Energy News Beat

The eagerly anticipated African Energy Bank will launch by June 30 after selecting a host nation this month and hopes to raise an initial $5 billion from African signatories, international financiers and Middle Eastern states, its head told S&P Global Commodity Insights.

Formed out of a partnership between the African Petroleum Producers Organization (APPO), which represents the continent’s petrostates, and the African Export-Import Bank (Afreximbank), the institution hopes to fund oil and gas projects on the continent amid a damaging financing squeeze in recent years.

In an interview on the sidelines of an energy conference in Accra, Ghana on March 12, Omar Farouk Ibrahim, APPO’s secretary-general, said “a number of investors and countries in the Middle East that believe that the oil and gas industry has a future” were “waiting in the wings” to supply financing.

The institution’s headquarters will be selected by the end of March, he said, with six member states including Ghana jostling for host status. Mohamed Aoun, Libya’s oil minister, is chairing the committee to select the headquarters, which met virtually March 11.

Matthew Opuko Prempeh, Ghana’s energy minister, told S&P Global that Ghana was one of the only countries that fulfilled all the criteria, adding that site visits had already taken place.

“We have already started receiving funds from our member countries,” Ibrahim said. “By the end of this month we expect a decision on who will host the headquarters. By 30th June we expect the bank to be set up.”

Sources speaking on condition of anonymity told S&P Global that only Nigeria and Angola had so far supplied initial funds to the project, at around $20 million each. The bank is seeking $83 million from each of the 18 signatories, amounting to almost $1.5 billion.

Once set up, the bank will be able to fund oil and gas projects in Africa, despite Western financing drying up in recent years due to the global shift away from fossil fuels.

“The whole idea of establishing the African energy bank stems from the realization that those on whom Africa has been depending for the last 70-100 years for finance to explore, produce and process its oil and gas have been essentially Western and they have decided as a result of the global paradigm shift towards renewables to end fossil fuel funding, particularly in Africa,” said Ibrahim.

Afreximbank has emerged as a leader in hydrocarbon project funding recently, but Ibrahim said that caused issues among some of its shareholders.

“Afreximbank cannot continue the way it is, funding oil and gas projects. There is a lot of pressure on it from other investors in the bank who do not share the vision. By partnering with us they have excised everything about oil and gas from their portfolio,” he said. “Financers of Afreximbank are not just Africans or people who share our vision.”

Global demand

In the wide-ranging interview, Ibrahim — a former Nigerian OPEC governor — said OPEC membership still makes sense for African countries, despite Angola’s departure in January following a dispute over its production quota.

“I think OPEC has been a blessing to the oil industry. It is impossible for every country to say it has got everything it needs or wants but collectively I think the decisions of the organization have been very helpful for the economies of these countries.”

The APPO secretary-general also remains bullish about global oil demand in the coming decades, despite predictions of peak oil in 2030 by the International Energy Agency.

“We are convinced that oil demand will not be what the IEA and other climate activists have been telling the world in the last few years, that we are coming to a peak,” Ibrahim said. “The fact is the global population is increasing, cities are growing, and this will require a lot of energy.”

He said the focus in Africa should now shift away from exporting oil and gas to wealthy nations in Europe and elsewhere and towards domestic consumption. Many African producers, including Nigeria, Angola and Ghana, export their oil and import refined products, hitting foreign exchange, slowing industrialization and leaving them vulnerable to price volatility.

“We export 75% of our oil and 45% of our gas, not because we don’t need it but because we get big money selling it internationally,” Ibrahim said. “The point we are making is, give access to the people for energy and they will transform the economy. Exporting hasn’t worked and it won’t work.”

Source: Spglobal.com

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The notice for early EPC activities was issued to a joint venture comprising Technip Energies, JGC Corporation, and National Petroleum Construction Company, ADNOC revealed in a statement on March 12.

ADNOC said the early EPC award marks a significant milestone as the project advances toward the final investment decision (FID), which is expected this year.

The Ruwais LNG project is set to be the first LNG export facility in the Middle East and North Africa (MENA) region to run on clean power, making it one of the lowest carbon intensity LNG plants in the world, supporting ADNOC’s accelerated Net Zero by 2045 ambition.

Fatema Al Nuaimi, Executive Vice President, Downstream Business Management at ADNOC, said: “The Ruwais LNG project will reinforce ADNOC’s position as a reliable global natural gas supplier, underscoring its pivotal role and contribution to global energy security. The project is set to significantly contribute to the Al Dhafra region’s economy by boosting the local industrial ecosystem, attracting further investments and creating a vital energy trade gateway in Al Ruwais Industrial City.”

When completed, the project, which consists of two 4.8 million metric tonnes per annum (mmtpa) LNG liquefaction trains with a total capacity of 9.6 mmtpa, will more than double ADNOC’s LNG production capacity, from 6 mmtpa to around 15 mmtpa.

At the end of 2023, ADNOC secured a long-term heads of agreement with ENN LNG, a wholly-owned subsidiary of ENN Natural Gas, for the delivery of at least 1 mmtpa of LNG primarily sourced from the Ruwais LNG project.

