Energy News Beat

On January 26, the Biden administration announced it would pause new approvals of liquefied natural gas (LNG) exports. The official news followed several leaked stories—including one prominent article by The New York Times—that triggered criticism from LNG supporters and praise from climate activists.

The announcement appears to be a concession to the “keep it in the ground” movement and the 65 federal lawmakers who asked for the policy change in November 2023. However, some pragmatic progressives see the pause as misguided: “The urgency of the energy transition cannot excuse counterproductive purity tests,” wrote Elan Sykes and Neel Brown of the Progressive Policy Institute.

From the libertarian perspective, the pause is unwise energy policy, an encroachment on free trade, and a continuation of the Biden administration’s use of uncertainty as a political weapon against energy suppliers. Let’s dig in.

What Is Changing, Exactly?

LNG is the liquefied version of natural gas (mostly methane, CH4). Shippers cool the gas to approximately negative 260 degrees Fahrenheit to make it a liquid that is portable via tanker ships. International trade in LNG has spiked in part because of the abundant natural gas resources in the United States, which were enabled by technological improvements in unconventional production from shale formations.

The United States did not export significant quantities of LNG until about 2015, so one might say the industry is in uncharted waters. The aggressive growth in LNG exports (particularly relative to historic levels of imports) can be seen in the graph below.

 

(Source.)

Although the large quantities of exports are new, the legal apparatus is not. Specifically, under the Natural Gas Act (NGA), the Department of Energy (DOE) must approve any import or export of natural gas. Congress passed the NGA in 1938, so the statute predates the organization of the DOE itself, which was formed by Congress in 1977 by the DOE Organization Act.

Before the DOE was established the responsibilities in this section of the NGA were carried out by the Federal Power Commission (renamed in 1977 to the Federal Energy Regulatory Commission or FERC). Now the two agencies each regulate different parts of the LNG industry. DOE explains their roles as follows:

The NGA directs DOE to evaluate applications to export LNG to non‐​FTA [Free Trade Agreement] countries. … Typically, the Federal Energy Regulatory Commission (FERC) has jurisdiction over the siting, construction, and operation of LNG export facilities in the US In these cases, FERC leads the environmental impact assessments of proposed projects consistent with the National Environmental Policy Act, and DOE is typically a cooperating agency as part of these reviews. Obtaining a DOE authorization to export LNG to non‐​FTA countries is an important step for most projects in their path toward financing and construction.

The Biden administration said the DOE will now scrutinize applications to export LNG through the lens of climate change and other factors in determining whether additional US LNG exports are in the public interest. The White House stated:

The current economic and environmental analyses DOE uses to underpin its LNG export authorizations are roughly five years old and no longer adequately account for considerations like potential energy cost increases for American consumers and manufacturers beyond current authorizations or the latest assessment of the impact of greenhouse gas emissions. Today, we have an evolving understanding of the market need for LNG, the long‐​term supply of LNG, and the perilous impacts of methane on our planet.

The DOE has never denied an LNG export application, so this is a big shift in public policy.

Who Carries the Burden of Proof?

The rise of low‐​cost natural gas production in the United States—combined with high prices and resource constraints in other parts of the world—means US producers can profitably refrigerate, ship, and deliver gas to other countries. In contrast to other energy resources that require mandates and subsidies, LNG exports merely require approval from the federal government. All the government has to do is get out of the way.

The text of the NGA establishes approval as the default position. The statute says the DOE “shall” issue an order approving a project “unless, after opportunity for hearing, it finds that the proposed exportation or importation will not be consistent with the public interest.” Hence a pause to further consider new factors is the wrong posture—LNG approvals should continue until and unless DOE makes a new finding that LNG exports are inconsistent with the public interest. Ideally, of course, the government shouldn’t have the power to bar energy exports in peacetime.

There is a case to be made on either side of the climate debate regarding LNG.

Supporters of LNG exports cite the lower CO2 emissions of natural gas combustion over coal. By exporting natural gas and displacing the use of coal globally, the argument goes, the United States can help other countries reduce their CO2 emissions. We have certainly seen coal‐​to‐​gas switching bring down emissions in the United States.

Opponents of LNG exports, however, argue that the energy required to cool and transport natural gas—not to mention leakage of uncombusted methane, itself a potent greenhouse gas—makes it little better for climate change than burning coal.

