Energy News Beat

ENB Pub Note: Alexandra Sharp has interesting points on the Zelensky / President Trump conversation on the cease-fire. Secretary Chris Wright said on Fox News last night that the US could run the Ukrainian nuclear plant without US troops boots on the ground. While this is an interesting twist, having the US own the electric grid and power plants, I am not sure this is a great way forward. A working nuclear plant is a money cash cow, while one in disrepair may be a money pit. Still, having some assets come out of the negotiations that we would own is not a bad thing and potentially could end the war. Since it is rumored that Zelensky has offered the mineral rights to the UK and EU besides the US, it seems like he may have oversold the value of the minerals, and that side of the equation may be worthless. I would hope for the Ukrainian’s and Russians’ sake that the war ends, the killing stops, and new elections take place, as it appears that Zelensky is compromised through corruption. Just look at his ski resort in France, his 20 million dollar home in Flordia, and his wife’s expensive car. 

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Energy News Beat

Accompanied by the managing director of EGAS, Yassin Mohamed, Badawi met with officials from the German government to discuss the contractual terms for the lease of the FSRU, according to a statement by the Egyptian Ministry of Petroleum and Mineral Resources on Wednesday.

The two sides had started negotiations and discussed technical issues related to the lease of the FSRU at the end of February during meetings held in Cairo between EGAS officials and the German Ministry of Foreign Affairs, the statement said.

The statement did not say whether the two countries have now signed the final charter agreement or whether negotiations will continue.

The Egyptian Ministry of Petroleum and Mineral Resources revealed plans to sub-charter the FSRU from the German government in a statement earlier this month after Badawi met with German government officials at CERAWeek in Houston.

During that meeting, the two countries agreed to arrange a visit by a delegation of Egyptian specialists to Germany by the end of this month to finalize the contractual terms for the unit’s charter.

Private firm Deutsche ReGas recently announced that it had terminated the charter contract for the FSRU Energos Power, one of the two FSRUs operating at the Mukran LNG import terminal, with the German government.

Energos Infrastructure, a part of US asset manager Apollo, owns this FSRU.

The charter deal with the German government, which started in 2023, is for ten years.

According to its AIS data, the FSRU was located offshore Denmark’s Skagen on Thursday.

Egypt shifted from being an LNG exporter to an importer early last year due to declining domestic gas production and rising demand for cooling amid multiple heatwaves.

To support its growing need for natural gas, Egypt currently hosts the 170,000-cbm Hoegh Galleon FSRU at the Sumed port in Ain Sokhna, with a second unit, the 160,000-cbm Energos Eskimo, set to arrive in June.

In December 2024, Egypt’s EGAS signed a deal with US LNG player New Fortress Energy to charter a second FSRU.

This deal is for Energos Eskimo, owned by Energos Infrastructure.

EGAS said the charter of the second FSRU will help secure the growing domestic demand for natural gas, especially during peak summer periods, and aligns with directives to ensure stable electricity supplies from natural gas.

Egypt currently imports LNG via Hoegh Evi’s Hoegh Galleon, which is located in Ain Sokhna.

Source: Lngprime.com

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Energy News Beat

• Revoking Chevron’s license in Venezuela could drive oil sales back underground, reducing transparency and benefiting corrupt intermediaries.
• Sanctions on Venezuela have had mixed effects.
• Removing licenses may disrupt Venezuela’s foreign exchange market and private sector.

On 26 February, U.S. President Donald Trump announced his intention to end General License 41, which allowed Chevron to operate in Venezuela despite sanctions. Meanwhile, there are other “specific licenses” for oil and gas companies at risk. The U.S. Treasury’s Office of Foreign Assets Control (OFAC) had created a system to monitor at least part of Venezuela’s oil industry by waiving sanctions for certain American, European, and Indian companies but with strict limitations.

Four corporations that were authorized by licenses or comfort letters—Chevron, Repsol, Maurel et Prom, and Eni—contributed to a production of 325,000 barrels per day (bpd) in January, to the country’s total of 1,068,000 bpd, according to PDVSA, the state-owned energy company. Mukesh Ambani’s Reliance Industries and Harry Sargeant’s Global Oil were also authorized to ship Venezuelan petroleum products.

What does it mean if the “Chevron License” is over? Is there a way to know who will be the winners and the losers after Trump’s decision? How will the revocation impact the oil market, geopolitics, and the Venezuelan economy?

