Tomorrow's News Today - ENB Daily Stand Up June 24
Pre-released notes on the ENB Daily Stand Up issued early.
For our ENB Substack subscribers, we are starting the daily stand-up early release: summaries and news stories covered in the podcast. We will be adding additional information and energy news threads. The video and podcast will be released on Monday, June 24th, and this will be released on Sunday night.
1: Biden Illegally Diverts Billions to Build Floating Wind Turbines!
The Biden Administration has funded offshore wind projects using the INFRA Grant program. The INFRA programs or the National Highway Freight Network have nothing to do with offshore wind projects.
What is the INFRA program?
INFRA (the Nationally Significant Multimodal Freight & Highway Projects program) awards competitive grants for multimodal freight and highway projects of national or regional significance to improve the safety, efficiency, and reliability of the movement of freight and people in and across rural and urban areas.”
Projects typically range from as little as $8 million up to $200 million. Here is their list of eligible projects, which is pretty clear and simple:
“Eligible projects:
A highway freight project on the National Highway Freight Network
A highway or bridge project on the National Highway System
A freight intermodal, freight rail, or freight project within the boundaries of a public or private freight rail, water (including ports), or intermodal facility and that is a surface transportation infrastructure project necessary to facilitate direct intermodal interchange, transfer, or access into or out of the facility
A highway-railway grade crossing or grade separation project
A wildlife crossing project
A surface transportation project within the boundaries or functionally connected to an international border crossing that improves a facility owned by Fed/State/local government and increases throughput efficiency
A project for a marine highway corridor that is functionally connected to the NHFN and is likely to reduce road mobile source emissions
A highway, bridge, or freight project on the National Multimodal Freight Network”
And yet INFRA recently awarded a whopping $426,719,810 for the Humboldt Bay Offshore Wind MVP (Minimum Viable Port) in Northern California. This is not a port in the transportation sense where freight and people get on and off ships. It is where they are going to build a bunch of floating wind turbines, which then get towed out to sea and anchored in a big federal offshore wind lease area. In short, it is a big boatyard.
A boatyard is clearly not eligible for INFRA funding, given the above list. Even clearer is this eligibility statement from the website:
“To be eligible under INFRA, a project within the boundaries of a freight rail, water (including ports), or intermodal facility must be a surface transportation infrastructure project necessary to facilitate direct intermodal interchange, transfer, or access into or out of the facility and must significantly improve freight movement on the NHFN.”
NHFN is the National Highway Freight Network, which the Humboldt Bay production facility has nothing to do with. It certainly is not going to “significantly improve freight movement on the NHFN”, which is the big INFRA grant requirement. In fact, bringing in the hundreds of thousands of tons of steel or concrete needed to make the floaters for the giant turbines is likely to increase freight congestion.
We will never get out of debt if we continue to allow money printing and allocate it to unelected bureaucrats’ projects rather than for the intended use as prescribed in the funding bills.
2: In Case You Think Someone Has The Answer To New York’s Looming Energy Disaster
This is an outstanding article from the Manhattan Contrarian talking about the grid design, and energy policies in New York.
In this post last week, I took note that New York’s electric grid system operator, NYISO, has recently issued some clear, if muted, warnings of the impossibility of the energy transition mandated by the state’s 2019 Climate Leadership and Community Protection Act (CLCPA). In a November 2023 Report, NYISO stated (deeply buried at page 52) that “DEFRs are needed to balance intermittent supply with demand,” and those DEFRs must be “significant in capacity.” DEFRs are the elusive and not-yet-invented “dispatchable emissions-free resources.” At a conference the following month, NYISO’s VP for System Integration Planning, Zachary Smith, reiterated the need for these DEFRs in large amounts. Smith presented charts quantifying the capacity of DEFRs needed for New York to “balance” its prospective intermittent wind/solar supply as something in the range of 30+ GW. 30 GW is close to the peak electricity demand for the entire state, and is approximately equivalent to the existing capacity of New York’s fleet of natural gas plants, all of which are mandated to be closed by 2040.