This 15-year agreement is the first long-term deal for the offtake of LNG from the Ruwais project. The deliveries are expected to start in 2028, upon the commencement of the facility’s commercial operations.

Source: Offshore-energy.biz

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Challenging Russia and China’s dominance in the global nuclear energy sector requires more than sanctions and wishful thinking. It’s essential to offer our energy-hungry world a genuine alternative to heavily subsidized, state-owned nuclear energy suppliers. That begins by empowering U.S. government agencies to support nuclear projects and eliminate finance bans at multilateral banks, which give unfair advantages to our adversaries.

Last week marked the two-year anniversary of the violent seizure and shelling of Ukraine’s Zaporizhzhia nuclear power plant by Russian armed forces. Two years later, the facility’s inoperable and degraded conditions illustrate Russia’s blatant disregard for international nuclear safety standards. All six reactors are indefinitely shut down, with little prospect of resuming operation again, thanks to Russia’s destruction of a downstream dam and reservoir.

Despite Russia’s invasion of Ukraine, weaponization of energy, and shocking treatment of Zaporizhzhia’s equipment and personnel, the Kremlin-owned Rosatom remains a leading exporter of nuclear energy technology.

Rosatom’s success in the global market means that every time Rosatom sells a reactor, the Kremlin cements a century-long relationship with another country, from start of construction through the eventual decommissioning of the plant. The geopolitical repercussions should worry the West.

For instance, Russia is currently supervising the construction of four large reactors that are expected to supply about 10% of Egypt’s electricity. Workers have just started pouring concrete for the fourth unit.

In America, even our nuclear energy industry is a precarious customer of Rosatom for nuclear fuel enrichment. There have been initial moves to decouple from Russia; including the stockpiling of fuel by U.S. nuclear power plants, announcements by Western companies to ramp up fuel production of low-enriched uranium, or LEU —but at inadequate levels to replace Russia — and a $500 million program by the U.S. Department of Energy to jumpstart the domestic production of high-assay low-enriched uranium, or HALEU, fuel for powering advanced reactors. Russia is currently the world’s only supplier of HALEU.

If we are to secure our nuclear energy supply chain, let alone compete against Putin, we must expand our domestic enrichment production capabilities at once. The Senate-passed Emergency National Security Supplemental Appropriations Act seeks to ban the import of Russian-produced LEU and HALEU. This legislation, currently awaiting consideration in the House, could significantly bolster our security through the inclusion of domestic fuel production investment provisions.

Rosatom’s all-inclusive sales pitch is particularly attractive to first-time buyers. Rosatom offers financing and fueling packages. They will even own and operate the reactors for you. This arrangement, while convenient, gives Russia an extreme level of control over the host country’s energy security. Unfortunately, the main alternative to Rosatom is China, where countries like Pakistan are turning for their nuclear energy needs.

Thanks to a vibrant domestic industry supported by market incentives and federal government backing, the U.S. was once the world leader in exporting nuclear reactor technology, along with safety and nonproliferation standards.

The upcoming years present a golden opportunity for nuclear energy, driven by the global surge in electricity demand as nations strive to improve living standards, decarbonize economies and modernize infrastructure.

Smaller, American-designed advanced nuclear reactor designs, which are struggling to deploy in the U.S., are particularly well-suited – and the right size – for countries with less robust power grids. However, when these nations with growing electricity needs turn to nuclear power, they are not buying it from us. To combat climate change and secure our global standing, the U.S. must streamline the deployment of advanced reactors and begin exporting these technologies.

In their Declaration to Triple Nuclear Energy by 2050, announced in November at the United Nations’ COP28 climate change conference, the U.S. and over 20 other countries called on international financial institutions to craft nuclear-inclusive lending policies. A rapid, large-scale deployment of new reactors worldwide hinges on ending the finance bans against nuclear energy projects by multilateral banks, such as the World Bank.

Securing financing for commercially-oriented nuclear energy projects is critical for American suppliers to compete against adversarial state-owned entities. Along with licensing reforms at the U.S. Nuclear Regulatory Commission, this can be achieved by empowering the U.S. Export-Import Bank and the U.S. International Development Finance Corporation to facilitate greater investment and support for nuclear energy abroad.

Introduced legislation like the bipartisan International Nuclear Energy Act (H.R. 2938) and the bipartisan International Nuclear Energy Financing Act (H.R. 806) aims to boost U.S. nuclear energy exports. These bills propose to create a Director of Nuclear Energy Policy for inter-agency coordination and instruct the U.S. Executive Director at the World Bank to advocate for nuclear energy assistance and the elimination of financing barriers. Furthermore, H.R. 806 would allow U.S. representatives at other multilaterals, including regional development banks, to support nuclear energy projects.

The passage of these bills — particularly, in time for this year’s COP29 in Azerbaijan — would be welcomed by prospective buyers, investors and energy suppliers as a clear indication that American nuclear energy is poised for a resurgence on the world stage.

