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Conversely, the share of 6%-plus mortgages outstanding surges to the highest since 2016.

By Wolf Richter for WOLF STREET.

The 30-year mortgage with a fixed rate of 3% for the duration of 30 years was as close to free money in an inflationary world as regular folks can get, and it would make sense to hang on to it and never move and never refinance the mortgage and never do anything that would jeopardize this mortgage. But then life happens.

The number of mortgages outstanding with rates below 4% has been declining steadily as more and more of these mortgages get paid off. In Q4, the share dropped to 54.1% of all mortgages outstanding, the lowest since Q4 2020, and down from the high of 65.1% in Q1 2022 (red).

The share of mortgages outstanding with rates below 3% declined to 20.9% of all mortgages outstanding, the lowest since Q1 2021, and down from the peak in Q1 2022 of 24.6%, according to the Federal Housing Finance Authority’s National Mortgage Data Base on March 31 (blue in the chart below).

These mortgages include adjustable-rate mortgages, whose interest rates adjust based on some short-term benchmark interest rate, such as the six-month SOFR. Before there was SOFR, there was LIBOR. An ARM might be priced at 6-month SOFR plus a spread of 2 or 3 percentage points. During the years of ZIRP when the six-month SOFR/LIBOR was close to 0%, ARMs had very low rates, which explains the blue line before 2020.

But those homeowners experienced a payment shock when the Fed started hiking rates in 2022, and in July 2023, SOFR went over 5%, plus 2 or percentage points made for AMRs of 7% or 8%, up from 2%. That delivered a massive payment shock. Thankfully, not a lot of homeowners had ARMs.

Conversely, the share of 6%-plus mortgages outstanding rose 18.0% at the end of Q4 2024, the highest since Q2 2016, from a share of 7.3% at the low point in Q2 2022. It reflects purchase mortgages and refinance mortgages with rates of 6% or higher.

The fact that the share has more than doubled from 7.3% to 18% in a little over two years shows that “locked-in” ends when life happens: A change in jobs that requires a move, the need for a larger or smaller home, the urge to relocate closer to the kids. Death, divorce, marriage, natural disaster… are all reasons for 3% mortgages to get paid off. Other homeowners decide to sell the home to “lock in” their huge gains, pay off the mortgage, and walk away with piles of cash to invest, while paying rent instead of the costs of homeownership.

By historical measures, this share of 18.0% is still very low, as 30-year fixed rate mortgages were typically well above 6% in the decades prior to 2004.

The average 30-year fixed mortgage rate has been above 6% since September 2022, according to Freddie Mac data.

The below-3% average 30-year fixed-rate mortgage occurred in a brief period from mid-2020 to late 2021, triggering the historic refinancing boom that by Q1 2022 caused nearly a quarter of all outstanding mortgages to have rates of less than 3%.

Below-4% mortgage rates occurred periodically starting in 2012.

Those super-low mortgage rates were a result of the Fed’s QE when the Fed bought bonds, including large volumes of mortgage-backed securities (MBS) specifically to repress mortgage rates, and those repressed mortgage rates caused home prices to explode, which is now the biggest problem that the housing market has to deal with.

The “locked-in effect” describes a situation where homeowners with super-low mortgage rates try to hang on to that mortgage for as long as possible by not moving, thereby staying off the housing market entirely, both as seller and as buyer. It ultimately doesn’t change inventory because they’re neither buying nor not selling a house, thereby not taking one off the market and not putting one on the market. But it depresses home sales, which are down by 20% to 25% from 2018 and 2019.

The brokerage industry – which makes money coming and going when a homeowner changes homes – and the mortgage-lending industry are very upset about this locked-in effect on sales because it’s eating their lunch, and not just their lunch, but their jobs.

But turns out, these below-4% mortgages are not so locked in as homeowners find themselves confronted with a situation where they want to, or have to, pay off the low-interest-rate mortgage and take out a new mortgage at a much higher rate. And so homeowner by homeowner, the locked-in effect fades.

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The narrative is that an exit from the current conservatorship would turn Fannie and Freddie into “private” companies. It is not the case. To be a GSE means that you have private shareholders and a free government guarantee of your obligations: “The risk is 99% public and the profit is 100% private.”

By Alex J. Pollock & Edward J. Pinto.

Once again, we have efforts to release Fannie Mae and Freddie Mac from the conservatorship of the Federal Housing Finance Agency in which they have been confined for nearly 17 years—ever since the US Treasury did a 100 percent bailout of their creditors in 2008. Pros and cons are hotly debated relative to the proposed release of the twins that continue to rank among the largest systemically important financial institutions in the world.

The ongoing conservatorship means that the government has total control over these huge government-backed mortgage enterprises, with $7.7 trillion in combined assets. Since the bailout, the government has also been by far the biggest equity investor in them. Although they are often still called “GSEs” (“Government-Sponsored Enterprises”), in fact, while they are in conservatorship, they are not GSEs, but something very different: Government-Owned and Government-Controlled Enterprises. The proposed “release” transaction would give private shareholders control instead. Unfortunately, this could turn Fannie and Freddie back into GSEs, which would be a grievous mistake.

The US Treasury owns all the senior preferred stock of Fannie and Freddie; this stock has a combined liquidation preference of $341 billion as of December 31, 2024. This is more than twice their combined total book equity. In other words, not counting the government’s investment, Fannie and Freddie are deeply insolvent, and have been since 2008.

In addition, the Treasury owns warrants that give it the right to acquire new stock so that it owns up to 79.9 percent of Fannie and Freddie’s common stock for a minuscule exercise price. (The specific exercise price of the warrants is one-thousandth of one cent per share.) Exercising these warrants could give the Treasury a large profit, but they expire in September 2028, during the term of the current Trump administration. This gives the Treasury a duty to realize their value before they expire. Treasury could sell the warrants, exercise them, and then sell the stock, or exercise them and simply hold the stock along with the senior preferred stock.