So what is the answer to the great DEFR conundrum? New York’s Public Service Commission, operating from its usual playbook, has initiated a proceeding, under the name Proceeding 15-E-0302, to uncover the answer. My New York co-blogger Roger Caiazza calls this the “DEFR Proceeding,” although I don’t find the PSC using that name. Everybody gets to submit their brilliant thoughts and ideas. So far there seem to be well over 22,000 items entered in the docket — more than any human being can ever read.
In just the past few days, some big comments from important players have floated in. On Monday (June 17), a comment appeared on this DEFR docket co-signed by two environmental NGOs, Earth Justice and the Sierra Club. These are two of the very biggest, best funded, and most vociferous advocates of the urgent necessity of an immediate energy transition away from fossil fuels. With their hundreds of millions of dollars of annual revenue and scores of staffers, surely these guys must have found the answer to the DEFR conundrum.
In fact, incredibly, they have no clue. The basic approach in their Comment is to pooh-pooh the entire idea that large amounts of DEFRs may be needed, on the sole ground that there may be some (unspecified) flaws in the modeling used by NYISO. Their preferred solution is to turn off everybody’s electricity via a central switch when generation drops. Back to the Stone Age!
Here is their topic sentence:
Commenters are concerned that NYISO’s presentation at the December technical conference overstates the need for dispatchable, emissions-free resources (“DEFRs”) and downplays the value of taking steps in the near term to minimize this gap.
OK then, if perhaps NYISO has “overstated” the need for these DEFRs, then what is your alternative calculation of the amount of such resources that will be needed, and what are the assumptions that go into that calculation? They don’t provide any of that, not even a rough estimate or guess of any kind. Instead, they seek to discourage and stop any development whatsoever of these DEFRs:
Rushing to deploy expensive and untested DEFRs risks committing New York to flawed technologies, as it is unclear at the present time which technologies will emerge as commercially scalable and cost effective, much less which ones of the often talked about DEFRs would actually be emissions free.
So if there is to be no development or deployment of DEFRs in the next several years — during which New York is scheduled to close its natural gas plants and electrify both building heat and large numbers of automobiles — then what do you propose as the way to provide the electricity? Basically, all they would allow is “storage, wind and solar.”:
Rather than picking DEFR technologies to subsidize that may end up being sub-optimal, the DPS should focus on accelerating the build out of storage, solar, and wind, along with other existing methods to minimize the DEFR gap.
If “storage” is to be the back-up of intermittent wind and solar, how much will you need, and how much will that cost, and will the storage technology be capable of holding charge as long as will be needed? The only answer provided to these questions is a touching hope for some magical results from a tiny and barely-initiated federal program:
Deployment of new long duration storage to fill any gap may also become a viable avenue for filling whatever gap remains. In fact, just this April the US Department of Energy disbursed $15 million to advance projects seeking to “enable a long-duration capable (10+ hours) energy storage technology. . . .
As readers here know, 10 hours of storage is not enough to get through even one long calm winter night. The real storage need to back up wind and solar for an entire year is more like 1000 hours.
So it looks like we’ll be resorting to those “other existing methods” for balancing supply and demand to potentially fill the DEFR “gap.” What are those? It turns out that that phrase refers to some combination of hoping for imports from neighboring states (don’t they use coal?) and doing away with the idea that you can have electricity when you want it:
Some of these existing methods include but are not limited to improving inter-regional coordination, expanding import capability with inter-regional transmission, expanding intra-regional transmission, increasing energy efficiency and mandatory demand response, and incorporating flexibility of large loads if possible.
“Mandatory demand response” is Maoist-speak for turning off your electricity from central headquarters when the wind isn’t blowing.
