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Biden Is on the Warpath Against New LNG Facilities – A global geopolitical disaster in the making

Energy News Beat

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1: The Department of Energy, which is responsible for issuing the export permits, is reassessing whether it is properly accounting for the climate impacts from proposed projects, as well as the national security and the domestic economic consequences.
2: U.S. LNG export capacity is expected to increase from around 84 million metric tons per year in 2023 to over 181 million metric tons per year in 2030, accounting for nearly 30 percent of global LNG production in that year.
3: The Natural Gas Act requires the Energy Department to consider whether a project is in the public interest before granting approval for an application to export natural gas to a country that does not have a free trade agreement with the United States.

The Department of Energy is examining whether regulators should take climate change into account when deciding whether a proposed gas export project meets the U.S. national interest. The Energy Department is weighing whether to issue a permit for a gas export plant in Louisiana known as Calcasieu Pass 2 (CP2), one of 17 proposed LNG export terminals. The plant would ship up to 24 million metric tons of gas abroad each year from a 546-acre site in Louisiana’s Cameron Parish. The export terminal is also awaiting a determination from the Federal Energy Regulatory Commission (FERC), whose permission is needed to build interstate pipelines and LNG facilities after it assesses their environmental impact and determines whether the project is needed by the market. The CP2 project has had several delays as FERC has requested more data for its environmental review, after anti-fossil energy groups began a campaign to stop them.

The Department of Energy, which is responsible for issuing the export permits, is reassessing whether it is properly accounting for the climate impacts from proposed projects, as well as the national security and the domestic economic consequences. This could include updating how the administration determines climate impacts of the projects, modernizing and updating the climate impact considerations, and considering the full upstream and downstream life cycle impacts of the projects. The Energy Department has never rejected a proposed natural gas project on these grounds. Since 2012, the Energy Department commissioned three studies on the impact of gas exports focusing on the economics of the trade. Those previous reviews had consistently found gas exports benefited the public.

The decades-old Natural Gas Act requires the Energy Department to consider whether a project is in the public interest before granting approval for an application to export natural gas to a country that does not have a free trade agreement with the United States. That export permit is needed for exporters to raise the funds to build the pipelines and compressors that bring the natural gas to the coast and chill it to minus-259 degrees Fahrenheit to turn it into liquid for transport on ships.

Gas exports increased almost four-fold during the past decade as U.S. gas production surged, turning the United States into the world’s largest natural gas exporter and helping Europe replace Russian gas shipments after Russia’s invasion of Ukraine. There are currently eight LNG export plants operating in the United States with another seven approved but still under construction.

Biden, however, faces growing pressure from environmental groups to achieve his pledge of transitioning away from fossil fuels. Without LNG exports, it may be unlikely that Biden can keep European nations united in support of Ukraine after deliveries of Russian gas to the region dropped in 2022 and someone blew up the Nord Stream 2 pipeline. Also, slowing down the approval of new projects could scare away potential customers in allied countries such as Japan and South Korea. U.S. LNG has helped foreign countries reduce the amount of coal they burn to produce electricity, resulting in lower carbon dioxide emissions. It is not a resource scarcity issue for the United States as it has enough natural gas resources in Pennsylvania, Texas and other states to support both foreign and domestic markets.

The $10 billion CP2 would be far larger than other existing U.S. LNG export terminals. It would be sited on a shipping channel that connects Lake Charles to the Gulf of Mexico and its export volume would increase U.S. gas exports by about 20 percent. The  project is part of a $21 billion investment into providing domestic natural gas to international markets, and will provide economic benefits to the region as well as good-paying construction jobs. Venture Global, the company behind CP2, had hoped to start building by 2026, and is requesting a permit to operate until 2050.  President Biden has an unrealistic goal for the United States to have zeroed out its carbon emissions by then.

U.S. LNG export capacity is expected to increase from around 84 million metric tons per year in 2023 to over 181 million metric tons per year in 2030, accounting for nearly 30 percent of global LNG production in that year. The United States has increased LNG supplies to Europe by about 30 billion cubic meters per year, about 60 percent to 70 percent of its 2030 goal.

Conclusion

The Biden administration is kowtowing to environmentalists by having his Department of Energy undertake a review of LNG export terminals and the climate considerations for their approval. The review would create uncertainty about whether U.S. allies can rely on U.S. LNG for their energy and could shock the global energy market that relies on U.S. energy dominance and supply. A delay of a decision on CP2 until after the November 5, 2024, U.S. presidential election could spare President Biden from criticism from environmentalists, but it could cause havoc to markets and the energy security of our allies who may question the reliability of the United States as a secure energy supplier.

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Fuel tanker costs surge on Red Sea crisis – Bloomberg

Energy News Beat

 

Houthi attacks in the waterway have prompted many companies to redirect vessels to longer and more expensive routes

The cost of shipping fuel by sea has in some cases soared above $100,000 a day due to continued disruptions in the Suez Canal and Red Sea caused by attacks by the Houthi rebels, Bloomberg reported this week.