We have one benefit. We have seen how financial and economic sanctions were introduced and intensified from 2017 to 2020 under the first Trump term and then how they were eased via licenses under Biden. While there are many more variables at play affecting Venezuela’s politics, economy, and its oil sector, we can form a good understanding of who wins and who loses with tougher sanctions.

What was the purpose of the Chevron license? The Chevron authorization, and later the specific licenses, were carefully designed to maximize recouping debt and minimize cash flows to the Venezuelan state in a country with an oil sector that has the highest government take in the world.

Juan González oversaw policy towards Caracas under the Biden administration, as National Security Council Senior. He was the lead designer of General License 41. He says that the idea was to allow Chevron to recoup its debt while bringing transparency to the sector and limiting cash flows to the Maduro government.

“Before the Chevron license, Venezuela sold all its oil on the black market, pocketing every dollar. With the license, most of the oil revenue [from joint ventures with Chevron] went to pay off debt, leaving the regime with less money—not more. Revoking it doesn’t punish Maduro; it just drives oil sales back underground, undermining U.S. leverage,” says Gonzalez. Under the license, “the regime only got taxes and royalties, and the rest went to Chevron.”

Many foreign policy analysts have argued that sanctions can work as a “shock and awe” weapon but that they lose effectiveness over time as targeted states gradually adapt. While some argue that revoking the Chevron license will push oil sales underground, proponents of stricter sanctions believe that cutting off all revenue streams will increase economic pressure on the Maduro government, potentially leading to political concessions.

Who benefits? Corrupt officials like opaque systems.

A strict sanctions environment is where shady intermediaries and corrupt officials are allowed to flourish. The targeted state has no choice but to hide data on production, exports and revenue, at the expense of transparency and accountability.

In the Venezuelan case, we have seen shadow fleets charging higher freight costs for older, rundown tankers. Shipping companies also had to turn off radars at sea and carry out ship-to-ship transfers. There would also be added layers of separation between PDVSA and the final buyer. Altogether, exports became riskier and more costly, benefitting intermediaries.

Certain PDVSA managers have also profited. There is the infamous corruption scandal where the then Oil Minister Tareck El Aissami flourished under the strictest period of sanctions. In March 2023, it was leaked to Reuters that PDVSA had $21.2 billion in unpaid bills from intermediaries.

El Aissami managed the oil sector from April 2020 until his downfall in March 2023, when the scandal was uncovered. In that time, he constructed an opaque system to produce and sell Venezuelan oil. He did manage to ramp up output, from a trough of 393,000 bpd in June 2020 to 754,000 bpd when he was forced to resign.

But with virtually all transactions carried out with cash and crypto, and sales numbers hidden from the public, El Aissami and his associates were able to divert billions of dollars. The final count of all the damages caused is not available to the public.

“Grey market” importers in China buy at a discount

In a scenario of all-out sanctions, even major Chinese companies shied away from Venezuelan oil. But there are always willing buyers, in black or “grey” markets, with a low-enough price. And that is the key: in the period from 2019 to 2022, the discount of Venezuela’s Merey to the Brent benchmark could be as high as $35.

PDVSA still exports part of its crude via Malaysia, where it is rebranded, and then on to China. However, their share fell in the last two years as more North American, European and Indian buyers were allowed by the OFAC to enter the market.

In the book On Sanctions in Venezuela, economists Asdrubal Oliveros and Juan Palacios show that in 2023, the U.S., Spain and India represented 34% of Venezuelan oil exports, while China and Malaysia took 51.6%. In 2024, their shares virtually inverted, with 56.2% going to the first group and 26.8% to the second.

Diluent imports: Iran says “take it or leave it”

The Orinoco Oil Belt, the formation with the largest known reserves of crude, has mostly extra heavy oil, like bitumen. It is too sticky even to move through pipelines, so it needs to be mixed with diluents, like gas condensate at a ratio of 3.5 to 1. Later, other petroleum products are needed to refine heavy crude for a final product, like car fuel.

Many of these diluents are produced locally, but a vital share is imported. For decades, the U.S. was the main oil partner, and thus provided the lion’s share. At the toughest point of sanctions, Iran became the sole provider of diluents for Venezuela.

Currently, there are series of OFAC licenses and comfort letters for U.S., European and Indian companies to swap vital inputs for Venezuela’s oil industry, as a way to pay part of their bill with PDVSA.

However, between 2020 and 2022, Iran was the only source of diluents. There really was no one else. In Venezuela, many will remember waiting with anxiety for the arrival of Iranian tankers, also targeted by sanctions themselves, which would be essential to produce car fuel. Many external observers then were shocked to see that a petrostate needed oil imports.

