Germany Has Traded Austerity for a Mess

Energy News Beat

The German government has finally revised its debt rules—by making them more confusing.

By Philippa Sigl-Gloeckner, the managing director of Dezernat Zukunft, a German macrofinance think tank.

On Tuesday, March 18, the German parliament ended the country’s economic Sonderweg, or “unique path.” On that day, two-thirds of members voted for a far-reaching change of the fiscal constitution. Technically, the debt brake—Germany’s constitutionally codified fiscal rule—is still in place. But from now on, defense expenditures exceeding 1 percent of GDP will be exempted from the deficit ceiling; infrastructure and climate related expenditures can be financed from a special fund, which is also exempted from the debt brake; and states also get additional fiscal space.

From a financial perspective, the package is great. It will finally allow the federal government to remedy the fiscal sins of the past 40 years, including spectacular underinvestment and the abuse of the defense budget as a piggy bank for achieving balanced budgets.

But the convoluted agreement is also the most German possible solution to the very German problem of self-imposed austerity. Since 2009, the constitutional debt brake has limited “structural” deficits—the country’s permanent borrowing—to 0.35 percent of its GDP. Unless interest rates are exceptionally low, this requires a primary surplus—that is, the government would have to save money before accounting for its interest payments.

The country is now trying to get out of this fiscal straitjacket. But instead of passing a reasonable debt brake reform, officials have opted to negotiate a complex fiscal package and then stick it directly into the German Constitution. The provisions of the package are a carefully calibrated political deal and thus have nothing to do with what any constitution is actually for: specifying fundamental rules for society and government.

The package includes numerous subrules, which both enlarge and shrink fiscal space according to the political priorities of everybody involved. Aid for Ukraine is, for instance, included in the exemption for defense expenditures, freeing up additional fiscal space. Infrastructure spending, on the other hand, can only be transferred to the special fund once investment spending (excluding loans and equity stakes) exceeds 10 percent of the core budget. Spending on climate protection seems to be exempted from that qualification.

If it sounds complicated, that’s because it is.

What does all of this mean for the future? It is hard to imagine that the resulting mess that now constitutes the German fiscal framework is here to stay. Compliance will be close to impossible to verify, and there are ample opportunities for gaming the system. Instead of focusing on growth—Germany’s actual big issue—and efficient spending, budget experts will become experts in how to best navigate the maze of rules, exemptions, and special funds.

Europe adds another layer of complexity. Going forward, the European Union’s Stability and Growth Pact will still likely constrain Germany’s public spending. Since its reform in 2024, the pact has specified an expenditure path based on a projection of the debt-to-GDP ratio over 14 years to 17 years, which is complemented by deficit-reduction safeguards that the German government had insisted on.

The result is that, according to the Stability and Growth Pact, Germany will have to reduce its deficit every year. But it has just passed a law that does the opposite—making sure that the annual deficit will increase.

Going forward, it is almost certain that the European requirements—requirements that, ironically, were demanded by Germany—will be stricter than the German ones. And ensuring compliance with the European rules is not trivial, as they cover spending at the federal, the state, and the local level. Thus, additional rules will be required to divide up the permitted expenditures between the three levels of government.

Going forward, two scenarios seem most likely: Either Germany’s rules will lose relevance, or they will be reformed. In the first scenario, the government would simply accept that it’s unable to agree on fiscal policy. In that case, messy rules help. Calculating compliance with the debt brake would turn into a performative ritual, while Europe would provide the real fiscal constraint.

Such a scenario is less harmful than attempting to continue institutionalized austerity, but it’s not a good option. Ultimately, for growth, security, and stability to be sustainable, they must rely on a coherent economic framework for the future.

The example of Germany’s outgoing traffic light coalition illustrates what happens if a government cannot articulate a coherent economic policy agenda: Under the coalition’s governance, private investment tanked, and household savings increased significantly. If no one knows why the economy should be expected to do well in the years ahead, then it won’t. This is even more so in times when the state—like it or not—has a large role to play; for instance, as the biggest single buyer of military goods and infrastructure.

There is a more positive possibility: The government could agree that the messy rules resulting from its emergency fiscal surgery this month require a cleanup. And there is a straightforward way for the fiscal framework to be sustainably fixed—by replacing the extremely complex set of rules that now constitute the debt brake with the simple obligation to comply with the EU’s Stability and Growth Pact.

This makes even more sense when considering why the debt brake was adopted in the first place: to ensure compliance with Europe. Since the European rules have gone through a fundamental reform and the debt brake has been punctured, it no longer does so. Hence, why not get rid of all the convoluted fiscal bureaucracy and cut to the chase—simply committing the German Constitution to Europe’s standards?

This would by no means fix all issues, as the reformed European rules are far from perfect.

For one, they focus on a meaningless indicator—achieving a debt-to-GDP ratio of 60 percent or less. Achieving those levels of spending in times where the public balance sheet must grow for defense, decarbonization, and social services is neither possible nor desirable.

Secondly, the European rules pretend that it’s possible to project debt-to-GDP ratios with reasonable accuracy over 14 years to 17 years. It’s not.

But Europe’s rules could have one major and fundamental advantage: They focus much less on arbitrary debt and deficit numbers. Yes, they do still include so-called safeguards—requirements to reduce the debt-to-GDP ratio and the deficit by certain arbitrary amounts. But for now, the EU-Commission proposes to relax these provisions. If that happens, the European rules have the benefit of not focusing on applying arbitrary deficit limits but rather on determining a spending path that is defined by growth-enhancing policy. And that is exactly what Germany needs.

There has never been a bad time to end German’s peculiar relationship to austerity but now may be a particularly good one. Thus, it’s the final clause of the March 4 agreement between the Christian Democrats and the Social Democrats that gives the most hope: It promises a complete reform of the debt brake by the end of 2025.

Philippa Sigl-Gloeckner is the managing director of Dezernat Zukunft, a German macrofinance think tank.

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Big Oil Retreats: Europe’s Energy Giants Ditch Green Pledges

Energy News Beat

Europe’s oil and gas giants are increasingly scaling back their climate goals as they struggle to deliver on their ambitious clean energy pledges.

In 2022, Norway’s state-controlled energy giant Equinor ASA laid its roadmap to achieving net zero emissions.

However, in February Equinor scrapped a pledge to devote more than 50% of its gross capital expenditure to renewables and low-carbon solutions by 2030.

Equinor has also abandoned plans to invest in Vietnam’s offshore wind sector, dealing a significant blow to the country’s green energy ambitions.

This marked the first time Equinor has abandoned offshore wind development; in contrast, the company has previously exited more than a dozen fossil fuel projects to focus on renewables and low-carbon systems.