To retire the government’s preferred and common equity stake would require a refinancing of massive scale, or a taxpayer gift from the US Treasury of tens of billions of dollars to Fannie and Freddie, or both.

The conventional narrative is that an exit from conservatorship would be a “privatization” and Fannie and Freddie would again become “private” companies. It is not the case. To be a GSE means that you have private shareholders, but you also have a free government guarantee of your obligations. As long as Fannie and Freddie have that free government guarantee, they will not be private companies, even if private shareholders own them.

As GSEs before 2008, the companies always enjoyed such a hugely valuable but free government guarantee. Because they did, no private company could successfully compete with them, and they were never private companies themselves. As our colleague Peter Wallison explained in his book, Hidden in Plain Sight, they were an unhealthy mix of socialized government risk and private profit.

The Essence of a GSE

Former Democratic Congressman J. J. Pickle of Texas pointedly summarized the GSEs: “The risk is 99% public and the profit is 100% private.” It was always said that the government guarantee of the GSEs was only “implicit,” but it was and is nonetheless fully and unquestionably real. This was definitively demonstrated by the Treasury’s $190 billion bailout of Fannie and Freddie in 2008, and the simultaneous creation of explicit government credit commitments during conservatorship. The bailout completely protected all of Fannie and Freddie’s creditors, even egregiously including the investors in their theoretically risk-absorbing subordinated debt. Creditors of GSEs are always saved by the government, and everybody knows it. The global sales of their securities and the credibility of the sponsoring government depend on it. To paraphrase the memorable words of a MasterCard commercial, what is the value of a free, unconditional, irrevocable, ever-greening line of credit from a sovereign creditor to an insolvent debtor? “Priceless,” the commercial said, but we calculate in the last section below the significant price that Fannie and Freddie should have to pay.

Pickle’s insight again fully applies to the new Fannie and Freddie “release” proposals and the ongoing debates of 2025. It displays the financial essence of a GSE: the immense value of the free government guarantee is a gift to the private shareholders, with little benefit to first-time homebuyers, as research has demonstrated. This obviously bad idea nonetheless has been supported by many politicians in the past. In their perennial search for a free lunch, they should not make the same mistake again.

The current debates must confront the fact that an ongoing government guarantee for Fannie and Freddie is an indispensable part of any “release” transaction. These fundamental questions and answers make that clear:

Question: Is Fannie and Freddie’s business model sustainable without a government guarantee?

Answer: No. Their business, their size in the bond market, their leverage, their access to credit risk-averse global investors, and their claim to lower mortgage interest rates all entirely depend on the government guarantee.

Question: As a practical business matter, can Fannie and Freddie exit conservatorship without the government guarantee?

Answer: No. The government guarantee would be always critical to their credit standing, but even more so immediately after their release from conservatorship.

Question: Could the government get out of its guarantee, even if it wanted to?

Answer: No. The government is locked in because Fannie and Freddie are “To Big to Fail” (TBTF), just like the largest banks. Indeed at $7.7 trillion and growing they are Far Too Big to Fail (FTBTF, we might say). No matter what the government may claim, the market will believe they are in fact guaranteed and the market will be correct.

Since no “release” deal is possible without a government guarantee, we arrive at this essential question:

Should Fannie and Freddie’s government guarantee be a free guarantee?

Answer: No. In line with Pickle’s point, public risk should not be turned into private profit. The government, and hence the taxpayers, should be fully and fairly remunerated for the risk and the cost of their massive guarantee. This will require legislation and Congress must make sure it is part of any “release” transaction.

Therefore, we must determine what the price of the government guarantee should be.

How Much Should a “Released” Fannie and Freddie Pay for Their Government Guarantee?

There are two components of the fee Fannie and Freddie should pay the Treasury for its guarantee. The total fee should be the same whether the guarantee is “implicit” or explicit, because it is equally real in both cases. These components are Risk and Current Cost.

The “Risk Fee” is today’s price for the possibility of having to cover future losses with future bailouts.

The “Current Cost to Treasury Borrowings Fee” is the offset for how much Fannie and Freddie cost the Treasury and the taxpayers by making Treasury notes and bonds more expensive. Higher interest rates for the Treasury on its own debt result from the competition that Fannie and Freddie’s massive $7 trillion in mortgage-backed securities create for investors who want US government credit.

The fee paid by Fannie and Freddie should be the sum of these two.

Considering the Risk Fee, we suggest that a close, relevant analogy is what the largest, TBTF banks have to pay the Federal Deposit Insurance Corporation (FDIC) for the implicit total government guarantee these banks receive. Like Fannie and Freddie, the real guarantee is for all the obligations of the TBTF bank; it is not just for the smaller amount of the formally guaranteed “insured deposits.”

Correspondingly and correctly, these banks are assessed FDIC fees on their total liabilities, not just the insured deposits. Likewise, Fannie and Freddie’s fee should be assessed on their total liabilities, or $7.6 trillion as of year-end 2024.

Unfortunately, we cannot see what the TBTF banks pay the FDIC, because although banks report FDIC premiums on their Call Reports, the FDIC removes them from the published version and keeps the numbers secret. But we can estimate an appropriate Risk Fee by analogy to the FDIC standards.

Fannie and Freddie certainly qualify as large and complex companies. As shown in the FDIC’s table of “Total Base Assessment Rates,” the corresponding “Initial Base Assessment Rate” for “Large & Highly Complex Institutions” is 5 to 32 basis points per year (a basis point is one-hundredth of 1 percent, or 0.01 percent). Multiplying this by $7.6 trillion in liabilities suggests a range for the Risk Fee for the combined Fannie and Freddie of $3.8 billion to $24 billion per year.

Where would Fannie and Freddie fall in the FDIC’s Large and Highly Complex range? Their risk is entirely concentrated in real estate credit, and their capital ratios are very low. Congress should ask the FDIC what it would hypothetically charge Fannie and Freddie to insure their liabilities. Congress might also ask Warren Buffett what price Berkshire Hathaway would charge for providing such insurance.