An Atlantic Council paper shows that from July 2021 and July 2023, Iran gave Venezuela 35 million barrels of condensate, in return for 47 million barrels of crude, with most shipments sent for China at steep discounts. That was not a bad deal for Iran.

The post Chevron Out, Black Market In? The Fallout of U.S. Sanctions on Venezuela appeared first on Energy News Beat.

 

Energy News Beat

A federal judge blocked the EPA from clawing back some $20 billion in climate money shoved out the door by a lame-duck Biden admin.

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A federal judge on Tuesday blocked the EPA from clawing back some $20 billion in climate money the Trump administration said was shoved out the door by a departing Biden administration. [emphasis, links added]

U.S. District Judge Tanya S. Chutkan said the Environmental Protection Agency gave “no legal justification” for why it tried to reclaim the money or gave the recipients of the money a chance to object or challenge the decision.

She issued a temporary restraining order against the EPA.

“To be sure, agencies can decide to re-evaluate their programs, or they may decide to end agreements or federal awards. But those decisions must be made lawfully and in accordance with established procedures and relevant rules and regulations,” the judge wrote.

The money had become symbolic of the Biden administration’s last-minute efforts to “Trump-proof” the government.

Project Veritas late last year captured an official revealing EPA’s plans to push money out the door, in what he compared to “throwing gold bars off the Titanic.”

New EPA Administrator Lee Zeldin made it his mission to recapture the money, and earlier this month he declared a success.

“The days of ‘throwing gold bars off the Titanic’ are over,” he said. “I have taken action to terminate these grants riddled with self-dealing and wasteful spending. EPA will be an exceptional steward of taxpayer dollars dedicated to our core mission of protecting human health and the environment, not a frivolous spender in the name of ’climate equity.’”

He said the Biden administration could not spend all the money before it left but it “parked” the funds at Citibank.

Mr. Zeldin pressed Citibank to stop releasing the money to the organizations that won the grants from the Biden administration.

The money was part of the Democrats’ 2022 climate budget bill, the Inflation Reduction Act, which pumped a massive amount of taxpayer money into clean energy and environmental grants.

Read more at Washington Times

 

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Energy News Beat

Germany’s incoming chancellor Merz is facing accusations of betraying voters after bending to the leftist demands on spending and climate.

​Germany’s incoming chancellor is facing accusations of betraying voters after bending to the leftist demands on spending and climate to push forward fresh defense spending. [emphasis, links added]

Despite the agenda of the formerly governing Social Democrats (SPD) and the Greens being resoundingly rejected by German voters in last month’s federal elections, the incoming and supposedly centre-right-led government of Christian Democratic Union (CDU) boss Friedrich Merz continues to cave to their demands after rejecting a coalition with the populist right-wing Alternative for Germany (AfD).

On Tuesday, the Bundestag parliament will vote on a change to the German constitution to lift debt-spending restrictions to allow for a trillion-euro package on defense and infrastructure, public broadcaster DW reports.

After the Greens shot down the initial proposals last week, Merz agreed to commit €100 billion of the €500 billion earmarked for infrastructure over the next 12 years to “climate protection.”

Going further, the incoming chancellor also capitulated to demands that a commitment for “additional investments to achieve climate neutrality by 2045” be written into the constitution.

On Sunday, Merz said of the bill: “I’m not Chancellor yet. But I can guarantee you: I certainly won’t be a Green. But a chancellor who faces environmental responsibility.”

While Merz and the CDU/CSU are currently in coalition talks with the SPD to form a “black-red” government, it is expected that talks could last until Easter or longer before a new government takes hold in Berlin.

However, the incoming chancellor is attempting to institute the constitutional changes before the new parliament even convenes on March 25. Therefore, an extraordinary session has been scheduled for Tuesday to hold the vote.

The urgency to pave the way for the trillion-euro package is driven by the change of the makeup of the parliament next week when the Alternative for Germany and the radical Die Linke (The Left) party will have enough seats to block the constitutional reforms.

Yet even under the current makeup of the Bundestag, and that changes to the Basic Law of Germany require a two-thirds vote, the Green Party is in a position to block the bill and thus was able to demand more concessions from the supposedly center-right Merz.

Commenting on the deal, AfD leaders Alice Weidel and Tino Chrupalla said in a joint statement on Friday:

“Friedrich Merz has once again been taken for a ride and has bowed to the demands of the Green Party’s election losers. The Greens have apparently won their demands across the board in talks with the CDU/CSU and SPD. The outcome of the negotiations shows once again that Friedrich Merz is willing to pay any price to move into the Chancellery. This does not bode well for our country.