“The energy transition has started, but the opportunity set for high-value growth is more limited than we had anticipated,” Equinor CEO Anders Opedal said on Thursday.

Similarly, Equinor has announced that it will not move forward with plans to build a pipeline to carry hydrogen from Norway to Germany with partner RWE, citing a lack of customers as well as an inadequate regulatory framework.

Equinor was to build hydrogen plants that would enable Norway to send up to 10 gigawatts per annum of blue hydrogen to Germany.

Similarly, Shell has announced plans to cease new offshore wind investments and is splitting its power division as CEO Wael Sawan looks to boost the company’s profitability.

“While we will not lead new offshore wind developments, we remain interested in offtakes where commercial terms are acceptable and are cautiously open to equity positions if there is a compelling investment case,” a company spokesperson said in a statement carried by Reuters.

Shell, like Equinor, appears to be systematically scaling back its clean energy investments.

Earlier in the year, the company ditched plans to build a low-carbon hydrogen plant on Norway’s west coast due to a lack of demand.

“We haven’t seen the market for blue hydrogen materialize and decided not to progress the project,” a Shell spokesperson told Reuters.

Read more at OilPrice

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Trump Moves To Reopen Coal Plants, Citing U.S. Energy Needs And Global Competition

Energy News Beat

Trump is moving to reopen coal plants and rolling back regulations, citing U.S. energy needs and competition abroad.

Donald Trump announced a massive reversal to decades of American environmental policy on Monday as he vowed to ‘immediately’ open coal-fired power plants. [emphasis, links added]

The United States has been moving away from coal dependency since the early 2000s when it was discovered that the coal-burning process emits carbon dioxide (CO2) – which scientists say is primarily responsible for climate change.

In the decades since, many Americans have turned to renewable alternatives and cheap natural gas for power, as federal regulations raised the operational cost of coal production.

Now, coal accounts for just about 15 percent of all power generated in the United States – down from more than 50 percent in 2000, according to the US Energy Information Administration.

But in a Truth Social post late Monday, Trump announced that America’s trove of coal-burning power plants will once again be operational.

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

Trump’s announcement came as 120 coal-fired power plants are scheduled to shut down over the next five years, in part due to environmental regulations that the America’s Power trade group said made them uneconomic, Bloomberg reports.

Keeping those power plants online could help lower energy costs and supply energy to power-hungry data centers and artificial intelligence, administration officials have argued.

The president had even campaigned on the premise of bringing back the coal industry when he first ran in 2016.

One of his first actions as president was to sign an order directing the Environmental Protection Agency (EPA) to scrap an Obama-era regulation that sought to wean the nation’s electrical grid off coal-fired power plants.

It now appears that the president is continuing with those efforts, with Interior Secretary Doug Bergum telling Bloomberg Television last week that the administration was considering using emergency powers to bring back coal-fired plants that have closed and stop others from shutting.

Energy Secretary Chris Wright also said earlier this month that the Trump administration was working on a ‘market-based plan’ to stem the closing of US coal fire power plants.

His comments suggest that Trump may move forward with a plan to force grid operators to buy electricity from struggling coal plants.

Meanwhile, EPA head Lee Zeldin announced a series of measures last week to roll back significant environmental regulations in what he called the ‘most consequential day of deregulation in American history.’

In total, Zeldin said he was rolling back 31 environmental regulations – including some that limited the pollution that can be emitted from coal-burning power plants.

The EPA chief also vowed to strike down the ‘endangerment finding,’ a 2009 scientific [political] conclusion that found that gases leading to global warming pose a threat to public health and welfare.

It is believed Trump is now ramping up his deregulation of coal-fired power plants to compete with China.

The country has relied on coal-fired power to surge manufacturing on an array of goods and drive its economic expansion.

Yet even as China’s annual Gross Domestic Product, in US dollars, jumped from around $361 billion in 1990 to around $14.7 trillion in 2020, its coal consumption quadrupled and CO2 emissions more than tripled, according to Bloomberg.

Still, at least one person celebrated Trump’s decision – West Virginia Gov. Patrick Morrisey, who hailed it as ‘outstanding news.’

‘West Virginia is America’s energy state, and we stand ready to work with Donald Trump to lead our nation’s energy resurgence,’ he posted on X.

‘President Trump digs coal, and West Virginia digs President Trump!’

Read more at Daily Mail

Is Oil and Gas An Investment for You?

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Fed’s Operating Losses Declined to $78 Billion in 2024, “Unrealized Losses” Rose to $1.06 Trillion

Energy News Beat

QE has produced years of hangover.

By Wolf Richter for WOLF STREET.

The Fed disclosed two types of losses in its audited annual report today: An operating loss of $77.6 billion for the year 2024, substantially less bad than its operating loss in 2023 of $114 billion. And cumulative “unrealized losses” of $1.06 trillion at the end of 2024, on its holdings of Treasury securities and MBS, up from $948 billion at the end of 2023.

The operating loss of $77.6 billion derived mostly from its interest income being far lower than its interest expenses.

The Fed reported:

$158.8 billion of interest income from its shrinking portfolio of Treasury securities and MBS, whittled down by $2.2 trillion in QT
$0.3 billion in other income and losses, including $1.4 billion in losses from “foreign currency translation,” and income from various services it provides to banks and government agencies.

Minus…

$186.4 billion in interest expense — Interest on Reserve Balances — that it paid banks
$40.3 billion in interest expense on overnight reverse repos (ON RRPs) that it paid to its counterparties, mostly money market funds.
$9.9 billion in operating expenses, including:
- $2.7 billion for the Federal Reserve Board of Governors including printing and managing the Federal Reserve Notes (the paper dollars)
- $4.2 billion in salaries
- $663 million in costs of the Consumer Financial Protection Bureau.

Interest rates on reserves and ON RRPs, among the Fed’s five policy rates, started rising in 2022 with the rate hikes. But the dollar amounts got smaller as the Fed shed securities via its QT program: By the end of 2024, ON RRP balances were largely gone, having dropped by over $2 trillion from their peak in 2021, but reserves were roughly unchanged and still over $3 trillion.

In addition, the rate cuts in late 2024 lowered the amounts in interest that the Fed paid on reserves and ON RRPs. Hence the smaller losses in 2024.

On a quarterly basis, the Fed started booking operating losses in Q4 2022.

The “unrealized losses.”

The Fed’s cumulative “unrealized losses” on its holdings of Treasury securities and MBS rose to $1.06 trillion at the end of 2024, from $948 billion at the end of 2023.