In the meantime, suppose as a starting point that with their concentrated real estate risk and little capital, Fannie and Freddie were 25 percent of the way from minimum to maximum, or about 12 basis points per year. That would be a Risk Fee of $9 billion per year, or about 25 percent of their combined 2024 pre-tax profits of $36 billion.

We present this estimate as a starting point for further discussion and analysis. But it is certain that the right Risk Fee is not zero.

Without doubt, the presence of trillions of dollars of Fannie and Freddie mortgage-backed securities in the market, competing with the US Treasury’s own debt for purchase by credit-risk averse investors, drives up the cost of Treasury debt and thereby increases the government’s deficits.

How much does this competition cost the Treasury? The answer is: a lot—an estimated 10 to 15 basis points on its $27.7 trillion of marketable debt, or from $29 billion to $43 billion a year. Over ten years, this imposes a $290 billion to $430 billion additional cost on the Treasury, without even compounding interest.

The estimate of the cost to the Treasury is from a February 2025 update by Amanda Dahl, Edward Pinto, and Tobias Peter that uses the Federal Reserve’s own estimates of the effect on Treasury debt yields of the Fed’s “QE” (Quantitative Easing) purchases of MBS, adjusting for current outstandings, relative proportions and conditions. The fundamental insight is that if the Fed’s taking MBS out of the market lowers the cost of Treasury’s term debt by a certain amount, putting that many MBS into the market will increase it by the same amount.

Taking the increased Treasury cost of $29 to $43 billion caused by Fannie and Freddie’s government-guaranteed MBS, and dividing this cost by their $7.6 trillion in liabilities suggests that Fannie and Freddie are enjoying a taxpayer subsidy of 38 to 57 basis points a year on their liabilities.

Let us take the middle of that range: 48 basis points. A Current Cost to Treasury Borrowings Fee of 48 basis points would just offset the increased cost Fannie and Freddie impose on the Treasury. That fee assessed on Fannie and Freddie’s $7.6 trillion in liabilities would be $36 billion, or 100 percent of Fannie and Freddie’s pre-tax profits. In short, the subsidy from the Treasury equals the totality of Fannie and Freddie’s profits.

The Total Fee

Adding the two components together gives us the total fee that Fannie and Freddie should pay the Treasury for their government guarantee:

On $7.6 trillion in liabilities, that would be $46 billion or 128 percent of their pretax profit. While others may have their own lower estimates, any legitimate Total Fee would constitute a significant portion of Fannie and Freddie’s pretax profit.* Needless to say, the private shareholders, present or future, would not like this outcome!

All these numbers speak to one truth: the essence of a GSE is to convert a free government guarantee and public risk into private profit. That should not happen again. Fannie and Freddie should pay for their government guarantee at a fair rate. If they can’t do that, they must remain stuck in the government. They should not be allowed to turn back into GSEs. Peter Wallison and Congressman Pickle, you were both so right!

* Supporters of Fannie and Freddie’s privatization would try to give them every benefit of the doubt. So, let’s take the lowest estimate of Current Cost to Treasury Borrowings Fee or 38 basis points and generously divide that in half—call it 19 basis points. In addition, suppose we drop the 12 basis point Risk Fee to 9 basis points, only 15 percent of the way from the minimum to the maximum on the FDIC’s “large and highly complex” range. The result is that, at the very least, Fannie and Freddie should pay 28 basis points or $21 billion per year for their government guarantee, which is still 58 percent of their pretax profit.

The article was authored by Alex J. Pollock, Senior Fellow at the Mises Institute, and Edward J. Pinto an American Enterprise Institute (AEI) senior fellow and director of AEI’s Housing Center. It was first published by Law& Liberty.

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Hiring Begins to Shift to Private-Sector where Hiring Jumped, while Hiring by Governments Slumped.

By Wolf Richter for WOLF STREET.

The circular relationship between quits, job openings, hires, and fires – the data released today – shows the churn in the labor market, in addition to growth aspects. And now it also begins to show a shift from government hiring to private-sector hiring.

Labor-market churn went wild in 2021 and 2022, when workers quit in huge numbers to jump to better jobs, thereby leaving behind large numbers of slots that had to be filled, and then a large number of hires to fill those left-behind job openings. This churn reshuffled the entire labor market, and many workers ended up with jobs that paid more and matched their skills better than before.

But starting in mid-2022, Corporate America, especially Big Tech, cracked down on churn and soaring wages with huge layoff announcements to scare the bejesus out of their employees and make them thankful they even still had a job. And worried workers quit quitting. So left-behind slots plunged, and job openings plunged, and hires to fill those job openings also plunged.

And the low-point of this new calm in the labor market was roughly in August to November, and since then quits, job openings, and hires have risen. But even at the point of peak-calm, job openings remained historically high, and layoffs and discharges remained historically low.

Quits – the number of people who voluntarily quit their jobs – declined by 61,000 in February from January, after a big jump in January, to 3.19 million, seasonally adjusted (blue).

The three-month average, which irons out the month-to-month squiggles and revisions, jumped by 54,000 in February to 3.18 million quits, the highest since September (red).

Quits remain below the levels of the tight job market in 2018 and 2019, attesting to a workforce that is still smarting from having gotten hit over the head with layoff announcements.

In terms of the trend, this is the first multi-month upturn in the three-month average since the peak in April 2022.

Job openings declined by 195,000 from upwardly revised jump in January (+254,000), seasonally adjusted, to 7.57 million openings. The low point was in September with 7.10 million openings (blue in the chart below).

The 7.57 million job openings are mostly to fill jobs left behind by quits, layoffs & discharges, and other discharges, such as retirements. The separately reported growth in nonfarm payrolls, coming this Friday, reflects the change in total nonfarm payrolls.

This data from the Job Openings and Labor Turnover Survey (JOLTS) by the Bureau of Labor Statistics today is based on surveys of about 21,000 work locations, and not on online job postings.

The three-month average job openings dipped in February to 7.61 million, after rising four months in a row from the low point in September (red).