The Administration’s Action is Arbitrary and Capricious

As experts debate the net impact of natural gas exports on factors like global climate change, the structure of the NGA indicates that approvals should move forward while the DOE deliberates. In July 2023, the DOE rejected a petition by environmental groups to do precisely what it now accepts—to undertake a blanket review of its LNG policy.

In fact, the DOE’s rejection notes in the first sentence of the document that the Administrative Procedure Act (APA) provides that each agency “shall give an interested person the right to petition for the issuance, amendment, or repeal of a rule.” The DOE’s new policy of a “pause” runs afoul of the APA and deprives interested parties the ability to challenge it before it goes into effect.

The new stated policy of a pause is especially capricious—meaning impulsive or unpredictable—given how the DOE responded to the environmental petitioners just six months ago:

After carefully considering Petitioners’ request, DOE is denying the Rulemaking Petition. As discussed below, DOE has reasonably exercised its discretion to implement its LNG export program through a combined approach of individual adjudications and export‐​focused regulatory actions, rather than a single rulemaking of broad applicability. DOE‘s existing LNG export regulatory program is responsive to Petitioners’ principal concerns—namely because, since 2013, DOE has, in fact, established a decision‐​making process under NGA section 3(a) that “respond[s] to the complex issues raised by LNG export and appropriately serve[s] the Natural Gas Act,” as Petitioners request. (emphasis in original)

How can the DOE now claim that it does not need to go through a formal rulemaking process in reversing course and implementing a new LNG approval regime? Even the environmental groups that want the DOE to shut down LNG exports should agree that their petition for a new rulemaking was the appropriate vehicle for enacting new policy.

Further, in the event of an administrative policy change at DOE that rises to the level of national significance—I think an indefinite LNG export pause qualifies—the Supreme Court’s “Major Questions Doctrine” should come into play. As the Congressional Review Service summarized the doctrine, “if an agency seeks to decide an issue of major national significance, its action must be supported by clear congressional authorization.” (emphasis in original) Did Congress give the DOE clear authorization to deny LNG export applications based on the factors DOE now finds important?

Political Uncertainty as Punishment

We have already seen the playbook of capricious policy in action. In February 2022, FERC issued new policy statements “providing guidance for future consideration of natural gas projects by the Commission.” The policy change—which suggested that an unspecified level of climate mitigation would be necessary to serve the public interest and receive FERC approval of gas pipeline projects—injected enormous uncertainty into the pipeline approval process.

The concept of the February 2022 policy statement was also the subject of a series of rebuttals (prebuttals?) by Commissioner Bernard McNamee, who argued forcefully beginning in 2019 that “the commission does not have the authority under the NGA or [the National Environmental Policy Act] to deny a pipeline certificate application based on the environmental effects of the upstream production or downstream use of natural gas nor does the commission have the authority to unilaterally establish measures to mitigate” emissions.

Ultimately, FERC withdrew its proposal after receiving blistering blowback from members of the Senate Energy and Natural Resources Committee (ENR). Senator Joe Manchin (D‑WV), ENR chairman, said FERC was “constructing additional road blocks that further delay building out the energy infrastructure our country desperately needs.” Delay is the practical impact of political uncertainty.

The Environmental Protection Agency (EPA) appears to be using the same strategy. Last year, the EPA proposed in its power plant rulemaking to mandate two unproven technologies—green hydrogen and carbon capture—for new or reconstructed power plants to meet greenhouse gas emission targets. The EPA proposed that “affected sources that commenced construction or reconstruction after May 23, 2023” would need to meet the requirements of the final rule.

The electricity generation industry remains in the middle of the uncertainty caused by the EPA’s unworkable proposal. For any new or reconstructed natural gas‐​fired power plant (affected source) subject to EPA’s new standard, a company can construct the unit today and be held—at some future date—to a standard that does not yet exist and may be impossible.

Given the recent track records at DOE, FERC, and EPA, crippling uncertainty is beginning to look like the aim of energy policy rather than an unfortunate side effect.

