dakota to Illinois. The project began operating
in 2017, and it enables connections not only to refineries in Illinois but to other pipelines that lead to the Texas coast. Euan Craik, CEO of the Americas at Argus Media, elicited Warren’s political comments yesterday by asking about Massachusetts Democratic
Sen. Elizabeth Warren’s pitch that she would end fracking as president. After the Energy Transfer CEO gave his response, Craik said he wasn’t sure ‘legally an executive order can overturn any of that.’ He noted that the United States relies heavily on state
regulation.” [E&E News,
2/6/20 (=)]
Electric Utilities Press Gas Industry To Clean Up Methane Emissions.
According to Politico, “Investor-owned electric utilities told Wall Street analysts on Wednesday they will press the natural gas industry to improve its environmental profile, and
they outlined a plan that could see power companies pay more for the fuel to help reduce methane leaks. The new Natural Gas Sustainability Initiative from the Edison Electric Institute, a trade group for the utilities, and the American Gas Association, will
provide gas companies with the first standard methodology to report methane emissions across their systems, EEI officials said during their annual Wall Street briefing. Initially, those standards are designed to improve industry transparency on emissions of
methane emissions, a far more potent, though short-lived, greenhouse gas. After that, EEI officials said their members may ask regulators to approve higher-priced contracts for gas from companies that take action to reduce emissions. ‘It’s almost like … green
tariffs or different types of [renewable energy] products out there,’ said Richard McMahon, senior vice president of energy supply and finance at EEI. ‘If you have a differentiated gas product that is coming from a value chain that has done more to mitigate
methane and is reporting it out, then that is something that needs to be part of the dialogue with regulators about what [pricing] is appropriate.’ The new initiative comes in response to pressure from institutional investors like pension funds, which have
stepped up their demands for companies to dramatically cut greenhouse gases and move away from fossil fuels.” [Politico,
2/5/20 (+)]
Chad Ellwood
Climate Action Campaign
202.448.2877 ext. 119