The figure Powell cites a lot: The number of job openings per unemployed person dipped to 1.07 job openings for each person who was unemployed and looking for a job during the reference period (7.57 million openings for 7.05 million unemployed).

The low point was in September, when the Fed got spooked by the direction of the trend, but just then the trend changed.

Hires powered by the private sector: Hiring in the private sector rose by 46,000 in February from January to 5.05 million, seasonally adjusted. The low point for private-sector hiring was in June (4.76 million hires).

But government hiring fell by 21,000 to 350,000 hires.

The three-month average private sector hiring rose to 5.02 million. Its low point was in August (4.90 million).

Overall hiring, including government, rose by 25,000 to 5.40 million.

When quits started plunging in 2022, fewer jobs were left behind, job openings plunged, and fewer people needed to be hired to fill left-behind openings, and so hires plunged along with it. But all that has now settled down.

Layoffs and discharges powered by the government: These are workers who got fired with or without cause – a common feature of the US labor market – and workers who got laid off for economic reasons. It does not include retirements, deaths, etc., which are in the category of “other separations.”

Total layoffs and discharges in February rose by 116,000 in February from January, to 1.79 million.

Government layoffs and discharges jumped by 21,000 in February from January, to 99,000, the highest number of layoffs and discharges since the end of the Census-taking period in 2020 that occurs every 10 years.

The three-month average ticked up a hair after two months of big drops.

Despite the surge in government layoffs and discharges, total layoffs and discharges remain at the very low end of the prepandemic labor market.

Layoffs and discharges as percent of nonfarm payrolls ticked up to 1.07%, well below any time during the pre-pandemic years in the JOLTS data going back to 2001.

This ratio accounts for growing employment over the years and is the metric that really matters for a long-term view. It shows that layoffs and discharges are historically low compared to the size of nonfarm employment as employers are hanging on to their workers.

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ENB Pub Note: As a fundamental question to our readers: It would be great to get your opinion on repealing the Endangerment Finding of CO2 and it’s potential impact around the world for Carbon Capture or Carbon Tax markets. We have been tracking Carbon Taxing and their funds do not change behavior or lower the CO2 as they claim, so will the UK and the EU continue down the Net Zero and Carbon Tax methodology? Or will they look to other sources of funding for their programs? Let us know your thoughts on the Energy News Beat Substack.

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EPA’s 2009 Endangerment Finding ignored key realities—its repeal could upend climate regulations, energy policy, and the green agenda.

​The supposed climate cataclysm consensus is disintegrating under growing pressure from reality. Green energy subsidies, regulations, and mandates are crumbling. [emphasis, links added]

Greenpeace has been hit with a $667 million judgment for conspiracy, defamation, trespass, and fostering arson and property destruction.

Last year’s “Buy a Tesla – save the planet” placards have been exchanged for “mostly peaceful” protests based on “Torch a Tesla – save our democracy” and infernos of toxic pollution and “carbon” emissions.

Even higher anxiety is battering climate activists as EPA head Lee Zeldin reviews the agency’s 2009 “Endangerment Finding” (EF) – the foundation and justification for restrictive Obama and Biden-era standards and regulations on permissible electricity generation, automobiles, furnaces, home appliances, and much more.

Humans and animals exhale carbon dioxide when they breathe, combustion processes also emit carbon dioxide (CO2), and during photosynthesis, plants absorb CO2 and emit oxygen.

More atmospheric CO2 helps plants grow better, faster, and with less water. Nearly all life on Earth depends on this process. It’s basic science.

That’s why the Clean Air Act doesn’t include CO2 in its list of dangerous pollutants, along with carbon monoxide, lead, nitrogen dioxide, ground-level ozone, particulates, and sulfur dioxide.

But fossil-fuel-hating activists blame CO2 for the alleged “climate crisis” – and in Massachusetts v. EPA the US Supreme Court said EPA could regulate CO2 emissions if the agency found that they “cause or contribute” to “air pollution” that may be “reasonably anticipated” to “endanger public health or welfare.”

The Obama EPA quickly determined that they did and issued an Endangerment Finding that gave the agency effective control over America’s energy, transportation, industries, furnaces, and stoves– indeed, over almost every facet of our lives and living standards – to help “fundamentally transform” the nation.

In formulating its decision, the EPA did no research of its own, relied heavily on GIGO computer models and outdated technical studies, dismissed the clear benefits of rising atmospheric CO2 levels, and ignored studies that didn’t support its decision.

EPA even told one of its in-house experts (who had offered evidence and analyses contradicting official claims) that “the administration has decided to move forward [on implementing the EF] and your comments do not help the legal or policy case for this decision.”

That alone is a compelling reason for reversing the Endangerment Finding. But other realities also argue convincingly that EPA’s 2009 action should be nullified.

First, Massachusetts v. EPA has been sidelined, rendered irrelevant, or effectively reversed.

The process EPA used in rendering its predetermined finding demonstrates how little actual science played a role.

West Virginia v. EPA (2022) ruled that federal agencies may not violate the “major questions doctrine,” which holds that, in the absence of clear congressional direction or authorization, agencies may not make decisions or issue regulations “of vast economic and political significance.”

The Obama EPA had no clear congressional language or authorization to declare that CO2 was a pollutant that would likely “endanger public health or welfare.”

The Supreme Court’s minimal guidance in Massachusetts underscores the absence of congressional intent or direction.

The process EPA used in rendering its predetermined finding demonstrates how little actual science played a role. The enormous significance and impact of the EF decision and subsequent regulations can hardly be disputed.

Similarly, the SCOTUS 2024 ruling in Loper Bright v. Raimondo overturned the court’s 1984 decision in Chevron v. NRDC and ended judicial deference to government agencies (the “Chevron doctrine”).

Bureaucrats may no longer devise “reasonable interpretations” of unclear statutory language if those interpretations would significantly expand regulatory powers or inflate private sector costs.