LNG Export Pause Offers a Lesson in Economic Thinking

The White House listed “potential energy cost increases for American consumers and manufacturers” as one justification for the LNG pause. It is true that, in the very short term, an announcement that the federal government will forcibly restrict the export of natural gas would likely cause its domestic price to fall. But, as French economist Frederic Bastiat implored, we should attempt to foresee long‐​term impacts. Bastiat wrote:

There is only one difference between a bad economist and a good one: the bad economist confines himself to the visible effect; the good economist takes into account both the effect that can be seen and those effects that must be foreseen.

Yet this difference is tremendous; for it almost always happens that when the immediate consequence is favorable, the later consequences are disastrous, and vice versa. Whence it follows that the bad economist pursues a small present good that will be followed by a great evil to come, while the good economist pursues a great good to come, at the risk of a small present evil.

Restricting the sale of LNG abroad would send ripple effects up the supply chain, blunting incentives to explore for more natural gas and to produce what’s already been found. Advocates of thwarting the global natural gas trade—and of hoarding domestic natural gas—are focused on temporary, short‐​term impacts to commodity prices and ignoring long‐​term impacts to natural gas supply infrastructure.

Whose Gas Is It Anyway?

Economics aside, what business does the federal government have in dictating the direction of an industry that delivers a product that so many people find valuable? Advances in directional drilling and hydraulic fracturing technology (commonly referred to as “fracking”) allowed American firms to produce astonishing amounts of useful energy from hydrocarbons trapped over a mile deep in rock formations. (Turn useless, 6,000-foot-deep rock into electricity? Yes, please.)

People here and abroad want to use that energy. Natural gas is a valuable resource—we use it not just to fuel power plants but to cook food, heat homes, and fabricate a dizzying array of plastics, fibers, and even medicines. Natural gas liquids like propane and ethane are especially useful as a material feedstock but also have energy‐​related applications.

The DOE, EPA, and FERC may try to stifle the progress of the natural gas industry in the name of climate change (or industry protectionism), but the demand for energy will always be there. Globally, energy consumption continues to increase, as shown below.

 

(Source.)

The challenge to meet growing demand should be exciting because energy consumption reflects the increasing living standards of countless millions (hopefully billions) across the globe. The US Energy Information Administration stated in its 2023 International Energy Outlook: “as incomes and population rise over time, energy consumption increases as more people can afford to drive, use commercial services, demand goods, and control building temperatures.”

For the hundreds of millions of people worldwide who still lack access to electricity, LNG exports could be the difference between dark and light.

Source: Cato.org

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(Bloomberg) — The US House of Representatives will vote on overturning the Biden administration’s freeze on liquefied natural gas export approvals, a top Republican said Wednesday.

The vote will take place the week after next, Representative Cathy McMorris Rodgers, who chairs the House Energy and Commerce Committee, said during an interview.

“We do have legislation to lift the ban on LNG,” Rodgers said. “It addresses barriers to exports right now.”

The White House announced Friday it was halting approval of new licenses to export LNG while it scrutinizes how the shipments affect climate change, the economy and national security — a moratorium likely to disrupt plans for billions of dollars in planned developments.

The announcement drew the ire of industry as well as top Republicans — including House Speaker Mike Johnson, who called the move “as outrageous as it is subversive” while empowering adversaries like Russia.

While a stand-alone measure would likely be dead on arrival in the Democrat-controlled Senate, it’s possible the issue could emerge as a Republican rider on a emergency-aid package for Ukraine, Israel and Taiwan sought by Democrats.

Read More: Biden Freezes Licenses to Export Gas, Imperiling Projects

Among the potential bills being considered is a measure that would strip the Energy Department of a role in granting LNG-export licenses and delegate that authority to the Federal Energy Regulatory Commission, according to a person familiar with the matter.

The legislation, known as the Unlocking Our Domestic LNG Potential Act, was approved by the committee last year, and various versions have been included in broader House-passed legislation. It would require FERC to deem the export or import of gas to be consistent with the public interest.

The measure, which would benefit LNG shippers such as Sempra, has the support of trade groups including the Independent Petroleum Association of America and the National Ocean Industries Association, which earlier this week sent a letter to House and Senate leaders urging them to move the bill. The Senate version of the bill was introduced Wednesday by South Carolina Republican Tim Scott and 16 other Republicans.

“Removing DOE from the process will help to ensure that political maneuvers will not interfere with energy supplies,” they wrote. “It is vital that Congress send an immediate message to our allies, and enemies, abroad that US LNG will continue to flow uninterrupted for many years to come.”