Source: Utilitydive.com

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Whatever one thinks about its causes, course, and consequences, the war in Ukraine rages on. That unavoidable fact has brought many in Europe to something of an epiphany. In late February, at a summit of European leaders in Paris, French president Emmanuel Macron asserted that “[t]his is a European war,” and asked his fellow leaders, “Should we delegate our future to the American electorate? The answer is no, whatever their vote.”

There’s a lot to unpack in this declaration, but it was surely on the minds of those gathered that, if Macron’s assertion is to have any weight, then, as British commentator Daniel Johnson put it, what “really needs to happen . . . is for German industry to switch from making cars to armaments—from butter to guns—before it is too late. If America is starving Ukraine of ammunition, Europe must step up.”

But could it?

War concentrates the mind. But the jury is out on whether European leaders are really connecting all the dots. Set aside the issue of money (and that’s a lot to set aside, given the scale of military investments); the bigger challenge is that Germany is in the process of self-deindustrialization, along with much of the rest of Europe.

Germany’s long-standing anti-hydrocarbon energy policies have created higher-cost energy, triggering the diminution and even exit of major industries. That’s because building machinery is not only energy-intensive but also particularly dependent on hydrocarbons. Consider that, compared with two decades ago, Germany’s overall industrial energy costs are up some 200 percent. German industrial-electricity costs, in particular, despite policies to insulate industries (not consumers), have been rising and now run nearly 300 percent higher than two decades ago—and that’s after coming down from the recent, crippling price spike caused by the realignment of energy flows after the invasion of Ukraine.

The effects of Europe’s price-hiking energy policies are clear in one fact: the output—in tons, not dollars—of that continent’s petrochemical industry has been steadily declining over the past two decades and has now collapsed to a half-century low. That may excite the ban-plastic-straws crowd, but in the real world, it takes hundreds of megatons a year of petrochemicals to produce nearly everything that civilization needs, from energy-saving insulation to windmill blades to all manner of medical and military products. If Europe’s current energy path is not reversed, it’s no exaggeration to say that Germany won’t be making cars or tanks.

The illusion that nations can casually tinker with or ignore the “old” energy-intensive industries in favor of modern services arises from a failure to recognize that all services are built on manufactured products and industrial supply chains. The costs of the latter are ignored when energy is cheap. And the illusion that there are easy, cost-effective energy alternatives to, say, using coal to make steel, natural gas to produce fertilizer and high-performance ceramics (used everywhere, including for armor), or oil for powering vehicles (including military ones) arises from naïve proposals that call for reshaping entire industries overnight through mandates and taxes.

Like the proverbial frog in the slowly boiling pot, the cumulative damage done by misguided energy/industrial policies takes time to become obvious. It’s obvious now. Two decades of anti-hydrocarbon green energy pursuits have raised Europe’s energy costs. Not so in China, Russia, or the United States (yet).

Of course, everyone knows the motivation for Germany’s energy policies: to reduce carbon dioxide emissions. And German emissions have declined by about 20 percent compared with two decades ago. But it also bears noting that the increased emissions from China over just one year wiped out all the (expensive) German reductions.

Creating an era of high-cost energy is a double-edged sword. It not only leads to the loss of both existing and new industrial production but also robs the economy of capital that could be used elsewhere, not least for military preparedness.

Over the past two decades, Germany has squandered something like $2 trillion, likely more, to achieve an “energy transition” that will accomplish nothing significant. That $2 trillion total comes from two costs. First there’s the nearly $1 trillion spent on subsidizing wind and solar machines built with the goal of nearly doubling the size of that nation’s electric grid, even though total electricity production grew by less than 10 percent. The effect was nearly to triple Germany’s electricity costs, which, in turn, drained another $1 trillion from the Germany economy over this period.

In economic terms, spending a lot more to get only a little more output is the inverse of productivity. Depressing productivity not only enervates economies (by contrast, U.S. GDP over that period grew three times as fast as Germany’s), it also reallocates precious capital away from more productive or more important purposes.

It’s ironic, and indeed perhaps tragic, that the squandered $2 trillion roughly equals Germany’s cumulative two-decade underinvestment in its NATO commitment. Adding to that irony, as Germany’s finance minister observed last year, the German malinvestment in energy domains was made possible in large measure by imports of cheap Russian natural gas.

Meantime, exports of oil and natural gas continue to be the primary sources of revenue for the Russian economy and war machine. The West’s imposition of sanctions on purchasing Russian fuel did little to change the equation. Instead, Russian sales shifted to Asia. And because of sanctions, those fuels have been purchased at a discount, thereby giving China and other buyers an economic benefit for their industries.

Energy and wars are inextricably linked. Wars have been fought over energy, and warfighting consumes energy. The Ukraine conflict is consuming oil at a furious rate, leading to carbon dioxide emissions wiping out over half of Germany’s reduced emissions. And low-cost energy is essential for fueling the industries that build war machines.