“Friedrich Merz is bending the constitution, disrupting public finances, and robbing current and future taxpayers in order to buy himself a chancellorship at the mercy of the Green-Left Party. That’s not what the citizens voted for three weeks ago.”

Top image via DW/YouTube screencap

Read rest at Breitbart

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Energy News Beat

Superfund laws and similar legislative shakedowns target energy companies for millions or billions in climate cash and do nothing for the planet.

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In an attempt to commit legislative thievery, New York Democrat Governor Kathy Hochul signed a bill into law on December 26 dubbed the “climate superfund” law. [emphasis, links added]

The new state law assigns a handful of energy producers sole blame for climate change and imposes corresponding financial responsibility for damages alleged to have resulted from it in the past, or which may occur in the future.

It compels the oil and gas companies to pay a shared $75 billion fine into a so-called “climate superfund.”

New York was the second state to launch such a superfund. Vermont did so last July, and it is battling a legal challenge to its law filed on December 30.

A civil lawsuit challenging the New York law has also been filed in federal court on February 6 by state attorneys general, representing 22 states that will be harmed if New York’s law can extraterritorially limit energy production in those states.

The states persuasively allege multiple counts of unconstitutional overreach.

These climate superfund laws are, in effect, blue states’ attempt to find a new way to legislatively do what they’ve been prohibited from doing in court.

Blue states and blue municipalities have been trying to convince courts that they have the power to invent new liabilities under the guise of public nuisance or consumer fraud based on contrived theories that torture the foundational limits of tort law.

But they’re floundering in that arena. One by one, the courts are increasingly dismissing the adventure.

For example, on February 5, a New Jersey Superior Court dismissed New Jersey’s climate lawsuit against ExxonMobil, Chevron, ConocoPhillips, Phillips 66, Shell, and the American Petroleum Institute, ruling that climate change claims are preempted by federal common law.

This adds to the downward momentum of climate change suits. Cases initiated by Baltimore, San Francisco/Oakland, New York City, and many others have been similarly dismissed.

Scheduled for March 20, a District of Columbia suit against the energy companies will be heard in the D.C. Superior Court, considering the defendants’ motion to dismiss.

Don’t bet on the legislative efforts by New York, Vermont, and others following the climate superfund legislative model faring any better.

Like the failed climate cases, the superfund law is New York’s attempt to carve out climate policy that, under the Clean Air Act, is ground claimed by the federal government to the exclusion of the states.

Federal law preempts attempts by the states to get involved in controlling transboundary pollution. On that basis alone, courts can enjoin state efforts when they meddle in an area preempted by federal legislation.

But there are plenty of other defects too. It’s easy to see the climate superfund law as cash-strapped New York’s blatant attempt to pick a select few out-of-state pockets to pay for a problem with innumerable contributors.

Compelling a few energy producers to cough up hundreds of millions if not billions of dollars in what amount to fines, no matter how the fees are stylized, is quite simply excessive.

And the Constitution’s Eighth Amendment prohibits the imposition of “excessive fines” and the U.S. Supreme Court has recently shown a propensity to give that clause real meaning and enforcement. 

These laws violate that guarantee precisely because they impose a penalty for perfectly legal activities.

Fairness problems also come into play with these laws because they are retroactive — choosing the fund contributors based on past market share as a way to punish them for being successful at lawfully keeping our lights on, our homes warm and our economy running.

The Fourteenth Amendment demands that state law shall not “deprive any person of life, liberty or property without due process of law,” and the courts make clear that due process does not exist when laws apply retroactively and punish past lawful conduct.

These laws violate that guarantee precisely because they impose a penalty for perfectly legal activities.

Indeed, they remain legal today. New York has not chosen to outlaw energy production. It couldn’t get away with that. But it is perversely trying to have its cake and eat it too. Energy production is legal, you’ll just be fined if you continue to do it.

Like the failed climate cases, the superfund law is New York’s attempt to carve out climate policy that, under the Clean Air Act, is ground claimed by the federal government to the exclusion of the states.

Yet another legal infirmity that dooms these new climate superfund laws is that they dispense with the obligation to prove causation – another requirement before liability can attach if due process is to be maintained.

Normally, a plaintiff has a burden to prove that the defendant committed a wrong and that the wrong is the proximate cause of the injury. And, the defendant’s liability is limited to that portion of an adverse effect that they caused and no more.

A few cannot be held responsible for the emissions of the world even assuming the state overcomes the first hurdle of proving that even these few had an illegal effect on the climate.