These two decisions mean the EPA had no authority to convert plant-fertilizing, life-giving carbon dioxide into a dangerous, health-threatening pollutant.

Second, reams of post-2009 studies and analyses show that CO2 is hugely beneficial to forests, grasslands and croplands – and that CO2 and other greenhouse gases (GHGs) have not replaced the powerful, complex, interconnected natural forces that have always driven global warming, climate change, ice ages, Little Ice Ages, and extreme weather events.

The EPA ignored this in 2009.

Others demonstrate that there is no climate crisis, nothing unprecedented in today’s climate and weather, and nothing modern industrialized societies cannot cope with far more easily than our ancestors did.

(See Climate Change Reconsidered II, CO2 Coalition studies, NOAA hurricane history, US tornado records, and studies the Trump EPA will undoubtedly consult during its EF reconsideration.)

Third, our energy, jobs, living standards, health, welfare, national security, and much more depend on fossil fuels – for energy and for pharmaceuticals, plastics, and thousands of other essential products that are manufactured using petrochemical feedstocks.

Fourth, China, India, and other rapidly developing nations also depend on fossil fuels – and are increasing their coal and petroleum use every year – to build their industries and economies and improve their people’s health and living standards.

They are not about to stop to appease those who insist the world faces a climate crisis. That means that even eliminating coal, oil, gas, and petrochemical use in the United States would have no effect on global GHG emissions.

Finally, the primary threats to human and planetary health and welfare come not from using fossil fuels but from eliminating them, trying to switch to “clean, green, renewable” energy, and no longer having vital petrochemical products.

As Britain and Germany have shown, switching to intermittent, weather-dependent wind and solar energy with backup power raises electricity prices to 3-4 times what average Americans currently pay.

Industries cannot compete internationally, millions lose their jobs, living expenses soar, and families cannot afford to heat their homes in winter or cool them in summertime.

Thousands die unnecessarily every year from heatstroke, hypothermia, and diseases they would survive if they weren’t so hot, cold, or malnourished.

In poor countries, millions die annually from indoor pollution from wood and dung fires, from spoiled food due to lack of refrigeration, from contaminated drinking water due to the absence of sanitation and treated water, and from diseases that would be cured in modern healthcare systems.

The common factor in all these deaths is the absence of reliable, affordable energy, largely imposed by climate-focused bureaucrats who finance only wind and solar projects in poor nations.

Wind and solar power, electric vehicle and grid-backup batteries, and associated transmission lines require metals and minerals mining and processing on unprecedented scales, power-generation facilities blanketing millions of acres of croplands and wildlife habitats, and the disposal of gigantic equipment that breaks or wears out quickly and cannot be recycled.

Reliance on wind, solar, and battery power also means blackouts amid heat waves and cold spells, cars stalled in snowstorms, and hurricane evacuations – and thus still more deaths.

A slightly warmer planet with more atmospheric CO2 would be greatly beneficial for plants, wildlife, and humanity. A colder planet with less carbon dioxide would significantly reduce arable croplands, growing seasons, wildlife habitats, and our ability to feed humanity.

EPA’s 2009 Endangerment Finding ignored virtually all these realities. EPA Administrator Lee Zeldin’s reexamination of that decision must not repeat that mistake.

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Paul Driessen is senior policy analyst for the Committee For A Constructive Tomorrow (www.CFACT.org) and author of books and articles on energy, climate change, economic development, and human rights.

Source: Climatechangedispatch.com

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The United States exported 11.9 billion cubic feet per day (Bcf/d) of liquefied natural gas (LNG) in 2024, remaining the world’s largest LNG exporter. LNG exports from Australia and Qatar—the world’s two next-largest LNG exporters—have remained relatively stable over the last five years (2020–24); their exports have ranged from 10.2 Bcf/d to 10.7 Bcf/d annually, according to data from Cedigaz. Russia and Malaysia have been the fourth- and fifth-largest LNG exporters globally since 2019. In 2024, LNG exports from Russia averaged 4.4 Bcf/d, and exports from Malaysia averaged 3.7 Bcf/d.

U.S. LNG exports remained essentially flat compared with 2023 mainly because of several unplanned outages at existing LNG export facilities, lower natural gas consumption in Europe, and very limited new LNG export capacity additions since 2022. In December 2024, Plaquemines LNG Phase 1 shipped its first export cargo, becoming the eighth U.S. LNG export facility in service. We estimate that utilization of LNG export capacity across the other seven U.S. LNG terminals operating in 2024 averaged 104% of nominal capacity and 86% of peak capacity, unchanged from the previous year. While Europe (including Türkiye) remained the primary destination for U.S. LNG exports in 2024, accounting for 53% (6.3 Bcf/d) of the total exports, the share of U.S. LNG exports to Asia increased from 26% (3.1 Bcf/d) in 2023 to 33% (4.0 Bcf/d) in 2024. U.S. LNG exports to other regions, including the Middle East, North Africa, and Latin America, also increased last year and accounted for 14% (1.6 Bcf/d) of total exports, compared with 8% (0.9 Bcf/d) in 2023.

In 2024, U.S. natural gas exports to Europe decreased by 19% (1.5 Bcf/d), mostly to countries in the EU and the UK. U.S. LNG exports increased only to Türkiye and Greece in 2024—by 0.2 Bcf/d and 0.1 Bcf/d, respectively, compared with 2023. Türkiye imported more U.S. LNG compared with the prior year mainly to offset a decline in imports from other countries, such as Egypt and Russia. U.S. LNG exports to other EU countries and the UK decreased by 24% (1.7 Bcf/d) compared with 2023, primarily because of lower natural gas consumption and high storage inventories following the mild 2023–24 winter. At the same time, LNG import capacity in the EU and the UK expanded by more than 40% between 2021 and 2024 and will continue to grow in 2025 once new and expanded regasification facilities in Croatia, Cyprus, and Italy come online.