As Germany has learned, decisions its leaders made years ago have consequences today. Meantime, U.S. decisions made years ago are what led to a massive export infrastructure for liquified natural gas (LNG)—a capability that was the major reason Germany could replace most Russian gas quickly. (The Biden administration’s “pause” on LNG exports has sent a chill into the necessarily long-term planning for that industry.) Meanwhile, Qatar, the world’s second-biggest LNG supplier, has announced a major acceleration in its plans to expand export capabilities. Given the history of the Middle East, one might reasonably ask, “What could possibly go wrong?”

In Carl von Clausewitz’s On War, we find one of many truths: when it comes to war, the “best strategy is always to be very strong.” The essential first-order feature of that aphorism is economic strength, which is what enables nations to build and field strong militaries. It is impossible to have a strong economy without massive, reliable supplies of cheap energy. In Germany, England, and much of Europe, we’ve seen the inverse of this: expensive policies pushing an “energy transition” to become hydrocarbon-free. Sadly, the only transition Europe has seen is one in which it has moved from strength to weakness. One can only hope the United States does not follow this path.

Source: City-journal.org

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Fighting energy poverty is a cause many liberal organizations claim to champion, and often the solution they propose is a transition away from fossil fuels. As energy costs rise and people take a closer look at the negative effects energy transition has on the problem, that may start to change.

Rising costs

A recent report from the Rocky Mountain Institute, a Colorado-based anti-fossil fuel nonprofit, estimated that in the U.S., 1 in 7 families live in energy poverty. The study then goes on to say that “shifting away from fossil fuels and toward renewable energy sources should reduce the prices all consumers pay to electrify and fuel their homes.”

The share of energy consumption from wind and solar power has increased from 0.5% in 2005 to nearly 15% in 2022. At the same time, since 2005, the average price for electricity in the U.S. has increased from 5 cents per kilowatt hour to 17.3 cents per kilowatt hour in February 2024.

Renewable energy proponents promised that wind and solar energy would produce lower energy bills, but now that the so-called energy transition is nearing its 20th year with electricity rates rising higher than inflation, conservatives are taking up the cause of energy poverty and pointing to green energy as the primary culprit.

During a House Committee on Natural Resources in April 2023, Rep. Harriett Hageman, R-Wyo., grilled Interior Secretary Deb Haaland about her knowledge of the term “energy poverty.”

Hageman started out asking if the Interior Department had approved any new coal leases during Haaland’s tenure. Haaland said she would have to get back to Hageman on the answer.

“Madam secretary, do you believe energy poverty is a good thing?” Hageman then asked Haaland.

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Cliched talking points aside about all countries being considered by the RIC core of BRICS as equals and third parties’ sensitivities not influencing any of their bilateral relations, the reality is altogether different in practice. Sensitive balancing acts and the “politics of affection” sometimes result in the formulation of policies that contradict those aforesaid points for the “greater good”.

Russian Presidential Aide Yury Ushakov revealed in an interview with TASS last week that his country plans to extend invitations to the leaders of the CIS, Eurasian Economic Union, and the SCO to attend the “Outreach”/“BRICS Plus” Summit during the association’s annual one in Kazan in October. This is part of Russia’s plan to transform BRICS into a multipolar discussion club and economic integration platform. The problem is that India might still be offended by Pakistan’s participation and could boycott in protest.

It was already suggested that “Russia’s ‘Outreach’/’BRICS Plus’ Invite To Pakistan Shouldn’t Ruffle India’s Feathers” since “Russia Will Only Extend Perfunctory Support For Pakistan’s Membership In BRICS”. Although bilateral relations are better than ever, they’re incomparable with Russian-Indian ones. The Intercept’s report last September that Pakistan had indirectly supplied shells to Ukraine and the latest concerns that it’s now providing armed drones too also cast a pallor over Moscow’s ties with Islamabad.

Furthermore, Pakistan’s post-modern coup regime that came to power after April 2022’s ouster of former multipolar Prime Minister Imran Khan has dillydallied on reaching a long-negotiated strategic energy deal with Russia, which has caused major annoyance in the Kremlin. Even so, these issues haven’t led to a worsening of ties, which their new ambassadors remain committed to expanding. They aren’t aimed against anyone else either so in theory there shouldn’t be any objection from India.

Former Indian Ambassador to Russia and incumbent Chancellor of Jawaharlal Nehru University Kanwal Sibal, who’s widely regarded as his country’s top expert on Russia, sees the situation very differently. He tweeted on Thursday that “China is backing Pak as BRICS member. India must firmly oppose not only this but any form of association. Leaving aside Pak’s ineligibility bcoz of its pol & eco drift, China must be rebuffed as payback for its opposition to India’s NSG membership & UN listing of Pak terrorists.”

Although no longer a serving diplomat, Ambassador Sibal’s insight on all matters concerning Russia is still relied upon by Indian policymakers for guidance. He’s also fondly remembered during his time of service in Russia as a close friend, is a contributor to RT, and his views are also taken seriously by policymakers there too. It’s in light of his tweet that Russia should possibly reconsider inviting Pakistan to participate in “Outreach”/“BRICS Plus” since this decision might not have been thought fully through.