You cannot simply legislate away fundamental fairness, reflected in our causation requirements, by imposing a penalty through the legislature that you could not impose through the justice system.

Courts adjudicating the challenges to the New York and Vermont laws, and other courts that will undoubtedly receive cases from the laws other follower states are bound to adopt, should stand firm on constitutional principles and invalidate these laws.

Fleecing has never been a legitimate end of the state.

Read more at Fox News

 

The post Climate Lawsuits Are About Grabbing Green, Not Going Green. appeared first on Energy News Beat.

 

Energy News Beat

Dems are using a GAO memo to argue Trump and the GOP can’t repeal a Biden EPA waiver on California’s EV mandate, but experts call it nonbinding.

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Democrats are relying on a recent memo from the Government Accountability Office to argue that President Donald Trump and congressional Republicans can’t pass a bill repealing a Biden-era waiver allowing California to mandate electric vehicles in the state. [emphasis, links added]

But legal experts say the memo—whose authors include a prominent DEI activist—isn’t legally binding and relies on dubious reasoning.

The Government Accountability Office (GAO)—which conducts audits and analyses for Congress but has minimal legislative authority—published the memo earlier this month just two weeks after Democratic senators Adam Schiff (Calif.), Alex Padilla (Calif.), and Sheldon Whitehouse (R.I.) asked it to investigate the issue.

Media outlets then reported that the memo determined a bill to reverse the Biden-era action was “illegal” and that the office, therefore, “blocks” such a bill.

The office’s memo presents a potential roadblock to Trump’s energy agenda, a key tenet of which involves revoking electric vehicle mandates.

Democrats, who cheered the opinion immediately after it was published, may request that the Senate parliamentarian weigh in on the issue and consult the GAO’s opinion.

If Democrats are successful in using the opinion to block the bill, the California electric vehicle mandate can only be overturned through a formal Environmental Protection Agency rulemaking process that would take years to complete and likely attract legal challenges.

However, experts say there are key legal deficiencies in the GAO’s opinion.

“It’s just sloppy work,” Michael Buschbacher, a former counsel at the Department of Justice’s Environment and Natural Resources Division, told the Washington Free Beacon. “I think the goal of what they were doing was to insert themselves in this process.”

The quick turnaround on the document raises questions about the level of involvement from the Democratic lawmakers who requested the opinion—the office usually takes months to complete analyses, not a couple of weeks.

Notably, one of the coauthors of the GAO’s memo is Shirley Jones, the office’s managing associate general counsel.

Jones is an outspoken DEI activist who recently served as the president of the advocacy group Blacks in Government, once applauded former president Joe Biden’s executive order on DEI in the federal workforce, and said in a 2021 interview that women who work in the government face “microaggressions” and are often subjected to “mansplaining.”

In December, in one of its final actions during the Biden administration, the Environmental Protection Agency granted California a waiver under the 1970 Clean Air Act that allows it to issue vehicle emissions regulations that are stricter than federal emissions standards, an action that green-lit the state’s electric vehicle mandate that will kick in later this year.

The waiver allows other states to adopt California’s rules, something 12 states have opted to do.

According to the GAO’s memo authored by Jones, the Biden administration’s action is not subject to a CRA (CRA) resolution because it is a waiver, not a rule or regulation.

The CRA allows Congress to pass resolutions via a simple majority floor vote to reverse actions finalized by federal agencies.

A successful CRA resolution would immediately overturn the Biden-era waiver and California mandate, meaning the Trump EPA wouldn’t have to overturn it through a formal rulemaking process, which could take years and attract legal challenges.

Such a resolution is the Trump administration’s preferred course of action—in February, EPA administrator Lee Zeldin submitted the waiver to Congress for review.

One month earlier, Rep. John Joyce (R., Pa.) introduced the Preserving Choice in Vehicle Purchases Act, a CRA resolution that would overturn the waiver and is poised to receive a floor vote in the near future.

It’s like the [GAO] wrote an op-ed basically…

Buschbacher, the former Justice Department official, noted that the GAO’s opinion fails even to acknowledge Section 177 of the Clean Air Act, the provision that allows other states to adopt California’s standards.

That, according to Buschbacher, makes an EPA waiver a “rule of general applicability” since it has far-reaching nationwide impacts, a bar that it must clear to be considered a “rule” under the CRA.

Buschbacher and Jimmy Conde, who are both partners at the law firm Boyden Gray, wrote a paper this month that argued in favor of Congress’s authority to use the CRA to overturn EPA waivers.