The losses got bigger because longer-term yields rose in the final months of 2024, following the Fed’s monster rate cut in September 2024. Higher yields mean lower market prices for longer-term bonds.

These cumulative unrealized losses are the difference between the securities’ amortized cost (which will be equal to face value by the time the security matures) and their market value at the end of the year:

Securities at amortized cost: $6.75 trillion
Market value at year-end: $5.69 trillion
Cumulative unrealized loss: $1.06 trillion.

The Fed bought most of these securities years ago when yields were far lower than at year-end 2024. As yields on Treasury securities and MBS rose starting in 2021, their market values declined.

As Treasury securities get closer to their maturity date, the unrealized losses diminish and become zero when the securities mature because the holder gets paid face value.

MBS are paid back mostly via passthrough principal payments as the underlying mortgages are paid off when the home is sold or refinanced, and as regular mortgage principal payments are made. When the pool of underlying mortgages shrinks enough, the MBS are “called,” and the holder gets paid face value for the remaining balance. It’s unlikely that any of the MBS will still exist by their maturity date; the Fed will get its money back much sooner.

Unrealized losses represent the losses the Fed would have incurred if it had sold all its securities at market prices at the end of 2024.

If the Fed never sells any of these securities, but waits till they mature, at which point it gets paid face value, those unrealized losses vanish without a trace.

The dividend.

Despite the losses, the Fed paid the statutory dividend, as required by the Federal Reserve Act, to the shareholders of the 12 Federal Reserve Banks. The annual report describes the formula laid out in the FRA for how the dividends are calculated.

In 2024, the Fed paid $1.62 billion in dividends (up from $1.48 billion in 2023).

Losses don’t matter to the Fed but matter to the Taxpayer.

The Fed creates its own money and therefore cannot become insolvent. So to the Fed, these losses are just a visual blemish.

But these losses matter to the Treasury Department – and thereby the taxpayer. The Fed has to remit nearly all of its operating income to the Treasury Department (similar to a 100% income tax). Those remittances stopped when the Fed stopped generating operating income in September 2022.

From 2008 through September 2022, the Fed remitted $1.36 trillion to the Treasury Department. At Treasury, these funds became part of the flow of tax receipts.

QE was a huge gravy train for taxpayers, as the Fed loaded up on securities, generating remittances of $1.1 trillion from 2009 through Q3 2022. But the flow of these funds to Treasury stopped with the losses in September 2022.

The losses pile up as a negative liability on the Fed’s balance sheet – the negative amount due the Treasury Department – that keeps getting larger.

As of the balance sheet on Thursday, that negative amount reached -$224 billion, representing the total cumulative operating losses from September 2022 through Wednesday.

The Fed’s operating losses will continue to decline for a while, but as long as it has any operating losses, the cumulative negative amount grows. When the Fed starts generating operating income again, it will go against that negative amount and whittle it down over time. Remittances to Treasury will restart after the negative balance has been reduced to zero, and that account then turns positive. This will take years.

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The Guardian’s Cyclone Alarmism Collides With Real-World Data

Energy News Beat

ENB Pub Note: Because Energy Policies are based upon elected officials having to pay attention to lobbies with money, they have paid attention in the past. We are seeing a trend that the money is drying up, and it could lend itself to more realistic energy policies. The world will broken into two different types. Those with low-cost energy and prosperity, and those with high-priced intermittent energy and deindustrialization and fiscal failure. Right now, the UK, EU, Germany, Delaware, New Jersey, and California are all on the side leaning toward budgetary and social failure.

The Guardian is pushing climate alarmism on cyclones, but real data show Australia’s tropical storms are declining in both frequency and intensity.

A recent article at The Guardian claims that “climate denial” is increasing in Australia, shown by skeptical reactions to the claim that climate change is responsible for the recent tropical cyclone Alfred. This is nonsense. [emphasis, links added]

“Climate denier” is a false label, and those skeptics are actually correct in their critiques of common media narratives about climate change and tropical cyclones, which are not becoming worse.

In the post, “As Trump attacks US science agencies, ex-Tropical Cyclone Alfred ushers in a fresh wave of climate denial in Australia,” Guardian Australia climate and environment editor Adam Morton writes:

What they [skeptical commentators] mostly haven’t said is that the ocean and atmosphere are demonstrably warmer than even just a few years ago. Or that this means the most intense storms formed in warmer conditions carry more energy and more water. Or that the conditions under which tropical cyclones can form are moving south as the planet heats up.

The evidence is that this is making tropical cyclones less frequent but more intense. There is data suggesting they also tend to last longer. Greater intensity plus time equals heightened risk of damage and casualties. It doesn’t mean that every cyclone or extreme storm will be more damaging than in the past. It does mean that when one comes, the potential for it to carry enough energy to wreak significant havoc is rising, not falling.

The problem is that Morton’s claims are not backed by observational data, and his “evidence” appears to be just climate modeling, which is not capable of matching, predicting, or explaining tropical cyclones.

Eric Worrall posted a great essay also covering The Guardian’s claims on the climate website WattsUpWithThat.com, where he points out that real-world data show that tropical cyclones in Australia are not only decreasing in frequency but also intensity.

He provides the graphic below:

Figure 1: Australia’s total cyclones per year, as prepared by Eric Worrall. Data source: Australian BOM.

Both severity and frequency of tropical cyclones in Australia are declining as those water temperatures have supposedly modestly risen over the past few decades, though sea surface temperature readings are not very widespread and the oceans do not change temperature consistently.

Worrall suggests an explanation for how climate modelers have gotten it so wrong:

Are climate modelers putting the effect before the cause when it comes to long-term cyclone frequency and intensity vs surface temperature? Because there is a very simple possible explanation for why atmospheric and ocean surface temperature is rising but cyclone frequency and intensity are decreasing – cyclone frequency and intensity likely have an inverse relationship with ocean surface and atmospheric heat content.

Cyclones are powerful dissipaters of surface heat, an uptick in cyclones would cause an immediate and sustained drop in surface temperature.

This may or may not be the correct answer. As discussed in a few other Climate Realism posts (here, here, and here, for samples) and as Morton himself admits in the Guardian post, other factors contribute to hurricane formation and intensity, such as wind shear.

Notably, what is true of Australian tropical cyclones is also true for cyclones globally.

Data compiled by meteorologist Dr. Ryan Maue show that major hurricanes (called typhoons in the Pacific) are not becoming more frequent.

Likewise, in the Southern Hemisphere, the tropical cyclone energy totals are not increasing. (See figures below)

If there is any trend at all in hurricane frequency, it may be that these tropical cyclones in general are becoming less frequent, while the number of major storms stays more or less the same, leading to a higher proportion of major storms.