According to data from the Baltic Exchange in London, the price of shipping oil and refined products from the Middle East to Japan surged by 3% on Thursday alone, to $101,000 a day, the highest cost for that particular route since 2020.

The same trend has been observed for vessels carrying fuel from the Middle East to Europe. Tanker costs on this route have surged to within the range of $97,000-$117,000 per day, depending on the size of the ship.

The Houthis, an Islamist group that controls a large part of Yemen, have been attacking and hijacking ships crossing the vital waterway that handles about 15% of global trade in what they claim is a show of solidarity with the Palestinians. Despite the US and allies having deployed a naval taskforce to the area to safeguard shipping, many freight companies have halted travel through the waterway and instead make the far longer and more expensive journey around the Cape of Good Hope in Africa.

According to an earlier report by the Wall Street Journal, citing data from London-based Drewry Shipping Consultants, the average worldwide cost of shipping a 40-foot container jumped 23% to $3,777 in the week ending January 18, more than double what it cost only a month prior.

Source: RT

 

Many analysts now warn that the shipping crisis in the Red Sea may cause a new surge in global inflation.

 

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Red Sea crisis could re-ignite inflation

Energy News Beat

Prolonged Houthi attacks on ships risk devastating effects on the global economy, according to OilPrice

Higher freight costs and delays in cargo deliveries amid the Red Sea crisis could drive up global inflation, according to an OilPrice report this week, citing analysts. 

The disruptions to global trade caused by continued Houthi attacks on vessels in the Red Sea have sent shockwaves through global supply chains. Analysts say the repercussions for traffic on the key trade route could continue for months, and ultimately result in a shortage of container ships, which are now using longer routes around the Cape of Good Hope in southern Africa.

“This will strain supply chains and could lead to higher end-product prices, which would fuel inflation just as central banks started to signal rate cuts are in the cards,” OilPrice wrote. Inflation and high interest rates remain a big concern as major economies, which defied predictions of a recession in 2023, could be hit with a downturn this year, experts say.

Central banks could maintain high interest rates for a longer period than currently expected amid the cost-of-living crisis faced by millions of households, according to OilPrice. Europe could be particularly vulnerable to inflation, considering that the Suez Canal is its key maritime trade route from Asia, it noted.


READ MORE:
Ocean freight rates skyrocketing – WSJ

The Yemen-based Houthi rebels have carried out dozens of drone and missile attacks in the Red Sea since the beginning of the Israel-Hamas conflict in October. The militant group has vowed to continue until the hostilities end and the Israeli blockade of Gaza is lifted.

Maritime traffic through the vital sea route, which normally accounts for 15% of global commercial shipping, is down 37% so far in 2024 from a year ago, according to figures from the IMF.

For more stories on economy & finance visit RT’s business section

 

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Russian gas output forecast to surge – IEA

Energy News Beat

 

Global production of the fuel is also expected rise whereas supply will likely remain tight, according to the energy watchdog

Gas production in Russia is expected to rise by 4% this year, according to the International Energy Agency’s (IEA) Gas Market Report published on Friday.

The Paris-based energy watchdog pegged Russian gas output in 2023 reaching 640 billion cubic meters (bcm), down 5% from 2022. For this year, however, the agency expects production to reach at least 664 bcm. It also expects the country’s domestic gas consumption to rise, by 2% to 503 bcm.

The IEA’s figures for 2023 correspond with Russia’s own calculations. Earlier this month, Russian Deputy Prime Minister Aleksandr Novak announced that gas production was down by 5.5% last year, to 636.7 bcm, while the country’s pipeline gas exports came in at 91.4 bcm.

The IEA expects Russia’s gas exports to remain close to their 2023 levels in 2024.

Meanwhile, according to the report, global gas production is likely to grow by roughly 3% this year, while supply will remain tight. Gas demand, which slumped by 1.5% in 2022, is expected to rise by 2.5%, or roughly 100 bcm, but stay below the pre-energy crisis levels of 2021.

“The global gas market is entering a new period as the world gradually emerges from an energy crisis that had profound impacts on both the supply and demand sides,” Keisuke Sadamori, director of energy markets and security at the IEA, said in the report.

“We expect to see solid growth in global gas demand this year as prices have come down to relatively manageable levels. But the speed at which this new demand can be met will be critical, particularly as supplies are tight and substantial new LNG capacity will only come online after 2024.”


READ MORE:
Russia reveals progress on new gas pipeline to China

Analysts warn that gas prices are shaping up to have a volatile year, with the conflicts in the Middle East and Ukraine creating “an unusually wide range of uncertainty.” Shipping disruptions in the Red Sea and potential delays at new liquefied natural gas plants also “represent downward risks to the current outlook, which could fuel price volatility through 2024.”