Frontline environmental leaders, meanwhile, gathered on Capitol Hill Thursday to declare victory, prior to a White House meeting with officials that were set to include President Joe’s Biden climate adviser Ali Zaidi, Deputy Energy Secretary David Turk and other administration officials, Roishetta Ozane, the founder of the Vessel Project of Louisiana, said in an interview.

Climate activists and others have stepped up pressure to stem the construction of new multibillion dollar LNG export terminals they say will prolong the world’s reliance on natural gas while discouraging cleaner alternatives.

“We are very happy with their decision, but the fight must continue,” Ozane said during a press conference to celebrate the Biden administration’s move.

Source: Bnnbloomberg.ca

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Morocco has emerged as the major winner from the competition engaged between the United States and China for control of the supply chain of critical minerals, used in clean energy transition and electric vehicle (EV) batteries, says the U.S. Center for Strategic and International Studies.
In August 2022, the U.S. passed the Inflation Reduction Act (IRA) to decarbonize the U.S. economy, re-shore supply chains of critical minerals, and break dependence on China. The legislation contains a series of economic measures designed to incentivize U.S. companies to invest in those supply chains within U.S. borders.
The goal is to secure, develop, and diversify supply chains as Washington and its Western allies see dependence on Chinese supply chains a threat to their national security.
Besides tax credits, the IRA relies on “friend-shoring” where the United States relies on minerals and a supply chain developed in U.S.-friendly countries and those with free trade agreements (FTAs) with the United States.
By leveraging both FTAs sealed between the U.S. and other countries, Chinese companies have found a way to maintain access not only to the U.S. market & Europe but also to avoid the IRA, says the Washington-based think-tank.
In an analysis titled: “Morocco, an Unexpected Winner of China’s Strategy to Circumvent the IRA”, the U.S. center says China chooses Morocco because of its geographical and economic proximity to EU countries and the United States.
Just a few miles away from Europe, Morocco has also the advantage of having free trade agreements with the European Union and the United States, which makes it an ideal hotspot for Chinese and Western/U.S. allies’ companies’ joint ventures in the critical minerals space.
In September 2023, South Korea’s largest chemical company LG Chem and China’s Youshan—a subsidiary of Zhejiang Huayou Cobalt—announced a partnership to build in Morocco a lithium-phosphate-iron (LFP) cathode plant, scheduled to come online by 2026 and produce up to 50,000 metric tons of LFP cathodes.
One key element of China’s overall strategy success is the willingness of U.S. allied countries’ private companies to engage with Chinese companies on different supply chain segments, says the American research center.
Canadian, South Korean and Australian companies are developing joint ventures with Chinese companies in lithium processing projects in Africa. Canada, Australia, and South Korea are all members of the Minerals Security Partnership, a U.S. initiative launched in June 2022 that aims to catalyze public and private investment in responsible critical minerals supply chains globally.
According to CSIS, Morocco comes out as the biggest winner from China’s latest strategic move thanks to its solid industrial landscape, stable political and economic environment, geographical proximity to Europe, FTAs with Europe and the U.S. and finally, its cheap labor cost compared to developed countries such as South Korea and Canada.
Morocco and those other countries thus find themselves as the “collateral beneficiaries” of the Sino-American rivalry in the supply chain of critical minerals, says the U.S. Center for Strategic and International Studies.

Source: Northafricapost.com

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China permitted more coal power plants last year than any time in the last seven years, according to a new report released this week. It’s the equivalent of about two new coal power plants per week. The report by energy data organizations Global Energy Monitor and the Centre for Research on Energy and Clean Air finds the country quadrupled the amount of new coal power approvals in 2022 compared to 2021.

That’s despite the fact that much of the world is getting off coal, says Flora Champenois, coal research analyst at Global Energy Monitor and one of the co-authors of the report.

“Everybody else is moving away from coal and China seems to be stepping on the gas,” she says. “We saw that China has six times as much plants starting construction as the rest of the world combined.”

What’s driving the new permitting of Chinese coal plants?

The report authors found the growth of new coal plant permitting appears to be a response to ongoing drought and last summer’s historic heat wave, which scientists say was made more likely because of climate change. The heat wave increased demand for air conditioning and led to problems with the grid. The heat and drought led rivers to dry up, including some parts of the Yangtze, and meant less hydropower.