As was already explained, both in the present text and the earlier cited piece on this subject, there isn’t anything troublesome about this in principle. Russia envisages BRICS transforming into a multipolar discussion club and economic integration platform, ties with Pakistan are better than ever despite the previously mentioned issues, and that South Asian state is already an SCO member alongside India. It therefore makes sense from that perspective for Russia to invite Pakistan to participate in this summit.

The wisdom of doing so becomes questionable, however, once the actual realities of BRICS, South Asian geopolitics, and Russia’s Sino-Indo balancing act are incorporated into this decision. The recent Sino-Indo rivalry and well-known tensions between India and Pakistan understandably impede multilateral efforts to accelerate the construction of a Multipolar World Order like they’re all officially interested in doing. It’s unimportant who the reader believes is to blame for this state of affairs since it’s the objective reality.

From India’s perspective, BRICS is at risk of Chinese domination due to Beijing being each member’s top trade partner, in which case multipolar processes might revert to bi-multipolar ones and thus risk a global Sino-US bifurcation at the expense of everyone else’s sovereignty if that comes to pass. China and Pakistan, meanwhile, have occasionally suggested via their media reports and commentary by friendly social media figures that India is the US’ “Trojan Horse” for dividing-and-ruling BRICS.

Russia’s approach as suggested by Ushakov is the most idealistic of all since it sincerely thinks that these mutual suspicions can be overcome in BRICS just like they were in the SCO. Ambassador Sibal’s tweet, however, hints that this is wishful thinking of the sort that President Putin cautioned his strategic forecasters against indulging in during a speech at the Foreign Intelligence Service in June 2022. The risks of inviting Pakistan to this year’s summit arguably outweigh the benefits as will now be explained.

For starters, the “politics of affection” between Russia and India that have kept ties solid over the past two years despite unprecedented Western pressure upon Delhi to distance itself from Moscow could be damaged if Russia became the first country to invite Pakistan to “Outreach”/ “BRICS Plus”. Their mutual goodwill towards one another that’s prevalent among policymakers and society alike is premised on the fact that neither has ever done anything against the other’s national interests throughout their history.

Even though Pakistan would only be invited to the “Outreach”/“BRICS Plus” Summit as part of the SCO per Ushakov’s plan, it would still shock Indians after China didn’t invite its “iron brother” to the same such event in 2022 when it virtually hosted that year’s summit, which was reportedly at India’s request. Pakistan’s conspicuous lack of participation occurred despite increasingly tense Sino-Indo ties and suggested that Beijing didn’t want Prime Minister Narendra Modi to boycott in protest.

Likewise, it can’t be ruled out that he might claim to be “too busy” or that “something has come up” as his “publicly plausible” explanation for skipping October’s Kazan Summit if Russia invited Pakistan despite India’s request not to, thus scandalizing their ties and risking a rupture within BRICS. To be clear, this scenario wouldn’t be supposed “proof” of India’s “Trojan Horse” role that China and Pakistan have claimed that it’s playing, but would be a natural diplomatic response to perceived disrespect.

After all, India respected Russia’s speculative request not to invite Ukraine to last year’s G20 Summit that it hosted despite immense Western pressure for Zelensky to at least appear by video, only to possibly be “thanked” by Russia inviting its Pakistani rival to this year’s “Outreach”/“BRICS Plus” Summit. India’s predictable reaction of boycotting the event in protest on a diplomatic pretext is exactly what China would probably do if Russia invited the Philippines with whom it’s also now in a tense dispute.

Russia’s ties with the Philippines are surprisingly strong despite Western influence over Manila, so much so that it recently approved India exporting jointly produced supersonic cruise missiles to this island nation even though the only country that they could foreseeably be used against is China. President Xi Jinping obviously wouldn’t feel comfortable if his Philippine counterpart was invited to Kazan as part of a blanket invitation to all ASEAN leaders for example and would thus likely boycott in that scenario.

China is a more important partner for Russia than the Philippines is just like India is more important for it than Pakistan is, so if Moscow wouldn’t risk offending Beijing by inviting the Philippine leader, then it follows that Moscow shouldn’t risk offending Delhi by inviting the Pakistani one. Cliched talking points aside about all countries being considered by the RIC core of BRICS as equals and third parties’ sensitivities not influencing any of their bilateral relations, the reality is altogether different in practice.

Sensitive balancing acts and the “politics of affection” sometimes result in the formulation of policies that contradict those aforesaid points for the “greater good”. With this candid observation in mind, it’s advisable that Russia considers quietly walking back Ushakov’s announcement about inviting the SCO leaders to the “Outreach”/“BRICS Plus” Summit in favor of only inviting the CIS ones. This would avoid inadvertently harming ties with India, risking the boycott scenario, and therefore rupturing BRICS.

