Energy News Beat

The Biden administration needs help understanding the meaning of “foreign entity of concern” (FEOC) as this term relates to investing billions of taxpayer dollars into bolstering the supply chains for materials critical to electric vehicles and renewable energy.

The Bipartisan Infrastructure Law and Inflation Reduction Act allotted billions of dollars for establishing secure and reliable supplies for the minerals, metals, and materials needed for EVs and low-carbon energy infrastructure in the United States.

Congress included stipulations in these bills that require energy transition minerals to be mined or processed in the U.S. or a free trade agreement country, and prohibits the involvement of an FEOC in order to qualify for the generous tax credits and funding offered.

Earlier this year, S&P Global analysts forecast that the U.S. would come up short of the minerals and metals required to meet Biden administration energy transition goals.

“This new comprehensive analysis shows that the Inflation Reduction Act is indeed transformative on the demand side,” said S&P Global Vice Chairman Daniel Yergin. “However, challenges remain in securing supply of critical minerals needed to meet growing demand and achieve its goal of accelerating the energy transition.”

These challenges include U.S. permitting timelines that are much too long to fit within the White House’s clean energy ambitions.

“Timely and transparent permitting is a fundamental operational challenge to supplying metals for the energy transition, particularly in developed markets such as the United States that have high levels of transparency and both political and civil society scrutiny of policy,” said S&P Global Market Intelligence Executive Director Mohsen Bonakdarpour.

Loosening up the definition of FEOC would broaden the scope of critical mineral suppliers that meet BIL and IRA eligibility.

“This smacks of regulatory overreach and purposeful misinterpretation of the Bipartisan Infrastructure Law (BIL), designed to ‘bolster the growth of domestic and friend-shored battery materials processing and manufacturing,” Ann Bridges, co-author of “Groundbreaking! America’s New Quest for Mineral Independence”, told Metal Tech News.

Reinterpreting Congress

When drafting the Bipartisan Infrastructure Law, Congress described an FEOC as being “owned by, controlled by, or subject to the jurisdiction or direction of a government of a foreign country that is a covered nation.”

Covered nations include China, North Korea, Russia, and Iran.

Now, DOE is seeking input on its reinterpretation of the terms “government of a foreign country;” “foreign entity;” “subject to the jurisdiction;” and “owned by, controlled by, or subject to the direction.”

Using Merriam-Webster definitions of the keywords that DOE is seeking to reinterpret, an FEOC is defined as: An organization, business, or governmental unit owned by; restrained or directed by; subject to the authority of; or under the restraining or directing influence of China, North Korea, Russia, or Iran.

The Biden administration, however, is not seeking a literal definition of what Congress wrote into the Bipartisan Infrastructure Law and Inflation Reduction Act.

Instead, DOE has rolled out its own proposed “interpretive guidance” for a foreign entity of concern.

Under this guidance, an FEOC would be incorporated in, headquartered in, and operating within China, North Korea, Russia, or Iran; and the government of the covered nation also directly or indirectly controls at least 25% of the company’s voting or equity interests or board seats.

Companies that operate outside of China, North Korea, Russia, or Iran but contract with or license technology from any of these nations must retain certain rights over their operations.

“The proposed guidance will provide clarity and certainty to the U.S. automakers, battery manufacturers and producers of critical minerals. It will encourage these industries to invest in diversified and resilient critical mineral and battery supply chains,” said John Podesta, who is serving as renewable energy advisor to the White House.

The guidance will also temporarily exempt certain critical minerals from FEOC restrictions altogether. The Treasury Department, which is working with the Internal Revenue Service to implement EV tax credits subject to FEOC stipulations, said the exemptions only account for 2% of materials used in batteries.

Green energy shove

Silicon Valley author and critical minerals expert Bridges contends that the White House is attempting to circumvent the domestic energy materials sourcing rules intended by Congress to push forward the administration’s own clean energy plan.