“We’re seeing sort of this knee-jerk response of building a lot more coal plants to address that,” says Champenois.

High prices for liquified natural gas due to the war in Ukraine also led at least one province to turn to coal, says Aiqun Yu, co-author of the report and senior researcher at Global Energy Monitor.

New coal plant approvals accelerated last summer as China saw historic heat waves that increased demand for air conditioning. The heat and an ongoing drought meant rivers dried up, including part of the Yangtze. China’s grid struggled as hydropower went offline.

Why is China building new coal plants while also increasing renewables?

China leads the world in constructing new solar and new wind, while also building more coal plants than any other country, the report finds.

There are government and industry arguments that the coal plants will be used as backup support for renewables and during periods of intense electricity demand, like heat waves, says Ryna Cui, the assistant research director at the Center for Global Sustainability at the University of Maryland School of Public Policy. “That’s being used as an excuse for new projects,” Cui says.

Last year’s boom in new coal didn’t come out of nowhere, says Yu, who notes that the domestic coal industry has long pushed the message that coal is a reliable form of energy security.

“When the energy crisis happened, when energy security is a big concern, the country just seeks solutions from coal by default,” Yu says.

Champenois says the surge in permits last year could be China’s coal industry seizing upon a last chance to get financing for new coal plants, which are increasingly uneconomical compared to renewables.

“We see it as a door opening, maybe one for one last time,” she says. “If you’re a power company, you’re gonna try to put your foot in that door.”

How does permitting new coal plants affect China’s goals to reduce emissions?

China is the world’s biggest emitter of fossil fuels and has pledged for its emissions to peak by 2030. But there are questions over how high that peak will get and how soon that peak will come, says Champenois.

The International Energy Agency recently reaffirmed there must be “no new development of unabated coal-fired power plants” to keep temperatures less than 1.5 degrees Celsius and avoid the worst effects of climate change.

It’s too early to know how much the plants will run and how they will impact China’s emissions, says Lauri Myllyvirta, lead analyst at the Centre for Research on Energy and Clean Air and one of the report’s co-authors.

The post China is building six times more new coal plants than other countries, report finds appeared first on Energy News Beat.

 

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Today’s world is going through major transformations. Among the most sensitive issues remains the availability of food and the challenges tied to it. In the past few years, such a seemingly basic problem has become more complicated to achieve for many countries.

Global economic challenges and the accompanying politicization of international cooperation, across virtually all areas, have undermined the effectiveness and transparency of existing market mechanisms. Rather than giving way to a new sustainable model, these mechanisms have been replaced by chaotic processes: in this sense, every country does whatever it can and cooperates with whomever it can.

Food security has emerged at the fore of discussions over the past year, especially when imbalances in food and fertilizer markets have become obvious, coupled with logistics challenges and export restrictions. All of that has primarily affected the world’s most vulnerable countries, mostly located in Africa.

Dependency on food imports

This is not some hackneyed slogan but plain facts. Most African countries are now in the phase of active demographic growth—in fact, nations faced with the more acute domestic challenges show the greatest rates of demographic growth. In 2022, the population of Niger grew by 3.71%, that of the Democratic Republic of the Congo (DRC) – by 3.2%, and that of Angola and Mali – by 3.1%. In percentages, this may look like a modest increase, but it comes to 5.75 million people, and that’s only in the four countries.

As is often noticed, this situation promises economic growth in the future. In the moment, however, this also places a burden on the existing social system. Africa’s population is getting younger, and children require more nutrient-rich foods. Some 63 million African children under the age of five are stunted. Half of these children come from five countries: Nigeria (19%), the DRC (12%), Ethiopia (10%), Tanzania (5%) and Angola (4%).

Predictably, this means that Africa is increasingly dependent on food imports. 36 African countries spend most of their export revenues on food imports, while food imports swallow up over 40% of export revenues in 19 countries. In Ethiopia, for example, the total value of food imported in 2019-2021 amounted to 81% of the value of the country’s exports. This highlights Addis Ababa’s extreme dependence on the global market. Given that Ethiopia is a landlocked country, the problem becomes even more acute. Dependence of island states on food imports is just as high. Mauritius, commonly considered a “success story in Africa,” spends 38% of its export revenue on food imports, which is 52% more than ten years ago.