Source: Korybko.substack.com

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Negotiations should be based on reality rather than some “wants,” the Russian president has said

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A legal debate over semantics of the U.S. EPA’s 2015 coal ash rules could decide whether groundwater-soaked coal ash can remain in place next to an Ohio power plant.

In oral arguments before the U.S. Court of Appeals for the District of Columbia last week, power companies argued the rules don’t specifically ban coal ash contact with groundwater, and that as a result the federal agency overstepped its mandate in 2022 when it ordered the closure and cleanup of a coal ash impoundment at the General James M. Gavin Power Plant in Cheshire, Ohio.

Attorneys for the EPA and the environmental organization Earthjustice argued during the March 7 hearing that preventing such groundwater contamination is exactly the point of the federal rules.

“We hope the judges come out with an opinion that’s clear and definitive that the rule says you cannot close when the waste is sitting in groundwater,” Gavin Kearney, deputy managing attorney for Earthjustice’s clean energy program, told the Energy News Network after the hearing. “We think the meaning of those words is clear already. But given what industry is pulling here, let’s just define it in a way that’s super duper clear so we can be done with that issue.”

There’s little debate about the existence of groundwater contamination from the 2,600 MW Gavin plant, one of the largest coal plants in the country. Its former owner, American Electric Power (AEP) bought the entire town of Cheshire in 2002, with most residents and businesses moving out, rather than address residents’ pollution concerns.

Two federal lawsuits, however, argue that the EPA’s recent demands essentially represent the unauthorized promulgation of a new rule, since they don’t believe that coal ash sitting in groundwater is explicitly identified as a violation of the 2015 federal coal ash rules.

“I think it’s clear,” said industry counsel Stephen Gidiere during the oral arguments, “that EPA has issued a new legislative rule,” by demanding in its January 2022 enforcement action that coal ash not sit in groundwater.

One of the lawsuits was filed by utilities that are wholly owned subsidiaries of AEP, which sold the plant to a private equity firm in 2017, but the plant still provides power to the utilities that are plaintiffs in the lawsuit.

The other lawsuit is filed by a group of LLCs and holding companies affiliated with power generators including Vistra Corp., as well as the Utility Solid Waste Activities Group (USWAG), a trade organization representing over 100 utilities, electric cooperatives and related organizations.

The 2015 coal ash rules mandate that at unlined coal ash impoundments that are infiltrated by water or causing contamination, the ash must be removed and placed in a lined landfill; an impermeable liner must be put in the impoundment; or engineering controls like pumps must be used to prevent contamination.

The federal rules set a deadline of April 2021 for unlined impoundments to stop receiving coal ash and begin closing in such a way that they do not cause or present a future risk of contamination. At many sites including Gavin, companies requested extensions to this deadline. The rules offered extensions if closing by that deadline was not feasible, but only if the site was in compliance with other aspects of the rules.

The EPA did little to enforce the rules until January 2022, when it issued a number of extension request denials, including for Gavin’s Bottom Ash Pond. Gavin’s extension request also triggered the EPA to review the site as a whole, and it found problems with contamination and compliance including with the Fly Ash Reservoir, an impoundment which was no longer receiving new coal ash.

The EPA’s decision says that: “taking Gavin’s data at face value EPA estimates that the closed FAR [Fly Ash Reservoir] could be sitting in groundwater as high as 64 feet deep in some locations and that as much as 8.2 million cubic yards (or as much as 40% of CCR in the FAR) could still be saturated — and would remain so indefinitely.” CCR refers to Coal Combustion Residuals.

In the oral arguments, Gidiere argued that the 2015 rules don’t necessarily mean that coal ash sitting in groundwater must be cleaned up.

The oral arguments before a three-judge panel parsed the definition of a “free liquid” that could be separated from coal ash, with the EPA and Earthjustice attorneys arguing that groundwater indeed is a liquid that could and should be separated from toxic coal ash.

“Once it becomes groundwater, it’s not a free liquid any more,” countered Gidiere, arguing that groundwater hence does not need to be kept separate from coal ash.

Kearney emphasized that the coal ash rules say unlined impoundments must be cleaned up if contaminated leachate is found in the groundwater monitoring required under the rules.

“Maybe if groundwater never moves you could have an unlined impoundment and still be okay,” Kearney said. “But at Gavin, this water is flowing through the waste, that’s generally what water does. It doesn’t just sit in the ground, it moves,” carrying leachate out of the impoundment.

Gidiere in the oral arguments said that if an impoundment is covered and rainwater or surface water no longer creates downward pressure on coal ash, the risk of contamination is removed. He argued that the EPA’s 2022 orders that coal ash cannot remain soaked with groundwater go beyond the requirements laid out in the 2015 rules.

“What EPA said in January of 2022, is if there’s an inch of groundwater in the bottom of 100 feet of dry CCR, that you cannot close the unit,” Gidiere said. “If you have basically wet sand in the bottom, you have to remove all that CCR.”

In response to questioning from the court, Gidiere could not identify impoundments that have only an inch of water, or any with less than 10% of coal ash saturated with groundwater.