This doesn’t mean that tropical cyclones are getting worse, it still means they are getting less frequent overall.

This simply isn’t something The Guardian and their staff alarmists can win on the observational data, and every time they repeat misinformation about tropical storms they lose credibility.

It was a bit of a change of pace to see them admit that cyclones are not becoming more frequent, even if they missed the mark elsewhere; incremental shifts toward the truth are better than nothing at all.

Top image via ABC New (Australia)/YouTube screencap

Read more at Climate Realism

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China Is No Climate Savior

Energy News Beat

The numbers don’t lie: Beijing will not drive a global energy transition.

Analysis

China Is No Climate Savior

By Seaver Wang, the co-director of climate and energy at the Breakthrough Institute, and Vijaya Ramachandran, the director of energy and development at the Breakthrough Institute.

Since taking office, U.S. President Donald Trump has pulled the United States out of the Paris Agreement, paused wind farm leasing on U.S. public lands and offshore waters, and defiantly declared that “we will drill, baby, drill” for oil and gas to achieve energy dominance. In response, climate policy advocates have wasted no time in proclaiming China to be the world’s last best hope for climate action.

“Insofar as there is to be a global climate leader it can now only be China,” wrote economist Adam Tooze. A Chinese climate policy analyst speculated in a Straits Times interview whether this moment might mark structural Western decline in the “climate space” and the rise of “alternative voices.” Bloomberg journalists contrasted Trump’s return against China’s record-breaking solar and wind build-outs, arguing that China could be poised to upstage the United States by assuming global climate leadership. Recent newsletters from Carbon Brief overflow with positive headlines about China’s energy transition efforts while reporting grimly on the Trump-led shift on climate policy.

While the United States now makes for an even more convenient climate pariah than usual, framing Washington as the villain and Beijing as the climate savior ignores the facts of China’s energy use and trajectory. More importantly, selectively framing the debate this way also deflects attention from Beijing’s own emissions, particularly in the coal power and industrial sectors.

As the U.S. withdrawal from the Paris climate agreement fundamentally challenges the usefulness of climate summits and pledges, praise for China’s alleged climate progress validates charges that the climate policy circuit exists only for performative promises and symbolic pageantry.

There is a stark dichotomy between applause for Beijing’s climate rhetoric and the reality of China’s emissions trajectory. Since China signed the Paris Agreement in 2015, it has accounted for 90 percent of all global growth in carbon emissions. China now produces more than 30 percent of the world’s carbon dioxide from fossil fuels. China’s greenhouse gas emissions are more than twice the United States’ and more than four times India’s or the European Union’s.

Five years have passed since Chinese President Xi Jinping’s landmark pledge to achieve net-zero carbon emissions by 2060, but there is little evidence to suggest that the country’s energy system and policies are moving in the right direction. China will very likely miss its 2025 carbon-intensity pledge—an 18 percent reduction in carbon emissions per unit of economic output compared to 2020 levels—along with all of its other 2025 pledges related to limiting coal use and expanding clean power. And far from making good on a widely celebrated 2021 promise to phase out international financing of coal projects, China remains, by far, the leading financier of overseas coal power capacity. At home, Chinese planners started construction of 94.5 gigawatts of coal power generation in 2024 alone, roughly equal to the power generated by the entire U.S. nuclear power sector.

China’s emissions trajectory illustrates the limitations of the most venerated global climate pledge of all: limiting warming to 1.5 degrees Celsius (or about 2.7 degrees Fahrenheit) above preindustrial levels by the end of the century. Even if China’s carbon emissions peaked this year and then plummeted linearly to zero by 2060, China alone would consume the entire world’s remaining carbon budget for a 66 percent chance of achieving the 1.5 degree goal.

Commentators and activists demanding muscular climate policies from the West usually look away when others point an accusatory finger at China. But a Chinese climate analyst writing in the Financial Times effectively conceded that an emissions pathway that avoids breaching the 1.5 degree Celsius target would require an unlikely “crash decarbonization” by China.

Planners and thinkers need to accept that the 1.5 degree goal is now irreconcilable with reality—no matter how much they imagine that Chinese technological and construction magic might save the day.

Some might counter that while the 1.5 degree target may have slipped away, Beijing nonetheless has a real chance of executing an about-face and leading the world in fast-paced decarbonization. Certainly, China is building solar, wind, battery, and nuclear energy facilities at a blinding pace, installing nearly 100 gigawatts more solar capacity in the first half of 2024 than the rest of the world combined. More than 80 percent of the world’s solar cell manufacturing takes place in Chinese factories. This year, sales of electric vehicles in the country will likely exceed those of combustion-engine cars. And Beijing can build on these successes by helping other countries, particularly low- and middle-income states, develop renewable power projects. Indeed, Chinese solar exports are on the rise.

But none of these numbers can change the bigger picture. Since 2011, China has consistently consumed more coal than the rest of the world combined; last year, coal use likely hit another record high. China’s clean electricity additions may be impressive, but they are only now beginning to match growth in overall energy demand, which means that fossil fuel energy consumption is—at best—only plateauing, without any of it yet being displaced. Meanwhile, an uptick in curtailed and otherwise wasted renewable generation suggests that a further build-out of renewables is increasingly constrained by grid infrastructure and market inflexibility.

China’s vast industrial sector—often glossed over in climate discussions—accounts for around 60 percent to 70 percent of the country’s emissions. Industry currently depends on fossil fuels to smelt ores, fire up furnaces, and serve as the feedstock from which various products are made. The Chinese aluminum sector alone produces roughly as much carbon dioxide as the entire country of Indonesia. China’s chemical, steel, metal, and minerals industries together exceed the total emissions of the entire United States. Next to such figures, the strident demands by various activists and advocacy groups for climate commitments from sub-Saharan African nations with negligible emissions appear even more absurd.

Some of China’s policies, including its lack of ambition to electrify heavy industry, actually hold back global decarbonization efforts. Cleaner means of producing steel, nickel, graphite, or ubiquitous chemicals such as calcium carbide and sodium hydroxide face fierce competition from highly polluting but low-cost Chinese producers that enjoy generous government support.

China has proposed and imposed export controls on key technologies required to manufacture solar panels, batteries, and other clean technology. Beijing may be keen to sell electric cars and solar equipment at home and abroad, but it is clearly not giving these technologies to the world.

If anything, the Chinese example does not buoy hopes that a developing country can both build a heavy industrial base and mitigate emissions. Meanwhile, activists and international policymakers have expressed concern over the entanglement of China’s solar, battery, and electric car industries with state-sponsored forced labor programs in the province of Xinjiang. Such objectionable policies have now forced many governments and firms into difficult quandaries over the ethical sourcing of solar panels and other clean technology.