Comparing the key indicators of the current state of food security with the case ten years ago (2012), it becomes obvious that things have turned a lot worse. Across the African continent, the estimated number of malnourished people has increased 1.7 times to exceed 262 million people. Such negative dynamics is typical even for the countries of Northern Africa, which are home to 11.1 million malnourished people. This is almost one and a half times more than ten years ago. The situation has to do not only with the difficult humanitarian situation in Libya but also with food supply-related challenges in Egypt and Morocco. Although, of course, on a larger scale, Africa’s main problem lies elsewhere.

How many people in Africa do not have enough food?

The situation is the most complicated in Eastern Africa and Western Africa, where almost 35% and 23% of the population are malnourished, respectively. Over the past 10 years, the situation in Uganda has become twice worse, in Kenya – 1.8 times worse, and in Tanzania and Ethiopia – 1.5 times worse. In Ethiopia, there are at least 26.4 million malnourished people. All of that comes down to a total of 70.5 million people – and that’s not counting Sudan, where the armed conflict that began in April 2023 prevents us from fully assessing the situation.

In Western Africa, the situation is most difficult in Nigeria, a country that has the biggest population in the region. The number of Nigerians who fail to eat properly has increased twofold and reached 34 million people. The situation is also growing worse in countries like Niger, Benin, the Gambia and Sierra Leone.

Unfortunately, reliable data sources are not available for all countries, especially given the wave of political changes that swept through the subregion in 2022-23. The DRC (with almost 34 million malnourished people) and Madagascar (with almost 15 million) remain the major concern.

However, these figures are only the tip of the iceberg, since they show the general trend rather than the real scale of the problem. The Food and Agriculture Organization (FAO) suggests the situation has— in the course of the past 10 years —slightly improved only in Namibia, Eswatini, Djibouti, Ghana, Ivory Coast and Senegal – in other words, in six countries out of 54.

The figures become even more frightening if we replace the official term “undernourishment” with the notion of “severe food insecurity” – an assessment category based on the opinion of Africa’s population, according to household survey responses. Such surveys demonstrate that some 890 million people in Africa face severe food insecurity, which is about 60% of the continent’s entire population. Nigeria (260 million people), the DRC (226 million), Ethiopia (145 million), Tanzania (98 million) and Kenya (85 million) face the greatest challenges, and over 50 million people suffer from this problem in six other countries in the region.

Why water access is important

The food issue is closely associated with water access. There is no life without water, and so the most arid areas prone to climate change should have adequate water access. But another important aspect is effective farming, which is also impossible without water.

Water availability has somewhat improved in recent years, and the average 70% of the population in African countries have access to basic water services. This does not mean, however, that such water sources are completely safe for consumption. According to FAO estimates, only 19% of the population of the DRC, 12.6% of the population in Ethiopia, 6.2% of the population in Central African Republic (CAR), and 5.6% of the population in Chad have access to safe water sources. In the Republic of the Congo, that number is 46% – one of the best indicators in the region.

The people who didn’t make it into the “lucky” categories face an increased risk of cholera, dysentery, hepatitis A, typhoid fever, and other serious diseases. According to official data, in 2019, poor water quality caused 10% of all deaths in Chad, 9.5% of deaths in CAR, 8.2% in Niger and South Sudan, and 7% of deaths in Nigeria.

Take the current situation in Zambia. As a result of an ongoing cholera outbreak, 351 people have died, with more than 9,000 have become sick, schools have been closed and church services paused. Last year, the people of Malawi, too, faced the worst cholera epidemic in the country’s entire history, so this is not an isolated case.

Moreover, the data mentioned only characterizes the period from 2019-2022. In other words, it does not account for the political turbulence and market complications which arose in 2022-2023.

Food security: why importing more food does not equal feeding people

Although food security has come to light rather recently—mainly, against the background of other failures of the international system—the foundation of what is known as “food sovereignty” was laid back in 2007. Symbolically, this happened in Africa, at an international forum held in Mali and attended by participants from over 80 countries. The accepted definition of “food sovereignty”, a key outcome of the forum, contains several important elements that can help us find solution to this acute problem.