Interestingly, about half of this Comment is then devoted to the issue of potentially developing hydrogen infrastructure as the means to back up a wind/solar system. Given that these guys are against investigating any other DEFRs, you might think they would be fans of hydrogen. But you would be wrong. In fact, from this Comment you will learn that they echo the Manhattan Contrarian on the many problems of hydrogen:
[P]ipelines constructed specifically to transport hydrogen do not exist in New York. [E]xisting gas pipelines in New York cannot safely transport more than de minimis concentrations of hydrogen, and creating a new pipeline distribution system for hydrogen would incur enormous costs. Leakage of hydrogen is a serious concern. Due to its small molecular size, hydrogen is prone to leakage rates on the order of 1.3-2.8 times greater than methane. . . . Increasing the mileage of pipelines in New York capable of transporting hydrogen also presents significant cost challenges. . . . [H]ydrogen embrittles steel and cast iron pipelines, necessitating a costly replacement of existing pipeline infrastructure to accommodate hydrogen. . . . [E]ven if existing natural gas pipelines could be easily repurposed to transport higher percentages of hydrogen, the amount of energy flowing through the pipelines would be drastically reduced. . . . [S]toring hydrogen presents both cost and feasibility hurdles.
And on and on from there. No known means of generating reliable electricity meets their standards of environmental purity. Although they will only say it in the Orwellian terminology of “demand response,” these guys are clearly advocating for the end to the idea of electricity whenever you want it.
Mr. Caiazza has many more detailed thoughts on this Comment at his website here.
Bottom line: nobody has the answer to how to keep the lights on after the natural gas plants are closed. For now, we continue to careen toward the disaster.
The bottom line says it all: “nobody has the answer to how to keep the lights on after the natural gas plants are closed. For now, we continue to careen toward the disaster.” - This applies to the state of New York and the rest of the world. Physics and fiscal responsibility matter, and we tend not to pay attention.
3: Almost Half Of EV Owners Want To Go Back To Gas Cars, Study Finds
The world is not buying EVs for several reasons. Even in Stu’s family, some are die-hard EV folks who think that fossil fuel cars need to be abolished. The technology is not ready for the total adoption of EVs, and Michael agrees that Tesla is the lead in the field of self-driving cars and technology.
If I get an EV, it will be a Tesla; it would be fantastic if Tesla would come out with a self-driving hybrid car. That would be a game-changer.
Nearly half of American electric vehicle (EV) owners want to buy an internal combustion engine model the next time they buy a car, according to a new study from McKinsey and Company, a leading consulting firm. [emphasis, links added]
Approximately 46% of Americans who own an EV want to go back to a standard vehicle for their next purchase, citing issues like inadequate charging infrastructure and affordability, according to McKinsey’s study, which was obtained and reviewed by the Daily Caller News Foundation.
The study’s findings further suggest that the Biden administration’s EV push is struggling to land with American consumers after 46% of respondents indicated that they are unlikely or very unlikely to purchase an EV in a June poll conducted by The Associated Press and the University of Chicago’s Energy Policy Institute.
Moreover, 58% of Americans are very likely to keep their current cars for longer, and 44% are likely to postpone a possible switch to EVs, McKinsey’s study found.
Consumers’ concerns about EV charging infrastructure are notable given the slow rollout of the Biden administration’s $7.5 billion public EV charger program, which has so far led to the construction of only a handful of chargers in nearly three years.
The Biden administration has a stated goal of having EVs make up 50% of all new car sales by 2030, and the Environmental Protection Agency (EPA) finalized stringent regulations in March that will force manufacturers to ensure that up to 56% of their light-duty vehicles are EVs by 2032.
The EPA has also finalized strict emissions standards for medium- and light-duty vehicles, while the National Highway Traffic Safety Administration (NHTSA) has also locked in fuel economy standards that will further push manufacturers to produce more EVs.
The administration is also spending billions of dollars to subsidize the production and purchase of EVs, but manufacturers are still losing considerable amounts of cash on their EV product lines.
EVs remained below a 10% share of all auto sales in the U.S. in 2023, according to Cox Automotive.
4: NatPower Marine Investing $3.2B+ to Establish the UK’s First Commercial Electric Ship Charging Network
Michael and Stu discuss the “Chicken or the Egg approach to EV adoption. The bottom line is that we need the chargers first with corporate investments and not printed government programs.
To advance the mission of reducing global shipping emissions, NatPower Marine and Peel Ports Group are collaborating to establish the first “green shipping corridors” between Ireland and the UK.
Through this project, NatPower Marine will develop the UK’s first commercial electric ship (e-ship) charging network to support electric propulsion and cold ironing – the process of accessing clean power during docking to avoid engine pollution while at the port.