The paper states that the GAO, an unelected part of the federal bureaucracy, does not have the authority to restrict Congress from making law, that it is a longstanding precedent that all actions an agency submits to Congress are treated as rules, and that EPA waivers have nationwide impacts.

“What GAO has previously said is that submission of a rule or an action to Congress—any action to Congress, even when the agency thinks it’s not a rule and submits it only out of an abundance of caution—gets treated as a rule,” Buschbacher said about the GAO’s past opinions.

Ultimately, Buschbacher said the memo should have little impact on Congress’s ability to pass a bill overturning the waiver green-lighting California’s mandate—”it’s like they wrote an op-ed basically,” he told the Free Beacon.

Read rest at Free Beacon

 

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Energy News Beat

Judicial activism has accelerated at least $20B in wasteful climate grants, entrenching taxpayer-funded political favoritism and eroding public trust.

​

This article is an essential follow-up to my previous piece, Follow the Money: How Climate Bureaucrats Are Robbing Taxpayers Blind, where I detailed how billions in taxpayer dollars were funneled to politically aligned nonprofits under the guise of climate activism. [emphasis, links added]

If you haven’t read it, I strongly recommend you do, it sets the stage for understanding this latest shocking judicial intervention.

In a stark example of judicial activism, U.S. District Judge Tanya Chutkan recently blocked the Environmental Protection Agency’s (EPA) legitimate effort to reclaim $20 billion in hastily awarded climate grants.

These grants were allocated in the final days of the Biden administration to newly created organizations with virtually no track record in effective environmental management or climate expertise.

Judge Chutkan’s ruling is troubling, to say the least… it positions the judiciary as a political gatekeeper, safeguarding billions in taxpayer dollars earmarked for organizations that appear better connected politically than scientifically credible.

Judicial Activism Shielding Questionable Funding

Judge Chutkan, appointed by President Obama, has consistently sided with progressive policy positions.

Her ruling against the EPA illustrates an alarming precedent: judges actively protecting financial windfalls for politically connected climate groups.

The result? Twenty billion taxpayer dollars continue flowing unchecked into organizations that often lack even basic transparency, oversight, or genuine climate action records.

For instance, the Climate United Fund received nearly $7 billion, despite being only months old at the time funds were awarded. These organizations barely existed before becoming billion-dollar grant recipients.

Yet the judge found no issue with billions flowing into untested hands; her concern was instead that reclaiming the funds might somehow violate procedural fairness.

The Core of the Problem: EPA’s 2009 Endangerment Finding

At the heart of this legal battle is the deeply problematic 2009 Endangerment Finding, which labeled carbon dioxide (CO2), an essential molecule for plant life, as a dangerous pollutant.

This decision provided a shaky foundation upon which billions in misguided spending have been justified.

As many reputable scientists and policy analysts have argued, this finding relies on deeply flawed climate modeling and exaggerated claims about CO2’s environmental impacts.

The Trump-era EPA initiated a critical review of this finding, recognizing that reversing it would dismantle the flimsy legal justification for vast, scientifically unsupported spending.

Overturning the Endangerment Finding would not only restore scientific integrity but also empower agencies to reclaim taxpayer money from these questionable climate grants.

Real Pollution Ignored, Imaginary Threats Funded

Ironically, the same regulatory apparatus that justifies billions spent on politically motivated CO2 reductions simultaneously dismisses the genuine threats of real pollutants.

As I previously detailed in my article “The Myth of Ever-Escalating Climate Costs in the USA”, claims about the catastrophic costs of climate change have consistently proven exaggerated, while genuine pollution issues receive far less coherent policy attention.

Judicial activism like Chutkan’s transforms courts into platforms for protecting financial schemes cloaked in environmental language…

Judge Chutkan’s recent ruling reinforces this flawed approach, prioritizing CO2, a beneficial gas, over genuine environmental threats.

Her decision protects politically favored organizations, undermines real science, and ignores the actual environmental and economic consequences.

Lawfare: Courts as Political Weapons

This scenario exemplifies “lawfare,” the strategic use of the legal system to achieve political goals that cannot succeed through transparent democratic processes.

Judicial activism like Chutkan’s transforms courts into platforms for protecting financial schemes cloaked in environmental language, rather than places of unbiased justice.

Instead of protecting taxpayers and promoting scientifically grounded policies, judicial intervention perpetuates the misuse of billions in federal funding, further entrenching wasteful practices and undermining public confidence in climate initiatives.