“There are lots of sites like this one,” Kearney told the Energy News Network. “The Gavin site is a pretty egregious example, but we know there are lots of sites where coal ash is sitting in water.”

Earthjustice, the Environmental Integrity Project and other organizations have released analyses of groundwater monitoring data required under the rules, showing that the vast majority of coal ash impoundments nationwide are causing toxic leakage.

“The whole overarching point (of the federal rules) is that groundwater contamination is a big problem, it’s really unsafe and we have to prevent it,” said Kearney. “You can’t let water in (to a coal ash impoundment), you can’t let water out, you can’t let water just sit inside the impoundment.”

Source: Energynews.us

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This story was originally published by Canary Media.

One of California’s marquee programs for cleaning up transportation emissions is at a crossroads. Decisions made in the next few months could set the decade-and-a-half-old Low Carbon Fuel Standard on one of two very different paths.

One path, favored by fossil fuel and renewable natural gas interests, would lock in a market scheme that currently extracts billions of dollars per year from Californians at the pump and subsidizes crop-based and cow-manure-derived biofuels.

That would be a disaster, according to environmental advocates, who point to a growing body of scientific evidence showing that this approach, if extended until 2045 as proposed, would cause these biofuels to grow at a scale that would harm the climate and the environment.

The other path, proposed by environmental groups, transportation-decarbonization analysts and climate and energy researchers, would limit the scope of unsustainable biofuels in the program, and instead reorient it to support what experts agree should be California’s primary clean transportation pathway: electric vehicles.

To date, roughly 80 percent of LCFS funding has gone to combustion biofuels rather than electric vehicles. That’s simply incompatible with the state’s EV ambitions and needs, said Adrian Martinez, deputy managing attorney of nonprofit advocacy group Earthjustice — and the imperative to reduce emissions from transportation, which account for nearly 40 percent of the state’s greenhouse gas emissions.

“We’ve got to eliminate our reliance on combustion,” he said, but ​“the program as designed will continue to provide lucrative incentives for combustible fuels well into the future.”

The regulator in charge of the LCFS program — and this high-stakes decision — is the California Air Resources Board. CARB’s board, which comprises 14 voting members, 12 appointed by the governor and two by the state legislature, holds a host of responsibilities around California’s energy transition. Those include shaping the state’s nation-leading EV policy, as well as determining its broad plans for achieving long-term greenhouse-gas reduction goals.

Critics say the LCFS program’s increasing support for biofuels is in direct contrast to both the EV targets and the climate goals also overseen by CARB — and that the program has been captured by deep-pocketed industries trying to greenwash the continued use of combustion fuels.

CARB has a chance to reform the program with an upcoming vote, initially set for this month, but now postponed to an undetermined future date. But its pathway to fixing the problems that plague LCFS is murky and messy at best.

Right now, the staff managing the LCFS program hasn’t given CARB board members an opportunity to pick a climate- and EV-friendly alternative. Instead, a December staff proposal provides only one option for the board to vote on later this year: a set of policies that Earthjustice forecasts would direct $27 billion over the coming decade toward biofuels and worsen effects on the climate, the environment and the prices that Californians pay at the pump.

CARB does have another option, however — an alternative proposal laid out by CARB’s Environmental Justice Advisory Committee, created to advise the board on environmental-justice issues.

That proposal would cap the fast-growing share of crop-based renewable diesel flooding the state. It would also end the unusual structure that now allows biogas produced by dairy farm manure to offset a much higher amount of carbon emissions than any other source of alternative fuels.

And, importantly, it would make the core of the program — its carbon-offset marketplace — function in a much healthier way, proponents say. A torrent of cheap, polluting renewable diesel and dairy farm biogas credits have dragged down the price that LCFS credits can fetch for avoiding emissions, diluting the incentive to deploy new climate technologies and sapping what could be a key funding source for EV infrastructure in the state.

“The stakes are very, very high,” Martinez said. ​“That’s why you see so much attention focused on this — and a very broad and diverse coalition that is pushing for more systemic change to the program, versus more modest tweaks that will really just keep this market owned and dominated by fossil fuel interests.”

California’s Low Carbon Fuel Standard was born out of AB 32, the 2006 law that created the state’s carbon cap-and-trade market. Much like carbon markets, LCFS is meant to make companies pay for their carbon emissions by buying credits from technologies that reduce carbon emissions.

The program requires all fossil fuels refined and sold in California to meet increasingly stringent carbon-intensity targets. In practice, fossil fuel producers have to buy a bunch of LCFS credits from low-carbon transit sources operating in the state in order to comply. The goal is to create a system that taxes planet-warming fossil fuels to fund cleaner transportation alternatives.

But the LCFS has strayed from its initial focus on vehicle electrification and ​“advanced” non-crop-based biofuels to become ​“a swag bag for venture capitalists, big oil, big agriculture, and big gas, increasingly coming at the expense of low- and moderate-income Californians.” That’s how Jim Duffy, a 13-year veteran of the agency who served as branch chief of the LCFS program from 2019 to 2020 and retired in 2022, described the evolution of the program in comments filed with CARB.