“With marine trade set to triple by 2050, we urgently need to build the global network of clean energy charging infrastructure the industry desperately needs. Our partnership with Peel Ports Group is the first step in this strategic approach to accelerate the adoption of clean energy in shipping and help cargo owners reach net zero,” said Stefano Sommadossi, CEO of NatPower Marine.
The network will establish a dedicated e-ship charging infrastructure across all eight UK and Irish ports operated by Peel Ports Group and include the installation of EV chargers for commercial EVs passing through the ports.
The first Irish Sea routes will include Belfast-Heysham and Dublin-Birkenhead, supporting Peel Port Group’s goal for Heysham Port in Lancashire to become a net zero port. To date, Heysham Port has reduced the emissions of its landside plant, equipment, and vehicles by nearly 90%.
“NatPower Marine is investing in deploying the largest global network of charging points to help solve the ‘chicken and egg conundrum’ facing this industry: shipping lines cannot electrify their vessels if port charging infrastructure is not available, and ports are unable to raise capital for charging infrastructure without certainty of demand from shipping lines,” added Sommadossi.
In total, this global charging network project represents an investment of more than $3.2 billion and will include 120 port locations worldwide by 2030. NatPower Marine will develop the sites in partnership with port operators and act as the long-term operator of the global charging network.
Source: EnergyTech
5: Oil prices ease on strong dollar, mixed global economic news
June 21 (Reuters) - Crude prices eased about 1% on Friday on worries that global oil demand growth could be hit by a strong U.S. dollar and negative economic news from some parts of the world.
Prices declined despite signs of improving U.S. oil demand and falling fuel inventories that helped boost crude prices to a seven-week high a day earlier.
Brent futures fell 47 cents, or 0.6%, to settle at $85.24 a barrel, while U.S. West Texas Intermediate crude (WTI) ended 56 cents, or 0.7%, lower at $80.73.
The decline pushed WTI out of technically overbought territory for the first time in four days, while Brent futures remained overbought for a fourth day in a row for the first time since early April.
For the week, both crude benchmarks were up about 3% after gaining about 4% last week.
The U.S. dollar (.DXY), opens new tab rose to a seven-week high versus a basket of other currencies with the Federal Reserve's patient approach to cutting interest rates contrasting with more dovish stances elsewhere.
The Fed hiked interest rates aggressively in 2022 and 2023 to tame a surge in inflation. The higher rates boosted borrowing costs for consumers and businesses, which can slow economic growth and reduce demand for oil.
A stronger U.S. dollar can also reduce demand for oil by making greenback-denominated commodities like oil more expensive for holders of other currencies.
In the world's biggest oil consumer, U.S. business activity crept up to a 26-month high in June amid a rebound in employment, but price pressures subsided considerably, offering hope that a recent slowdown in inflation was likely to be sustained.
U.S. existing home sales, however, fell for a third straight month in May as record-high prices and a resurgence in mortgage rates sidelined potential buyers.
Data from the U.S. Energy Information Administration on Thursday showed total product supplied, a proxy for oil demand, rose by 1.9 million barrels per day last week to 21.1 million barrels per day.
Despite the decline in crude prices, U.S. gasoline futures climbed for a fourth day to a one-month high on rising demand during the summer driving season and a drop in inventories.
MIXED GLOBAL DEMAND SIGNALS
In India, refiners processed nearly 1.3% more crude oil in May than a year earlier, provisional government data showed, while the share of Russian supplies in imports to India, the world's third biggest oil consumer, increased.
"Signs of stronger demand in Asia also boosted sentiment. Oil refineries across the region are bringing back some idled capacity after maintenance," analysts at ANZ Research said.
But in the euro zone, business growth slowed sharply this month as demand fell for the first time since February.
In China, the world's second biggest oil consumer, Beijing warned that escalating frictions with the European Union over electric vehicle imports could trigger a trade war.
Thanks, and we will add the links to the podcast - as always, we appreciate all of the great feedback.
Looking forward to this segment!
Good idea, Stu. Good and timely information is our best weapon as an energy sanity team.