And far from making good on the 2021 promise to phase out international financing of coal projects, state-owned banks and financial institutions such as the China Development Bank and the Export-Import Bank of China continue to play a central role in funding coal-fired projects. Through its Belt and Road Initiative, China has extended its financial influence globally by providing loans and investments specifically earmarked for energy infrastructure, including coal. These investments often come with attractive financing terms that make them appealing to governments with limited access to capital. China’s stated climate ambitions thus stand in sharp contrast to its overseas financing of coal plants.

To this day, China has duly ratified global climate treaties, consistently attended climate summits, and contributed some funds to global climate finance mechanisms. But when it comes to the key metric of emissions, U.S. and EU numbers are decreasing, while China’s have not yet peaked. Distaste for Trump’s climate policies must not mislead commentators into mistaking Chinese decarbonization dreams for real-world deeds.

A more serious debate about the global energy transition must grapple with what Beijing is still not doing instead of just cheering at China’s solar and electric car milestones. Climate commentary about the country must grow beyond getting excited when a communique of the Chinese Communist Party’s Central Committee mentions the words “carbon reduction” for the first time.

And rather than asking softball questions about whether Beijing remains committed to climate action despite Trump’s uncooperativeness, perhaps commentators should repeatedly ask when the government will cease its efforts to subsidize heavy industry in the most carbon-intensive manner imaginable. They should question whether China messages its climate progress as a means to influence U.S. and European behavior, or if Beijing has instead received concessions from Washington or Brussels by offering unenforceable climate promises.

Most of all, the climate policy circuit must open its eyes to the reality that Chinese policymakers follow a “China First” geopolitical strategy that is at least as relentless as Trump’s “America First” posture. Official spokespeople insist that China is still a developing country with a lower obligation to cut emissions or contribute toward climate finance, while Chinese climate negotiators’ stress that climate cooperation is conditional on efforts to improve relations in other areas to Beijing’s satisfaction—a policy linkage that is entirely at odds with the widespread Western view of climate as a challenge above all others.

And if climate activists still doubt that Beijing’s real intentions diverge from its cooperative rhetoric, they need look no further than Russian troops riding across Ukraine in Chinese-made Desertcross all-terrain vehicles, supported by Chinese drones, and funded by Chinese purchases of Russian oil and gas.

Behind all the promises and signaling, the numbers don’t lie: China is not going to drive a rapid transition away from fossil fuels at home or abroad. It may well be the case that what is happening in China is simply what is happening everywhere else: slow, long-term decarbonization. In other words, China will be using fossil fuels for a long time, even as it makes progress on clean energy and low carbon technology.

If climate advocates are now giving up hope that Trump’s United States might supply their Hollywood climate ending, then they will find little solace in turning expectantly toward China.

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The UK’s Heathrow Power Outage sheds light on Net Zero Policies

Energy News Beat

Net Zero has forced global financial and companies to become carbon-neutral. But the why is only one question that we will tackle on another day. Today, let’s look at the energy policies that countries force upon critical infrastructure in the name of Net Zero and only cause harm to people and even more damage to the environment.

CNN Reports:

London’s Heathrow Airport is closed, prompting global travel chaos

Heathrow at standstill: London’s Heathrow Airport is completely shut down today because of a power outage due to a large fire nearby, causing massive disruption at one of the world’s busiest travel hubs. The fire is now under control, but Heathrow’s backup power supply was also affected.

• Global travel impacted: Heathrow’s closure is expected to affect more than 1,300 flights in the coming days, and disruption will be felt in travel hubs across the world. An airline analytics firm estimated that “upwards of 145,000” passengers could be impacted, while an aviation expert told CNN the airline industry could lose hundreds of billions of dollars.

• Cause under investigation: Counter-terror police are probing the cause of the fire, authorities said, given its impact on “critical national infastructure.” The UK’s energy minister said there was “no suggestion” of foul play.

UK’s National Grid says power restored to “parts of Heathrow” on interim basis

From CNN’s Lauren Kent

British utility company National Grid says that it restored power to “parts of Heathrow” on an interim basis, but the airport said it is unclear when its supply would be “reliably restored” and is still urging passengers not to come.

Heathrow closed early Friday after a massive fire at the nearby North Hyde power substation in Hayes, west London.

“The network has been reconfigured to restore all customers impacted, including the ability to resupply the parts of Heathrow airport that are connected to North Hyde,” National Grid said in a statement in which it apologized for the disruption. “This is an interim solution while we carry out further work at North Hyde to return the substation and our network to normal operation.”

“We are continuing to work closely with all stakeholders to manage this incident, and are focused on returning to normal resilience levels as soon as possible,” National Grid added.

What Heathrow is saying: Meanwhile, the airport said in a statement that it does not have “clarity on when power may be reliably restored.”

The following update is from X and it is a shocking reality. The backup system that was built on diesel generators and would automatically kick in, was swapped out for a biofuel system that failed miserably in order to meet Net Zero standards.

Hat Tip to the Texas Alliance on X

Heathrow apparently moved away from diesel-powered back-up generators to biomass-fueled ones. https://t.co/7hQQTfP75v

— Texas Alliance (@TexasAllianceEP) March 21, 2025

This also leads us to another set of articles that I am working on, and that is gasoline, biodiesel, and ethanol. As the United States is in an Energy Renaissance of Sanity it would be nice to ask the question is biofuel even worth it. Ethanol is more harmful to the environment and costs the United States billions of dollars every year.

I know that traveling between homes, I can travel using ethanol-free gas and gain 2 miles per gallon each trip. That adds up over time, and we know that ethanol takes more energy to produce and is harder on engines, costing more in repairs.

Grok on X reports the following on Ethanol.Calculating the exact annual cost of ethanol production in the United States involves several variables, including feedstock costs (primarily corn), energy inputs (like natural gas), labor, infrastructure, and government subsidies or tax credits. Since precise, up-to-date figures for 2025 are not fully available, I’ll provide an estimate based on historical data and industry trends, using the most recent reliable statistics and reasonable assumptions.

In 2023, the U.S. produced approximately 15.6 billion gallons of fuel ethanol, according to the Renewable Fuels Association (RFA). Production costs vary depending on corn prices, plant efficiency, and co-product revenues (e.g., distillers dried grains with solubles, or DDGS, and corn oil). A model from the farmdoc daily series by the University of Illinois, which tracks a representative Iowa ethanol plant, offers a useful framework. This model accounts for variable costs (corn, natural gas, and other inputs like enzymes and labor) and fixed costs (plant maintenance and overhead).