As in 2023, the Netherlands, France, and the UK imported the most U.S. LNG among countries in Europe, accounting for a combined 46% (2.9 Bcf/d) of the regional total. Since Germany started LNG imports in December 2022, U.S. LNG exports to Germany have grown and averaged 0.6 Bcf/d in both 2023 and 2024. However, in early 2025, Germany reduced its regasification capacity by terminating a charter for one of its floating storage and regasification units, citing high operational costs.

In 2024, countries in Asia imported 33% (4.0 Bcf/d) of total U.S. LNG exports. Among countries in Asia, Japan, South Korea, India, and China imported the most U.S. LNG—a combined 76% (3.0 Bcf/d). U.S. LNG imports increased the most in India—by 0.2 Bcf/d. Other countries in Asia imported 24% (1.0 Bcf/d) of U.S LNG.

In other regions, Egypt—a natural gas producer and LNG exporter—imported 0.3 Bcf/d of LNG from the United States, its first U.S. LNG imports since 2018. In recent years, Egypt’s domestic natural gas consumption, particularly in summer months, exceeded available supply and turned Egypt from an exporter to an importer of natural gas during several months of the year. In Brazil and Colombia, imports of U.S. LNG increased last year because drought reduced hydropower electricity generation and increased demand for generation from natural gas-fired power plants.

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Energy News Beat

Williams announced on Tuesday the commissioning of the Southeast Energy Connector in Alabama and the Texas to Louisiana Energy Pathway along the Gulf Coast.

The Texas to Louisiana Energy Pathway project expands Transco’s capacity in Texas and Louisiana by 364 million cubic feet per day (MMcf/d) to support “reliability and diversification of energy infrastructure along the Gulf Coast, a growing demand center for domestic needs and LNG export activity,” the firm said.

Moreover, the Southeast Energy Connector supports the conversion of electric power generation in Alabama from coal to natural gas and provides 150 MMcf/d of natural gas to meet the area’s “clean” energy needs.

Williams said natural gas is “critical” to reducing carbon emissions and providing the flexibility needed to support a growing renewables component in power generation.

The completed expansions follow recent record-breaking natural gas transmission volumes.

Transco recorded 19 of the 20 highest-volume days ever this past winter, driven by a combination of heating, electric power generation loads, and LNG exports along the Transco corridor, it said.

Williams owns and operates Transco, a 10,000-plus-mile natural gas transportation system extending from South Texas to New York City.

The US is the world’s largest LNG exporter.

Currently, the US exports LNG via Cheniere’s Sabine Pass and Corpus Christi terminals, Venture Global’s Calcasieu Pass and Plaquemnes LNG facilities, Sempra Infrastructure’s Cameron LNG terminal, the Freeport LNG facility, the Cove Point LNG facility, and the Elba Island terminal.

Two new LNG export facilities—Plaquemines LNG Phase 1 and Corpus Christi Stage 3—started LNG production in December 2024.

 

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Energy News Beat

ENB Pub Note: Excellent Article from RBN Energy – I recommend following them and checking out their articles: In Texas and Louisian Gulf Coast, we need the six new pipelines for LNG and Natural Gas takeaway. Without the pipelines, it would be tough to maintain the demand for gas flow for AI, data centers, and new LNG export trains. We will be covering this on tomorrow’s podcast, and it’s crucial impact on the Texas ERCOT Grid. 

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Over the next couple of years, six new pipelines and expansion projects will bring 11.8 Bcf/d of incremental natural gas supplies to the Texas/Louisiana Gulf Coast. During the same period, more than 8 Bcf/d of new LNG export capacity will move that gas to international markets. The impact of this onslaught of gas flows will be anything but orderly. Inflows will never equal outflows. Pipes will arrive early with supplies, with LNG terminals coming along later. Gas flows will shift from west to east, and north to south, in chaotic patterns that will upend historical price relationships. Is there any way to make sense of all this? There sure is, as we discuss in today’s RBN blog. All you need is the right arrow pointing the way.

Fast-rising gas production in the Permian, growth potential in the Haynesville and Eagle Ford, and the rapid buildout of new gas pipelines and LNG export capacity make this a particularly exciting — and challenging — time for gas market players in Texas and Louisiana. One thing is clear: With so much going on, it’s never been more important to have a solid understanding of how the market will evolve, month by month and year by year, as all this new infrastructure comes online. Why? Because the new pipeline capacity and liquefaction trains will have continually changing impacts not only on gas flows throughout the two-state region but on gas basis at every hub.

With all that in mind, RBN has developed — and now made available for our subscription customers — the Arrow Model, which (1) aggregates gas production, demand and net outflows or inflows for each market hub over time; (2) quantifies the degree to which gas is pushed/pulled between and among hubs, again over time; (3) anticipates gas flows on each corridor (and the need for incremental pipeline capacity); and (4) forecasts the basis differentials that underlie and support the aforementioned flows of gas.

We’ll get to the details in a moment, but first a quick summary of where things stand today — and how much things will change over the next two years or so. Permian gas production exceeds 21 Bcf/d, Haynesville and Eagle Ford E&Ps are poised to increase their output, and new pipelines (and pipeline expansions) from production areas to the Gulf Coast (and along the coast) are in the works, including the 2.5-Bcf/d Blackcomb Pipeline (dashed red-and-black line in Figure 1 below) from Waha to Agua Dulce, the 1.5-Bcf/d Hugh Brinson Pipeline (dashed blue-and-black line) from Waha to the Dallas/Fort Worth area, and the 1.5-Bcf/d Trident Pipeline (dashed orange-and-black line) from the Katy, TX, hub to Sabine Pass. And that’s just the supply side of the equation. After a pause in LNG capacity additions last year, Plaquemines LNG is increasing its output and several new LNG export projects are slated to come online, starting with Corpus Christi LNG Stage III (the first element of which is already sending out LNG) and followed in short order by Golden Pass LNG (Sabine Pass), Rio Grande LNG (Brownsville, TX) and Port Arthur LNG (see dash-bordered diamonds). These projects will add 6.9 Bcf/d of gas demand by mid-2027 and another 4.1 Bcf/d by 2030, dramatically altering regional gas flows as they do.