First, one of the principles of food sovereignty is that all peoples have the right to healthy and culturally appropriate food. When it comes to Africa, we must note certain details. For example, in recent decades, crop consumption in Africa has been influenced by European and Asian consumption habits. Europeans and Asians mainly consume wheat and rice. Although Sub-Saharan Africa accounts for only 11.6% of global wheat imports and 21.8% of rice imports, consumption of these products is steadily increasing. Over the past 10 years, wheat imports to Sub-Saharan Africa have grown 1.7 times, which even exceeds the overall growth rate of imported food.

This is a major aspect of food security because wheat and rice are produced outside of Africa, and so imports depend on external suppliers and market conditions, including political aspects. This is and may be a serious blow to Africa’s food sovereignty.

If a country still manages to import the product that is not grown at home, it does not mean that it will feed its people. Unpredictable import conditions often lead to increases in food prices domestically. According to the IMF, food inflation was about 24% in 2020-2022 and increased to 29% over the past year. Countries in Northern and Western Africa are particularly vulnerable when it comes to food inflation, which directly affects their standard of living. Moreover, problems are caused not only by food inflation but also by the shortage of fertilizers.

Sanctions pressure

In 2022-2023, the global fertilizer market found itself in a sort of limbo. Estimates show that sanctions resulted in countries across the world failing to receive 25 megatons (Mt) of fertilizers, and a third of the losses were due to logistics problems caused by the sanctions. The fertilizers were available, yes; but they were shipped with delays and there were many impediments on the way.

A recent Food Security Report, put together with the help of the Pan-African Parliament, shows the shifts that have occurred in the global fertilizer markets and what they mean for countries most in need of these fertilizers. In particular, the report claims that just one undelivered kilogram of fertilizers translates into the loss of seven kilograms of harvest. And shrinking harvests make these governments even more dependent on foreign markets, since they need to compensate for the losses. Ultimately, it’s Africa’s malnourished population that has to pay for all this.

Second, it was determined at the 2007 Mali Forum that all peoples have the right to define their own food and agriculture systems. Yet so far, due to several reasons, few countries have attained this goal.

On the one hand, food markets are controlled by large corporations, which dictate their rules to import-dependent governments. For example, the wheat trade has been monopolized by a group of four companies known as ABCD (Archer Daniels Midland, Bunge, Cargill, and Louis Dreyfus).

Since these corporations determine the logistics chains and control information about the quantities of available grain, African countries find themselves largely dependent on supplies from the Euro-Atlantic region, where about two-thirds of all shipments come from. This creates certain disparities between the producers and suppliers of grain.

The report also emphasized that the situation has been aggravated by sanctions. It confirmed the views frequently expressed by Russian diplomats: market challenges have primarily affected the world’s most vulnerable players, since the EU and the US could meet their needs at any cost, simply by increasing purchases of both grain and fertilizers. As a result, though, grain and fertilizers hardly reached African markets, notably because of the considerable increase in prices. It is not surprising that the authorities of Ethiopia, Mozambique, the DRC, Nigeria, and other countries complain about serious humanitarian problems caused by food shortages.

Diversifying food import sources and creating a domestic agricultural base

In any case, a food security system that guarantees the nation’s sovereignty cannot be built without diversifying supply sources and obtaining information about them in a timely manner. Since, market mechanisms don’t always work in the current conditions, solutions more often depend on bilateral agreements at the national level.

For this reason, Russia’s recent free shipments of grain to Africa’s most vulnerable countries may be seen not only as acts of friendship, partnership, and humanitarian relief, but also as a signal regarding further supplies a practical example demonstrating that Russia is able to ship grain to Africa even without the grain deal, and even considering the challenges with insurance and freight chartering.

On the other hand, the diversification of food supplies does not reduce Africa’s overall dependence on other countries. What can help is the development of a domestic agricultural base, which is particularly important for those countries where the soil is not suitable for efficient farming.

On average, 15% of all land in Africa is arable (however, in countries such as Botswana, Namibia, Gabon or the Republic of the Congo this number is less than 1.5%). However, only 1% of these lands are irrigated on average. Traditional farming practices still prevail in many African countries, and this impedes productivity and doesn’t guarantee a stable harvest from year to year.