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Irrational Fear is written by climatologist Dr. Matthew Wielicki and is reader-supported. If you value what you have read here, please consider subscribing and supporting the work that goes into it.

Read rest at Irrational Fear

 

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Energy News Beat

Dot plot shifts hawkish: 8 of 19 want see either no cut or just 1 cut in 2025.

By Wolf Richter for WOLF STREET.

The FOMC voted today to keep the Fed’s five policy rates unchanged, for the second meeting in a row, after cutting by 100 basis points in 2024. All participants agreed with the rate decision. But Christopher Waller dissented because he preferred to continue the current pace of QT.

• Target range for the federal funds rate at 4.25-4.50%.
• Interest it pays the banks on reserves at 4.40%.
• Interest it pays on overnight Reverse Repos (ON RRPs) at 4.25%
• Interest it charges on overnight Repos at 4.50%.
• Interest it charges banks to borrow at the “Discount Window” at 4.50%.

And participants still see only two cuts in 2025 in the “dot plot,” projecting higher inflation and lower unemployment in 2025.

The FOMC will slow as it has outlined in a series of communications, including in the minutes of the last meeting, and via a speech by Roberto Perli, manager of the System Open Market Account (SOMA) at the New York Fed, which we discussed here, including charts of the issues involved. Today, the FOMC provided specifics:

• It will slow the Treasury securities run-off to $5 billion a month starting April 1, from currently $25 billion a month.
• It will let MBS continue to run off. The MBS runoff, which is not capped, has been around $15 billion a month.

The Fed now sees a risk that the massive liquidity flows around debt-ceiling dynamics, which affect the liabilities on its balance sheet, will mess up the indicators it uses to determine if QT has sufficiently reduced the reserve balances on its balance sheet to be near “ample.” The Fed has already shed $2.2 trillion in assets since it started QT in July 2022.

The issue revolves around the government’s $800-billion checking account at the Fed, the Treasury General Account. During the debt-ceiling phase, the government will not be able to raise new cash and will draw down the TGA to near zero, which pushes close to $800 billion in liquidity into the money markets, and thereby some of it into the reserves that banks put on deposit at the Fed, thereby inflating those reserves. After the debt ceiling is resolved, the government will raise cash by selling hundreds of billions of T-bills to refill the TGA within a very short time, which very quickly sucks this liquidity back out of the money markets, and thereby out of the reserves. These huge and sudden liquidity flows into and then out of its reserve balances essentially blind the indicators the Fed uses to determine the proper level of reserves.

The “dot plot.”

Today’s meeting was one of the four per year when the FOMC releases its “Summary of Economic Projections” (SEP), which includes the “dot plot.” The prior SEP came out at the December meeting.

For the SEP, each of the 19 participants jots down where they see the Fed’s policy rates, unemployment rates, GDP growth, and PCE inflation by the end of the current year and by the end of each of the next several years. The median value of these projections becomes the headline “median projection” for that metric. These projections are neither a decision nor a commitment. Members change their projections as the economic situation changes.

Interest rates: still only 2 cuts in 2025. The midpoint of the target range for the federal funds rate is currently 4.375%.

Today’s median projection for the end of 2025 remained at 3.875%, same as in December, so only 2 cuts of 25 basis points each in 2025, reflecting the Fed’s continued “patience,” as the Fed governors are now calling this wait-and-see period.

Projections by the 19 FOMC members for the midpoints of the federal funds rate by the end of 2025 (bold = median):

4 see 4.375%: No cuts
4 see 4.125%: 1 cut of 25 basis points
9 see 3.875%: 2 cuts of 25 basis points
2 see 3.625%: 3 cuts of 25 basis points.

GDP growth: The median projection for real GDP growth for 2025 declined to 1.7%, from 2.1% at the December SEP. And 2026 growth was reduced to 1.8% (2% is the 15-year average real GDP growth of the US).

Unemployment rate: The median projection for the unemployment rate at the end of 2025 rose to 4.4% (from 4.3% at the December SEP).

Inflation rate, median projections continue to rise:

• For “core PCE” inflation by the end of 2025 jumped to 2.8% (from 2.5% at the December SEP). The actual core PCE price index for January was 2.6%.
• Headline PCE inflation by the end of 2025 rose to 2.7%, from 2.5% in the December SEP, and higher than it is now (2.5% in January).
• Still no 0% in sight until 2027.

The “longer-run” federal funds rate:  The median projection for the “longer-run” federal funds rate beyond 2027 remained at 3.0%, same as in December, and up from 2.9% in September, 2.8% in June, and 2.6% in March last year.