Key Cost Components (Based on 2023 Data):

Corn Costs: Corn is the primary feedstock, accounting for about 70-80% of variable costs. In 2023, the average corn price was around $4.50-$6.00 per bushel (USDA data). Ethanol plants yielded about 2.95 gallons per bushel in 2023. At $5 per bushel (a midpoint estimate), the corn cost per gallon is approximately $1.69 ($5 ÷ 2.95). For 15.6 billion gallons, this totals roughly $26.4 billion.

Natural Gas and Other Variable Costs: Natural gas costs for thermal energy, along with non-corn inputs (e.g., enzymes, water, electricity), were estimated at $0.21-$0.26 per gallon in the farmdoc model for recent years. Using $0.24 per gallon as an average, this adds about $3.74 billion (15.6 billion × $0.24).

Fixed Costs: The farmdoc model assumes fixed costs dropped to $0.15 per gallon after 2018 (due to loan payoffs for older plants). For 15.6 billion gallons, this is approximately $2.34 billion (15.6 billion × $0.15).

Total Production Costs Before Co-Products: Adding these, the gross cost is around $32.48 billion ($26.4 billion + $3.74 billion + $2.34 billion).

Co-Product Revenue Offset: Ethanol plants generate revenue from DDGS and corn oil, reducing net costs. In 2023, DDGS production was about 35 million metric tons, with prices averaging $200-$250 per ton. Assuming $225 per ton, this yields $7.88 billion (35 million × $225). Corn oil production was 4.2 billion pounds, with prices around $0.50 per pound, adding $2.1 billion (4.2 billion × $0.50). Total co-product revenue is roughly $9.98 billion, lowering the net cost to about $22.5 billion ($32.48 billion – $9.98 billion).

Government Subsidies and Tax Credits:

Historically, ethanol production has been supported by subsidies and tax credits, though many direct incentives (like the $0.45 per gallon blender’s credit) expired in 2011. The Renewable Fuel Standard (RFS) indirectly supports production by mandating ethanol blending, and some states offer additional incentives. A 2010 Congressional Budget Office study estimated biofuel tax credits cost $6 billion annually in 2009, mostly for ethanol. While direct subsidies are now minimal, the economic impact of the RFS and related policies could add several billion dollars in implicit costs to taxpayers or consumers annually, though this is not a direct production cost.

Final Estimate for 2023 (Adjusted for 2025):

Assuming production remains stable at 15.6 billion gallons in 2025 and factoring in potential increases in corn prices (e.g., to $5.50 per bushel due to inflation or market shifts) and energy costs (e.g., $0.26 per gallon), the gross cost could rise to $35 billion, with co-product revenue offsetting it to a net cost of approximately $25 billion. This aligns with industry trends showing operational costs of $1.50-$2.00 per gallon after co-product credits.

Thus, the United States likely spends around $22 billion to $25 billion annually to produce ethanol as of 2025, based on 2023 production levels and adjusted for modest cost increases. This figure excludes indirect costs like subsidies embedded in policy or environmental externalities, which could push the societal cost higher depending on how one defines “cost.” For a more precise 2025 figure, real-time data on corn prices, energy costs, and production volumes would be needed, but this estimate reflects the best available information as of March 21, 2025.

Getting back to the Heathrow airport and the UK. The Net Zero aspect of backup generators for critical infrastructure needs a total review. Their grid is in horrific shape with no bright spots on the horizon at night. The UK is facing a long winter’s night even though we are approaching spring. Here in the United States, we have nearly dodged a bullet from the prior administration, but we are not out of the woods yet.

The UK does not have a Secretary, Chris Wright, appointed by Donald Trump, at their disposal, and it is not looking good for a once great country.

We appreciate all of our great listeners to the podcast and supporters of the Energy News Beat Substack. We are on track to have over 15 million transcripts read of this year’s podcasts. We are thrilled with all of the great feedback. Thank you. – Stu

This story was originally printed on The Energy News Beat Substack

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Atlantic LNG shipping rates rise to $31,000 per day

Energy News Beat

Spark’s data lead, Qasim Afghan, told LNG Prime on Friday that global LNG freight rates rose again this week to reach the highest rates of 2025 so far.

“Spark30S (Atlantic) freight rates increased by $5,250 to $31,000 per day, whilst Spark25S (Pacific) rates experienced its largest week-on-week rise in seven months, rising by $7,500 to $27,250 per day,” he said.

“After sitting at record lows for much of this year, the recovery in rates seen this month has meant that LNG freight rates are now at similar levels to pre-2022 rates for this time of year,” Afghan said.

In Europe, the SparkNWE DES LNG rose compared to $12.829/MMBt last week.

“The SparkNWE DES LNG front month price for March increased by $0.159 to $12.988/MMBtu, whilst the discount to the TTF widened by $0.075 to -$0.635/MMBtu,” Afghan said.

He said the “US arb to NE-Asia (via the Cape of Good Hope) remained steady week-on-week at -$0.36/MMBtu and continues to incentivize US cargoes to deliver to Europe.”

“The Nigerian front month arb to NE-Asia, despite briefly opening up earlier this week, has marginally closed out again and is pointing to Europe, assessed at -$0.038/MMBtu,” Afghan said.

Image: Spark

Data by Gas Infrastructure Europe (GIE) shows that volumes in gas storages in the EU declined from last week and were 34.02 percent full on March 19.

Gas storages were 35.89 percent full on March 12, and 59.37 percent full on March 19, 2024.

In Asia, JKM, the price for LNG cargoes delivered to Northeast Asia in May 2025 settled at $13.530/MMBtu on Thursday.

Last week, JKM for April settled at 13.644/MMBtu on Friday, March 14.

Front-month JKM decreased to 13.180/MMBtu on Monday and to 13.105/MMBtu on Tuesday, while it rose to 13.775/MMBtu on Wednesday.

State-run Japan Organization for Metals and Energy Security (Jogmec) said in a report earlier this week that JKM for last week “rose to low-$13s on March 14 from low-$12s the previous weekend.”

“JKM rose to mid-$13s on March 11 due to tensions in the war in Ukraine, which rose by the backdrop of the attack on gas production facilities in Ukraine on March 7 and President Trump’s threat of sanctions and additional tariffs against Russia over the peace talks,” Jogmec said.

“JKM then turned around and fell to low-$13s on March 14 on the back of significant progress toward the peace talks conversely easing of geopolitical risks, as well as lower global gas prices and forecasts of lower demand in the shoulder season,” Jogmec added.