Using modern fertilizers and developing logistics infrastructure

The situation can be changed only by using modern fertilizers. According to the mentioned report, the 32.9 megatons (Mt) of Ukrainian grain ensured by the Grain Deal has fed 95 million people, while the 10.7 mt of Russian fertilizers that were not delivered could have fed 199 million people. The difference is obvious, and it is not surprising that Africa’s demand for fertilizers is increasing.

In 2020, fertilizer supplies to Africa amounted to 7.2mt, but, due to an 85% price growth, supplies dropped to 3.8 mt by 2022, which is comparable to 2018. So while the region’s population has grown and its needs have increased, the availability of fertilizers has rolled back to 2018 indicators. However, for the situation to really change, fertilizer usage must become more consistent: currently, 60% of the overall volume of fertilizers is used only by five countries (Egypt, South Africa, Nigeria, Ethiopia, and Kenya). Logistics usually plays a key role, so food sovereignty is impossible without the necessary infrastructure.

The development of port and railway infrastructure across Africa and its connection with supply channels, as well as the development of processing and packaging facilities, and improved technical literacy are all components of food sovereignty. Russia is ready to share technologies with its partners in Africa, and Russian companies are interested in sharing their experience in precision farming, plant breeding, and digital solutions. Moreover, a growing number of African students are studying agriculture in Russian universities.

Food sovereignty does not imply food autarky. It would not be possible to replace the entire volume of food imports into Africa, given their scale. But the gradual diversification of supplies (which takes into account the concerns of all parties), the construction of the necessary infrastructure, and building internal capacity can help change the situation over time.

In the past year, Russia has demonstrated that it is ready to travel this path together with its African partners and has emerged not only as a reliable supplier but also as a partner willing to share its experience and competencies on an equal footing.

The post Feeding Africa: Sanctions make it worse, imports don’t help, what’s the solution? appeared first on Energy News Beat.

 

Energy News Beat

US LNG exporter Cheniere and compatriot Bechtel have completed more than half of the work on the expansion phase at the Corpus Christi LNG export plant in Texas.

Cheniere’s Corpus Christi liquefaction plant now has three operational trains with each having a capacity of about 5 mtpa.

In June 2022, Cheniere took a final investment decision on the Corpus Christi Stage 3 expansion project worth about $8 billion and Bechtel officially started construction on the project in October the same year.

The project was 48.1 percent complete in November last year.

It includes building seven midscale trains, each with an expected liquefaction capacity of about 1.49 mtpa.

Cheniere’s unit Corpus Christi Liquefaction said in the December construction report filed with the US FERC this week that overall project completion for the Stage 3 project is 51.4 percent.

Stage 3 engineering and procurement are 83.7 percent and 72.2 percent complete, respectively, while subcontract and direct hire construction work are 66.9 percent and 11.1 percent complete, respectively, it said.

Train 1 mixed refrigerant compressor set (Image: Cheniere)

During December, CCL’s contractor Bechtel continued piling activities, road improvements, drainage work, and mobilization of temporary facilities, equipment, and personnel.

Piling and soil stabilization teams are making progress in trains 5, 6, and 7, while concrete work in train 1 is “significantly” complete, the firm said.

Concrete pouring is also underway in train 2 and train 3, and loading of aboveground piping spools is progressing in train 1.

Several large pieces of equipment have been installed including train 1 refrigeration compressors, train 1 liquefaction substation, train 2 cold boxes, the GIS substation, and train 2 utility substation, it said.

In August last year, first cold boxes arrived at the site.

US equipment manufacturer Chart Industries received in 2022 full notice to proceed for the expansion project from Bechtel for its IPMSR process and equipment activities.

OSBL west piperack erection (Image: Cheniere)

Cheniere previously said that LNG deliveries from the expansion project will begin in 2025 with full production in 2027.

However, Cheniere’s CEO Jack Fusco said in August last year that the company is expecting to complete the expansion phase ahead of schedule.

He said in November that construction on Corpus Christi Stage 3 “continues to progress ahead of plan, and I am optimistic first LNG production from train 1 will occur by the end of 2024.”

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The post Cheniere’s Corpus Christi LNG expansion project more than 51 complete appeared first on Energy News Beat.

 

Energy News Beat

The EU’s industrial powerhouse is plagued by falling orders and growing production costs

 

The post Germany destroying its car industry – Putin appeared first on Energy News Beat.