At the same time, it sees PCE inflation at 2.0% beyond 2027. In other words, over the longer term, it sees the midpoint of the federal funds rates to be 1 percentage point higher than PCE inflation.

What changed in the FOMC’s statement:

New: “Uncertainty around the economic outlook has increased. The Committee is attentive to the risks to both sides of its dual mandate.”

Old: “The Committee judges that the risks to achieving its employment and inflation goals are roughly in balance. The economic outlook is uncertain, and the Committee is attentive to the risks to both sides of its dual mandate.”

Meaning: XXXXX.

Added language about QT: “Beginning in April, the Committee will slow the pace of decline of its securities holdings by reducing the monthly redemption cap on Treasury securities from $25 billion to $5 billion. The Committee will maintain the monthly redemption cap on agency debt and agency mortgage-backed securities at $35 billion.”

The whole statement:

Recent indicators suggest that economic activity has continued to expand at a solid pace. The unemployment rate has stabilized at a low level in recent months, and labor market conditions remain solid. Inflation remains somewhat elevated.

The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. Uncertainty around the economic outlook has increased. The Committee is attentive to the risks to both sides of its dual mandate.

In support of its goals, the Committee decided to maintain the target range for the federal funds rate at 4-1/4 to 4-1/2 percent. In considering the extent and timing of additional adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks. The Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage‑backed securities. Beginning in April, the Committee will slow the pace of decline of its securities holdings by reducing the monthly redemption cap on Treasury securities from $25 billion to $5 billion. The Committee will maintain the monthly redemption cap on agency debt and agency mortgage-backed securities at $35 billion. The Committee is strongly committed to supporting maximum employment and returning inflation to its 2 percent objective.

In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook. The Committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee’s goals. The Committee’s assessments will take into account a wide range of information, including readings on labor market conditions, inflation pressures and inflation expectations, and financial and international developments.

Voting for the monetary policy action were Jerome H. Powell, Chair; John C. Williams, Vice Chair; Michael S. Barr; Michelle W. Bowman; Susan M. Collins; Lisa D. Cook; Austan D. Goolsbee; Philip N. Jefferson; Adriana D. Kugler; Alberto G. Musalem; and Jeffrey R. Schmid. Voting against this action was Christopher J. Waller, who supported no change for the federal funds target range but preferred to continue the current pace of decline in securities holdings.

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The post Fed Sticks to Wait-and-See, Sees Only 2 Cuts in 2025, “Dot Plot” Shifts Hawkish amid Rising Inflation & “Uncertainties.” Slows Treasury QT, Maintains MBS QT appeared first on Energy News Beat.

 

Energy News Beat

DOE announced the conditional long-term authorization for LNG exports to non-free trade agreement nations on Wednesday.

In December 2021, Venture Global CP2 LNG filed an application seeking authorization to export LNG in a volume equivalent to 1,446 billion cubic feet (Bcf) per year (Bcf/yr), or about 28 million metric tons per annum (mtpa) of LNG.

In April 2022, DOE granted the FTA portion of the application for a term through December 31, 2050.

CP2 LNG requested the non-FTA authorization for a term commencing on the earlier of the date of the first export from the project or seven years from the issuance of the requested authorization and extending through December 31, 2050.

The non-FTA approval marks the fifth LNG-related approval from DOE since President Trump took office.

In January, Trump lifted a moratorium by the former Biden administration on non-FTA LNG export permits.

Trump issued the executive order, which was widely expected, just hours after officially taking over his second four-year term as the president.

Prior to this non-FTA approval, the US Federal Energy Regulatory Commission (FERC) released a draft supplemental environmental impact statement for Venture Global’s CP2 LNG project in February.

The regulator said there would be no significant cumulative air quality impacts from the project.

The CP2 LNG plant will be located next to Venture Global’s existing 10 mtpa Calcasieu Pass liquefaction plant in Louisiana, which is still in the commissioning phase and expected to start commercial operations on April 15.

Venture Global recently launched the final investment decision (FID) process for its CP2 LNG project.

The company said in its earnings report it progressed the 28 mtpa CP2 development, with $4 billion spent on construction, engineering, and design through December 31, 2024.

“The company has executed purchase orders for an additional 36 LNG trains for CP2, of which 12 are currently being fabricated,” according to Venture Global.

Venture Global previously said it estimates that the total project costs for the CP2 project, including both phases, will range from about $27 billion to $28 billion.

Source: Lngprime.com

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The post Venture Global’s CP2 LNG project gets non-FTA approval from DOE appeared first on Energy News Beat.