Source: Lngprime.com

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America Should Lead the Fight Against Global Energy Poverty

Energy News Beat

ENB Pub Note: Gabriel Collins, Baker Botts fellow, has excellent points in this article about building U.S. energy as an export. We may see some of this play out with President Trump talking about taking over some of the utilities in Ukraine and owning and operating the nuclear power plant. Energy as an export service is a fantastic service that creates local jobs and enhances lives. The United States would be best served by providing the excellent technology and manufacturing capabilities of building nuclear reactors or coal and natural gas power plants with clean technology solutions as export services. Russia has exported atomic reactors and power plants and increased their energy exports up to an estimated 39% of their GDP. This would be a win-win for the Trump administration in offsetting the trade balances. Chris Wright, US Energy Secretary, has been leading the charge on ending energy poverty for years. I have heard him say instead of Net Zero by 2030 or 2050, let’s end energy poverty by 2030 or 2050. Looking at exporting energy as a path would help the US and the world.

Supplying the world with power will enhance U.S. security.

Argument

An expert’s point of view on a current event.

By Gabriel Collins, the Baker Botts fellow in energy and environmental regulatory affairs at Rice University’s Baker Institute for Public Policy.

Global events during the past several years make three things crystal clear: Energy security is national security, abundant energy is an irreplaceable tool for adapting to climate volatility and improving living standards, and U.S. diplomacy abroad is only as credible as the concrete options and solutions the country brings to the table. In some cases, these are fully private solutions, such as the liquefied natural gas (LNG) exports that helped Europe weather the cutoff of Russian gas supplies resulting from Moscow’s 2022 invasion of Ukraine. In others, they are government-facilitated efforts, such as the power grid resilience efforts that the U.S. Agency for International Development led in the Philippines, Thailand, Ukraine, and other countries.

If Washington cannot deliver, China will and while doing so diminish U.S. position and power. Consider, for instance, the roughly 50 gigawatts of power projects that Chinese state-owned firms have built or are building for electricity systems in Brazil, Indonesia, and Vietnam—all of which are (or can be) key U.S. regional partners.

Washington should openly embrace and lead the fight against global energy poverty. The same way the Green Revolution enhanced U.S. power and position by improving food security across the global south two generations ago, so too can an energy abundance revolution bolster the U.S. strategic position in this generation’s great-power competition.

The United States’ tremendous resource base, technological capabilities, and industrial prowess position it to first ensure that U.S. citizens do not face “heat versus eat” decisions and then to build a better world for the billions of people who still live in energy poverty. Full pursuit of these two vital priorities will cement Americans’ own prosperity and strategic position.

When the United States pursues energy abundance itself and postures other countries to do the same, it fortifies the world against tyrants, such as Russia’s Vladimir Putin, who would use energy as a weapon. Imagine how dark—figuratively and literally—the world would be if U.S. exporters had not been able to swing their LNG exports to Europe in a matter of days and weeks once Russia began curtailing gas supplies before and after its second invasion of Ukraine? Just as the Berlin Airlift helped the free world stand strong in 1948, so too did the U.S.-led effort in 2022 help keep Kyiv free.

Energy abundance also enriches, and saves, individual lives. It means more children drinking safe water in Nigeria and Sudan, fewer women breathing harmful wood smoke in rural India, and more parents elevating their families with better paying jobs in Ethiopia, Vietnam, and the Philippines.

Former Nigerian Vice President Yemi Osinbajo likely spoke for billions of people in the developing world when he wrote in Foreign Affairs in 2021 that “our citizens cannot be forced to wait for battery prices to fall or new technologies to be created in order to have reliable energy and live modern, dignified lives.” Helping them to fulfill aspirations of access to modern energy sources would, as I have showed in previous work, make billions of lives better while winning hearts and minds in the process.

Washington is uniquely positioned to lead energy poverty alleviation efforts, since the United States has the greatest comprehensive global competitive capacity in energy production. To be sure, this is not the case in every potential energy value chain. Wind and solar are already dominated by China, whose industrial policy has yielded massive overcapacity relative to demand. Spending hundreds of billions of dollars in U.S. taxpayer funds to chase those manufacturing sectors would be poor fiscal stewardship.

The United States should instead take advantage of cheap and low-security-risk Chinese basic hardware, such as solar panels, and for other, more security-sensitive items, such as control systems and the inverters that change direct current electricity into alternating current, require a separate edition that is manufactured in the United States, Canada, or Mexico and which runs audited, open-source software with verified datalink and internet connection hardware.

In other critical areas that comprise much larger sectors of global energy supply now, such as oil and natural gas, the United States is extremely competitive. In 2023, it accounted for about 16 percent of global crude oil production and approximately 25 percent of natural gas production. The shale boom that lifted U.S. production to these levels offers a critical, and apropos, historical lens because what started as a fundamentally domestic enterprise in the mid-2000s ended up achieving transformative energy security impacts far beyond U.S. borders. Europe’s ability to withstand Russian gas coercion during the first phases of the Ukraine war by surging imports of U.S.-produced LNG testifies to this reality.

Parts of Africa and Ukraine each have major gas development potential that could be accelerated with injections of U.S. firms’ capital and expertise and yield mutually beneficial partnerships. One way to begin facilitating such interactions literally requires the stroke of a pen: changing the Treasury Department’s “Guidance on Fossil Fuel Energy at the Multilateral Development Banks” so that instead of stifling natural gas development in the global south by discouraging foreign investment, it encourages it.

Doing so would open the landscape for public capital providers such as the International Monetary Fund and World Bank to help de-risk the gas-fired power plants and pipeline projects needed to get gas molecules to market in energy-hungry countries with indigenous gas resources. These demand signals and infrastructure would in turn catalyze drilling and production of gas. These steps can catalyze a virtuous cycle in which developing countries accelerate their own economic growth and reduce energy poverty.

U.S. producers, manufacturers, and financiers are also well positioned to shape the development and deployment of new, low-emission, resilient, and secure baseload energy resources from geothermal and next-generation nuclear. Both sectors leverage unparalleled domestic U.S. expertise in subsurface geology, advanced manufacturing, and the marriage of technical expertise and financial prowess that is needed to achieve terawatt-sized scale-up.

Depending on the reactor size, each gigawatt of need is likely to require somewhere between three and 70 small modular reactors, or SMRs, each of which is likely to cost $70 million or more. With a global addressable market that is easily in the hundreds of gigawatts—including in Africa, Latin America, South Asia, and Southeast Asia—the opportunity is enormous. China and Russia already operate SMRs and are also vying to be the energy supplier of choice for many of these areas, a reality that must invigorate U.S. competitive spirit. To boot, meeting the emerging nuclear opportunity is not just an U.S. venture but an allied one—Australian and Canadian uranium and Japanese and South Korean construction, steel, and forging capabilities will also be critical. Advanced geothermal can also strongly compete in many of the same markets as nuclear, particularly in East Africa and the Indo-Pacific.