Under the LCFS regulation adopted in 2009, dairy-manure-to-biogas projects did not receive special treatment compared to other sources of methane such as landfills and sewage treatment plants, Duffy wrote. Similarly, diesel fuels made from crops like soybeans were considered ​“only marginally better than fossil diesel.”

But in the years since, ​“the LCFS was revised to provide additional and unnecessary support to landfills and first-generation crop-based biofuels” and ​“to mitigate the methane problem created by the dairy industry itself,” Duffy wrote — despite the fact that evidence increasingly suggests that both sources harm the planet far more than they benefit it.

The result has been an increasing share of LCFS credits being supplied by renewable diesel and dairy-generated biogas.

(CARB)

CARB has justified these shifts with analysis indicating they will yield net positive climate impacts.

“The proposed amendments now under consideration will directly increase the program benefits in the most burdened communities, by reducing the carbon across the supply chain for fuels sold in California, as well as improving public health for fuels sold in California,” CARB spokesperson Dave Clegern said in an email to Canary Media. He cited data from CARB staff’s analysis of its proposal indicating that, by 2045, its plan will reduce nitrogen oxide emissions by 25,586 tons, cut greenhouse gas emissions by 560 million metric tons and yield public-health cost savings of nearly $5 billion.

But critics say the agency is failing to account for the full scope of climate harms that will be caused by its continued emphasis on biofuels.

They warn that the sheer scale of California’s program — totaling some $4 billion per year — is driving investment in the wrong transportation alternatives. The consequences are dire, they say — not just within the state, but across the country and around the world.

Take renewable diesel, a fuel made from fats and oils processed to be identical to fossil diesel fuel. The U.S. increased production of the fuel by 400% between 2019 and 2022, and it is set to double it again this year, according to Jeremy Martin, senior scientist and director of fuels policy for the Union of Concerned Scientists.

Unlike ethanol and biodiesel, which can only partially replace gasoline and diesel, renewable diesel has ​“no limit on how much can be blended,” Martin said. It could theoretically completely replace diesel fuel for trucks, buses and other vehicles. And California’s LCFS offers credits on top of the federal incentives the fuel receives, making the state the primary target of renewable diesel producers across the country.

As a result, the share of renewable diesel as a percentage of total diesel fuel use has skyrocketed in California compared to the rest of the U.S., as the chart below shows.

(Union of Concerned Scientists)

In a September meeting, Steven Cliff, CARB’s executive officer, highlighted a milestone for the LCFS program: As of mid-2023, California had ​“more than half of our diesel demand being met by non-petroleum-based diesel alternatives. This is a direct result of the LCFS program, and it’s bringing real climate and air-quality benefits to the state.”

In Martin’s view, that milestone is not a win, but a warning. It indicates that renewable diesel is ​“flooding the LCFS, drowning the policy — and it doesn’t make sense” on climate or environmental terms.

Once the demand for renewable diesel outgrows the supply of waste oils and other non-crop feedstocks that can be used to make the fuel in genuinely climate-friendly ways, it becomes highly likely that it will cause more greenhouse gas emissions than it will displace. Critics like Martin argue that demand has now reached this point, though it’s a contested question.

This additional demand for crop oils could mostly serve ​“to expand the cultivation of palm oil to replace the soybean and other oils made into fuel,” the Union of Concerned Scientists argued in comments to CARB. That, in turn, is likely to lead to more rapid deforestation in nations that produce large amounts of these crops, such as Brazil and Indonesia — an outcome that would cause far greater climate harms than whatever emissions reductions result from replacing fossil diesel.

To stop this, the Union of Concerned Scientists and other groups want CARB to set a limit on how much renewable diesel can receive LCFS credits. CARB staff’s proposal declines to set such a cap, citing renewable diesel’s climate and health benefits.

But CARB’s methodology is out of step with the latest science, according to multiple groups studying these issues. The Union of Concerned Scientists, for its part, says CARB’s analysis is ​“based on inaccurate claims of climate and air-quality benefits and associated health outcomes.”

In a recent comparison of five different models for evaluating the climate impacts of crop-based biofuels, the U.S. Environmental Protection Agency found that only CARB’s own model shows a positive carbon-reduction impact.

And while the agency has a proposal to limit deforestation harms by setting ​“sustainability guidelines” for crops being used for renewable diesel, it applies only to feedstocks grown in the U.S., Martin noted. That’s a problem: California is on pace to consume 10 percent of global soybean oil supplies for renewable diesel, meaning a significant amount of the crop oil produced for the program will be grown under conditions CARB cannot police, he said.

Given that reality, Martin said, ​“If California declines to act — if they say, ​‘This is evidence of success; look how little fossil diesel we’re using’” by replacing it with renewable diesel, ​“then, in fact, California is giving its support to a fuel that we know is unsustainable at these volumes.”

Source: Canarymedia.com

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