Figure 1. Selected Gas Pipelines and LNG Terminals in Texas and Louisiana. Source: RBN

 

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Energy News Beat

Coal’s ‘death’ was exaggerated as demand surges, Trump backs ‘clean coal,’ and China dominates, while UK clings to net zero despite energy realities.

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The death of coal, held to be the eldest and ugliest of the three fossil fuel siblings, has long been exaggerated Mark Twain-style. [emphasis, links added]

While oil and natural gas needed to be tolerated for some time in the “energy transition”, dirty coal — responsible for soot, smog, and respiratory disease — was already beyond the pale for many decades in most Western developed countries.

The latest twist in this tale of a death exaggerated starts with a Guardian story on Monday last week. In his trip to China — the world’s largest coal consumer by far, and with no letup in sight — the UK Secretary of State for Energy Security and Net Zero Ed Miliband “is hoping to shape a new global axis in favour of climate action along with China and developing countries, to counter Donald Trump’s abandonment of green policies in the US.”

Then, on Saturday, the Daily Mail reported that Miliband “admits his solar panels bought for English schools and hospitals are Chinese and may be made using coal.”

The hubris and the irony leap out.

The birthplace of coal and the industrial revolution and which once “ruled the waves” of 70% of the globe, Great Britain closed its last coal plant last year. It is number 22 on the list of the world’s largest CO2 emitters, accounting for a puny 0.8% of global emissions.

This pales in comparison to China at number one, spewing out 34% of the world’s emissions, and to the US, the next largest emitter, at 12%.

Apparently, “Mad Ed”, with his folly of climate leadership, still believes that the sheer illustrative example of a net-zero ‘green’ UK will lead the world into ditching fossil fuels.

As my colleague Ben Pile said pithily of Mr. Miliband’s China visit, “Don’t make me laugh.” In an oft-cited statistic, China builds an average of two coal power plants a week.

Meanwhile, in the latest sign that all is not well in the climate policy consensus between the two main parties in Parliament, leader of the Tory opposition Kemi Badenoch said in a speech (also on Monday last week) that net zero cannot be achieved by 2050 “without a serious drop in our living standards or by bankrupting us.”

The irony of calling for a “green industrial revolution” with solar and wind panels, batteries, and electric vehicles, which are largely themselves made with cheap Chinese coal power, seems to be beyond Miliband’s mental grasp.

Import reliance on China under the dictatorship of the CCP also seems to be of less concern to him than the alternative. God forbid dependence on foreign oil and gas imports: cue “geopolitical shocks” and the “whims of foreign tyrants”.

Never mind that the largest suppliers of oil and gas to the UK are Norway, the US, and Qatar, now that ‘climate leader’ Great Britain has barred itself from exploiting its own ample domestic oil and gas resources in the North Sea and onshore sites.

But leaving aside the hubris and irony, there was a final twist to coal’s exaggerated death narrative last week. On the same day that the Guardian wrote about Miliband’s noble goal of getting China on side in the “fight against climate change”, President Trump came out in Truth Social:

After years of being held captive by Environmental Extremists, Lunatics, Radicals, and Thugs, allowing other Countries, in particular China, to gain tremendous Economic advantage over us by opening up hundreds of all Coal Fire Power Plants, I am authorizing my Administration to immediately begin producing Energy with BEAUTIFUL, CLEAN COAL.

Far From Death, Coal is in Rebirth

A source of dirty soot, smog, and adverse respiratory health in urban areas, coal was the classic sunset industry in the West. But local politics and swing states matter in US elections, as failed presidential-hopeful Hillary Clinton found out to her cost in 2017.

She claimed her biggest regret was doubling down on ex-President Obama’s “war on coal” and proclaiming on her campaign trail that “we’re going to put a lot of coal miners and coal companies out of business.”

At the national level, the extraordinary surge in projected electricity demand driven by exponential growth in AI, data centres, and crypto-mining has taken centre stage.

In a video interview on the sidelines of the CERAWeek energy conference in Houston two weeks ago, US Interior Secretary Doug Burgum said that the country should restart shuttered coal-fired power plants under President Donald Trump’s national energy emergency declaration:

“I think as part of the national energy emergency which President Trump has declared we’ve got to keep every plant open. And if there have been units at a coal plant that have been shut down, we need to bring those back on.”

The Interior Department said in an email to Reuters it was committed to “revitalizing the coal industry through the reduction of regulatory barriers and the promotion of energy independence.”

Secretary Burgum said, “We got to keep every coal plant open…. there is no Energy Transition but Energy Addition…we need to avoid the mistakes made by the UK and Germany of deindustrializing…we need abundant, reliable, low-cost energy.”

…snip…

Coal Reclaims Its Throne

Coal is what physicists call a “dense” energy source. A Tesla battery weighs over 500kg and requires 25-50 tons (i.e., thousands of kgs) of minerals to be mined, processed, and transported.

Yet, the Tesla battery’s stored energy is equivalent to a mere 30kg sack of coal. That sack of coal, of course, is cheap, versatile, and readily transportable.

And the Tesla battery merely stores power, you still have to get the electrons from elsewhere.

Unlike oil and natural gas, coal is a “non-political” fuel. It is the world’s most abundant energy resource. Its deposits are spread widely, if unevenly, around the world.

Its biggest exporters [ranked] are Indonesia, Australia, Russia, the US, Colombia, and Canada. In Asia, China, India, Vietnam, and Indonesia are among the world’s largest consumers of coal and its largest producers. They depend heavily on it for their energy and, hence, national security.

Coal, commonly vilified for being the dirtiest fossil fuel, is in fact, a success story of scientific progress. Key pollutants from coal combustion in power generation plants have fallen dramatically with technological improvements over the past several decades with the development of high-efficiency, low-emission plants.