To unlock nuclear and geothermal opportunities, the Trump administration should take three key steps. First, the Defense Department should consider becoming an anchor customer for SMRs and advanced geothermal—starting in Alaska. An open competition should be used to select the most appropriate technology at the lowest cost and highest safety and scalability, with the incentive of being able to serve one of the world’s largest energy-consuming entities.

Second, the administration should consider seeking supplemental funding for the International Development Finance Corp. (DFC). DFC was established in 2019 and is the U.S. government’s development finance institution. It partners with private capital to invest throughout the developing world and strategic locations in sectors including energy, health care, critical infrastructure, and technology. DFC backing can potentially help facilitate exports of U.S. firms’ advanced nuclear reactors and geothermal systems. To ensure congruence with core U.S. national interests, DFC should be encouraged to prioritize project financing for areas with the highest combination of strategic competition and energy poverty.

Third, the administration should launch an Indo-Pacific energy geoeconomics initiative. Electricity and fuels are a critical competitive domain, and the United States should leverage its competitive advantages across the clean and reliable energy sources and technologies it excels at: LNG now and, with the right approach, advanced geothermal and modular nuclear in the near future.

Writing 67 years ago, U.S. Sen. Hubert Humphrey noted that “[o]ur reserves of food and fiber, and our ability to produce such commodities in abundance, are resources to be prized; to be used boldly and imaginatively, and not be dribbled away.” Substituting “energy” for “food and fiber” makes the statement as relevant in 2025 as it was in 1958.

Energy offers opportunities for the United States to do well for itself, improve lives in allied and partner countries, and short-circuit its adversaries’ attempts to corrode and damage a global architecture that has delivered unprecedented prosperity and well-being over the past 80 years. An energy abundance agenda can help underwrite human betterment, peace, and security. The United States can pursue it in a fully bipartisan fashion. And most importantly, the work starts now, at home.

Gabriel Collins is the Baker Botts fellow in energy and environmental regulatory affairs at Rice University’s Baker Institute for Public Policy and the Center for Energy Studies’ lead for its Program on Energy and Geopolitics in Eurasia. This article represents his personal views only.

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EPA Reversing Biden’s Impossible Power Plant Rules, Averting Blackouts And Higher Rates

Energy News Beat

EPA rolled back Biden’s emissions rules, avoiding blackouts and billions in costs as coal, gas plants faced strict compliance or closure by 2039.

Last week, the Environmental Protection Agency announced it would roll back the Biden administration’s greenhouse gas emissions standards on power plants. [emphasis, links added]

That’s great news for consumers, who will suffer from widespread blackouts and billions of dollars in costs if the rules are not repealed.

The Biden administration’s rules, finalized in May 2024, would subject millions of people to rolling blackouts by effectively forcing reliable coal plants to retire and erecting impediments to building the new natural gas plants needed to replace them reliably.

Under Biden’s rules, coal and new natural gas plants would be forced to spend billions of dollars installing unproven carbon capture and sequestration technology to capture 90% of their emissions or shut down by 2039.

Almost all coal plant owners would rather close up shop than undertake such high compliance costs. As a result, the rules would make America’s electric grid dangerously dependent upon unreliable wind, solar, and battery storage technologies.

There couldn’t be a worse time to retire reliable power plants.

The North American Electric Reliability Council (NERC) warned in 2024 that one regional grid is at risk of blackouts in “normal peak demand” conditions in 2025 and beyond, and more could expect them in the near future.

NERC correctly identifies that “resource additions are not keeping up with generator retirements and demand growth.”

The unreasonably short compliance deadline and broad scope of Biden’s rules prompted four of the largest grid operators in the United States, serving 30 states and 155 million people, to warn the EPA of the dire effects on grid reliability.

The grid is clearly in trouble when the people who run it are saying that “hope is not an acceptable strategy.”

The nation’s grid operators have good reason to worry. Our organization modeled the cost and reliability impacts of Biden’s regulations in the Southwest Power Pool, the grid operator spanning 13 states from North Dakota to New Mexico, on behalf of the North Dakota Transmission Authority, and concluded the rules would cost ratepayers billions and lead to enormous blackouts.

Using EPA’s forecast of what power plants would serve the SPP grid under the regulations, we determined building enough wind, solar, and battery storage to replace the retiring coal, natural gas, and nuclear plants on the system would cost families and businesses in the region an additional $65.6 billion over the costs of operating the current grid.

For context, the Biden EPA thought the entire U.S.’s compliance costs would only cost $19 billion through 2047.

Not only would the rules cost a fortune, but they would also lead to devastating blackouts.

Modeling the Biden EPA’s grid portfolio assumptions with historical generation, our model predicts 13 separate blackout events in 12 days of February 2040 if hourly demand and wind and solar generation were the same as in 2021.

One blackout would last 41 straight hours. Shortfalls would total 1,365 hours, or 15% of all the hours of the year, most in the evening and in the winter. The EPA did not perform any hourly reliability modeling.

Bad energy policies impose real costs in lives and suffering: February 2021 brought Winter Storm Uri, which killed 246 people in Texas.

Lengthy blackouts across SPP would have affected about 5.2 million people — in a part of the U.S. that experiences harsher winters in Texas.

Under President Donald Trump, the EPA is wisely poised to reprioritize grid reliability while continuing to protect the environment.

Read rest at Washington Examiner

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Current and prospective investors, please call our Pecos Country Operating offices at (817) 581-3877.

Pecos Country Operating, LLC is a privately owned oil and gas exploration and production company headquartered in Fort Worth. We own and operate wells across the South Central United States with our predominant means of production coming out of West and North Texas.

By Philippa Sigl-Gloeckner, the managing director of Dezernat Zukunft, a German macrofinance think tank.

QE has produced years of hangover.

By Wolf Richter for WOLF STREET.

The “unrealized losses.”

The dividend.

Losses don’t matter to the Fed but matter to the Taxpayer.

China Is No Climate Savior

By Seaver Wang, the co-director of climate and energy at the Breakthrough Institute, and Vijaya Ramachandran, the director of energy and development at the Breakthrough Institute.

London’s Heathrow Airport is closed, prompting global travel chaos

UK’s National Grid says power restored to “parts of Heathrow” on interim basis

By Gabriel Collins, the Baker Botts fellow in energy and environmental regulatory affairs at Rice University’s Baker Institute for Public Policy.

Current and prospective investors, please call our Pecos Country Operating offices at (817) 581-3877.

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