“Biden’s Department of Energy is once again muscling aside Congress’ intent, representing both Democrats and Republicans, in a last-minute effort to shove through a green agenda that consumers don’t want, our country can’t afford, for technology simply isn’t ready yet for large-scale deployment,” she wrote in an email to Metal Tech News.

“The appropriate department to determine which country is a Foreign Entity of Concern seems to fall squarely in the Department of State instead – and requires CFIUS (Committee on Foreign Investment in the United States) review, too,” she added.

DOE has published its proposed interpretation of the statutory definition of FEOC on the National Register for 30 days of public comment before official adoption.

1031 Exchange E-Book

ENB Top News 
ENB
Energy Dashboard
ENB Podcast
ENB Substack

 

The post DOE redefines foreign entity of concern – EV confusing regulations just got no help appeared first on Energy News Beat.

 

Energy News Beat

Imagine if nearly half of New York City lost heat for months during the winter. That’s not the plot of a new survival drama. Such a catastrophe nearly occurred last Christmas, according to an alarming recent report by energy regulators that deserves more attention.

The Federal Energy Regulatory Commission (FERC) and the North American Electric Reliability Corporation last month published a 168-page review of the electricity and natural gas problems during winter storm Elliott last December. It was the fifth time in 11 years that power plant failures caused by cold weather jeopardized grid reliability.

At the same time demand for electricity to heat homes ramped up, many gas generators failed for technical reasons or lack of fuel. Hundreds of thousands of Americans in the southeastern U.S. lost power on Christmas Eve while millions more were urged to conserve power.

It “is especially disconcerting that it happened in the Eastern Interconnection which normally has ample generation and transmission ties to other grid operators that allow them to import and export power,” the report notes. Yet problems cascaded through the eastern U.S.’s interdependent energy systems, which nearly caused New York City’s gas distribution to collapse.

A particular problem was that wells in the Marcellus and Utica shale deposits that supply much of the eastern U.S. with natural gas froze, reducing production by 23% to 54%. While gas supply fell, demand for electricity and heating surged, causing the pressure in interstate pipelines that supply downstate New York to plunge.

New York City utility Con Edison, “given its downstream location near the end of the interstate pipelines, was disproportionately impacted by the deteriorating pipeline conditions, through no fault of its own,” the report says. To restore pipeline pressure, Con Edison curtailed gas to some customers and activated a liquefied natural gas regasification plant.

Otherwise, Con Edison “could have faced an unprecedented loss of its entire system that, in this worst case scenario, would have taken months to restore, even with mutual assistance” while customers “would have been unable to heat their apartments and houses while the outside temperature was in the single digits, for months,” the report says.

Winter storms happen, but U.S. energy systems are becoming less resilient as coal and nuclear power plants shut down owing to competition from heavily subsidized green energy and cheaper natural gas. While gas power is more reliable than wind and solar, icy winter conditions can still cause fuel shortages.

Allowing shale fracking in upstate New York might have mitigated the gas supply shortage at the margin, but former Gov. Andrew Cuomo blocked that. The climate lobby’s antidote is electric heat pumps, but that would have increased strain on an already stressed grid. If New York City relied mostly on electricity for heat, millions could have lost both power and heat during the arctic blast. How’s that for a zombie apocalypse?

The New York Independent System Operator reported this week that the Empire State would need to rely on power plants that can switch to burning oil during the winter into the next decade owing to gas shortages and lulls in offshore wind. Another problem: “EV charging load is higher on colder days due to reduced battery efficiency and reduced EV range in cold temperature.”

You’d think all this would be news given the growing risks of grid failure, but such talk is taboo among those who want the U.S. economy to run solely on electricity driven by wind and solar energy. Don’t say New Yorkers weren’t warned.

Source: WSJ

1031 Exchange E-Book

ENB Top News 
ENB
Energy Dashboard
ENB Podcast
ENB Substack

The post New York’s Near Zombie Apocalypse appeared first on Energy News Beat.