These 4th-generation “ultra-supercritical” plants have dramatically reduced emissions of pollutants that adversely affect human health, including carbon monoxide, lead, sulfur dioxide (by 98%), oxides of nitrogen (83%), ground-level ozone, and particulate matter (99.8%).

The major remaining emission by coal power plants, carbon dioxide, contrary to common perception, is not a pollutant. Indeed, it is vital to plant growth and, hence, human life.

Consistent with President Trump’s caps-on remarks on “BEAUTIFUL, CLEAN COAL”, Environmental Protection Agency Administrator Lee Zeldin has requested permission from the White House to reverse the 2009 “Endangerment Finding” that allowed the EPA to regulate carbon dioxide as a “health threat” during the Obama and Biden years.

Read full post at Tilak’s Substack

 

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Energy News Beat

Rep. Scott Perry’s bill aims to abolish the RFS, arguing it harms the environment, raises gas prices, and doesn’t reduce our reliance on foreign oil.

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Rep. Scott Perry (R-PA) on Friday proposed legislation that would abolish the renewable fuel standard (RFS), believing it has only harmed the environment and raised gas prices. [emphasis, links added]

The Keystone State conservative unveiled the Eliminating the RFS and Its Destructive Outcomes Act, which he believes may help relieve inflationary pressure of gas prices.

“Eliminating the RFS is a vital step in preserving these essential jobs and reducing inflationary pressures,” Perry said in a written statement to Breitbart News. “By removing this mandate, we can curb the rising costs that are stretching household budgets to their limits.”

“While the RFS was intended to foster the use of environmentally friendly fuels, the environmental benefits of ethanol, particularly in replacing gasoline, are highly questionable. When evaluating the full environmental impact of increased corn production – including the water, land, and energy resources required – it becomes clear that the RFS has produced net negative environmental consequences,” he continued.

The Environmental Protection Agency (EPA) has noted that Congress created the RFS to reduce greenhouse gas emissions and expand the renewable fuels sector while reducing reliance on imported oil.

The RFS program requires a certain volume of renewable fuel to be used to replace the quantity of fossil fuels in transportation fuel, home heating, or jet fuel.

However, Perry’s office has argued that the RFS has failed to reduce dependence on foreign oil and promote environmentally friendly fuel alternatives.

The Heritage Foundation has noted how the use of corn-based ethanol in gasoline has only raised feed prices for cattle and poultry farmers and diverts valuable farmland from other agricultural uses:

Even within the mandate, we’re relying on cheaper biofuels from foreign sources to meet the requirements. The U.S. consumed 2.85 billion gallons of biodiesel in 2016 while producing only 1.568 billion gallons of biodiesel in 2016. Over 708 million gallons were imported in 2016, with 448 million gallons imported exclusively from Argentina.

Practically one-quarter of all biodiesel consumed in the U.S. in 2016 was imported from other countries. An overall net exporter of ethanol last year, the U.S. was a net importer of biodiesel.

“Once hailing biofuels as an important tool to mitigate climate change, the U.N.’s 2007 Intergovernmental Panel on Climate Change’s report acknowledged that biofuel policy negatively impacts the lives of the poor, diverts land to produce biofuels, has adverse environmental and climate consequences,” the Heritage Foundation wrote in another paper.

Ethanol in gasoline also tends to contain about 30 percent less energy per unit volume than gasoline, may contain more fuel contaminents than gasoline, and may even damage small engines and older cars.

Read more at Breitbart

 

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Energy News Beat

South Korean yards have 276 LNG carriers worth $71.3 billion on order, according to the newest data by Veson Nautical’s VesselsValue.

Within the South Korean orderbook, the LNG sector is the most valuable, accounting for around 52 percent of the total South Korean orderbook value, and this sector also has the highest volume of orders, VesselsValue said.

LNG carrier shipbuilders are Hanwha Ocean, HD Hyundai yards, and Samsung Heavy.

In total, the South Korean orderbook includes 806 vessels worth $138.24 billion, the report shows.

Container vessels rank second with a market value of $35.6 billion—equating to a share of c.26 percent and 184 vessels on order.

Moreover, the LPG sector ranks third with a value of $14.9 billion and 129 vessels on order, closely followed by the tanker orderbook which is valued at $14.7 billion.

Tankers surpass both LPG and container vessels in volume with 185 vessels scheduled to be built, while car carriers rank fifth with a value of $929 million and a total of eight vessels on order.

VesselValue said France’s CMA CGM is in first place with a total of $8.09 billion on order, and they have the highest volume of orders consisting exclusively of 38 container vessels.

In second place, Japan’s NYK has a total of $7.21 billion on order, which includes 26 174,000-cbm LNG vessels and three VLACs of 88,000 CBM.

In addition to these vessels on order in South Korea, NYK has a further 56 vessels on order in Chinese, Japanese, and German yards, including additional orders for LNG, LPG orders, bulkers, and tankers, VesselsValue said.

Qatar Gas Transport, or Nakilat, ranks third in value with an orderbook worth $6.9 billion, consisting of 29 vessels, primarily LNG carriers.

Moreover, VesselsValue said QatarEnergy is ranked fourth with an orderbook value of $6.52 billion, consisting of 25 large LNG vessels.

With a total orderbook value of $6.38 billion, Taiwan’s Evergreen Marine ranks fifth. The 28 vessels on order are all containers of 15,372 – 15,500 TEU or ULCVs of 24,000 TEU.

They are followed by Japan’s MOL with an orderbook value of $5.62 Bn and a total of 26 vessels on order, VesselsValue said.

Of the vessels on order in South Korea, approximately 37 percent are being fitted with dual-fuel capabilities, with a market value of $71.4 billion, the report said.

With the exception of LNG carriers, which will always be dual fuel, this includes all vehicle carriers and Ro-Ro’s, VesselValue said.

Also, the second highest percentage is the container sector, where 148 dual-fuel vessels have been contracted, equating to c.80 percent of the orderbook.

Approximately 50 percent of the LPG orderbook, or 64 vessels, will be built as dual fuel, with a market value of $7.5 billion, the report said.

 

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