For more stories on economy & finance visit RT’s business section

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Houthis attack tanker carrying Russian oil product – reports

Energy News Beat

The vessel shipping for trading giant Trafigura is reportedly transporting Russian-origin naphtha for making plastics, gasoline

A petroleum-products tanker operated on behalf of Trafigura was struck by a Houthi missile in the Gulf of Aden after transiting the Red Sea, several outlets reported on Friday, citing the commodities-trading giant. According to Marine Traffic, the Marshall Islands-flagged Marlin Luanda was traveling from Greece to Singapore. The vessel caught fire after the attack.

“Firefighting equipment on board is being deployed to suppress and control the fire caused in one cargo tank on the starboard side. We remain in contact with the vessel and are monitoring the situation carefully. Military ships in the region are [on their] way to provide assistance,” Trafigura stated on its website.

A company spokesperson told Bloomberg that the vessel is carrying Russian-origin naphtha – a light-end oil product primarily used to make plastics and petrochemicals. The tanker collected the cargo via a so-called ship-to-ship transfer near Lakonikos Bay in southern Greece, according to data from analytics firm Kpler.

Houthi rebels have claimed they carried out the strike on the ship. The Islamist group, which controls a large part of Yemen, has been attacking vessels crossing the vital waterway between the Red Sea and the Suez Canal since the escalation of the Israel-Palestine conflict, in what it claims is a show of solidarity with the Palestinians. Amid the attacks, many shipping companies have suspended travel in the region.

Last month, a US-led coalition deployed a naval taskforce to the area to safeguard shipping, and began striking Houthi targets in Yemen. In addition, the US and UK imposed sanctions against the group. The Houthis, in turn, started attacking ships linked with these countries.

In an interview with Russian news outlet Izvestia earlier this month, Houthi spokesman Mohammed al-Bukhaiti pledged that the group would not attack vessels linked with Russia.

“As for all other countries, including Russia and China, their shipping in the region is not threatened. Moreover, we are ready to ensure the safety of the passage of their ships in the Red Sea, because free navigation in the area is important for our country,” he emphasized.

Moscow has not yet commented on the latest strike. It has repeatedly called on the Houthis to stop attacks on ships traversing the waterway but has also condemned the US and UK attacks on targets in Yemen, saying these would only escalate hostilities in the region.

For more stories on economy & finance visit RT’s business section

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TPPF’s Mark P. Mills Denounces Biden Administration’s Halt on LNG Exports

Energy News Beat

AUSTIN — Today, in a partisan move aimed at shoring up President Joe Biden’s support from climate activists, the Biden administration announced a halt to the permitting of Liquefied Natural Gas (LNG) export terminals. Mark P. Mills, Distinguished Senior Fellow for energy policy with the Texas Public Policy Foundation, released the following statement on the Biden administration’s temporary ban:

“This is overtly, politically opportunistic and sets a dangerous precedent with a long tail,” said Mills. “First, it’s a blow to our allies in Europe. American natural gas was a key to replacing Russian natural gas. An export ban, even if temporary, shows Europe that America is not a serious or reliable partner. More fundamentally, the Department of Energy shouldn’t even have the authority to issue such capricious edicts. American farmers don’t need permission to export wheat. In fact, our government helps farmers export. This action has even broader implications. Private investors in all large infrastructure projects will be worried, even in currently favored industries like semiconductors, that they could end up on the wrong side of political favoritism. Do we want to become increasingly a Chinese-like permission-based economy?”

 ENB PUB Note: The Biden administration is intently ruining the United States. This is just another

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On the Surface, PCE Inflation Is Encouraging, But Beneath it, Core Services Accelerated, Housing Stuck at 5.7% for Six Months

Energy News Beat

And a look back at the head-fakes core services inflation dished up last time with this type of inflation.

By Wolf Richter for WOLF STREET.

So right up front – and the Fed has been talking about this, though no one listens: The “core services” PCE price index has gotten stuck at 3.5% over the past six months annualized, and accelerated to 4.0% month-to-month annualized in December, with housing inflation stuck at about 6.7% over the past six months annualized, and with other core services components still red-hot.

The core services PCE price index rose by 0.33% in December from November, the second acceleration in a row, according to data from the Bureau of Economic Analysis today. This amounts to an increase of 4.0% annualized (blue).

The six-month moving average, which irons out the huge ups and downs of the month-to-month data, accelerated to 3.5%, and has been in this range since August, after the sharp deceleration in early 2023 (red).

Core services is where consumers spend the majority of their money, and they matter. Which is why Fed governors have said in near unison that they’re in no hurry to cut rates, but have taken a wait-and-see approach, with an eye on core services. And if it goes away, fine.

But on the surface, the PCE price index looks encouraging, and this has been the trend for months, with the overall PCE price index at +2.6% year-over-year in December, the lowest since March 2021; and with the core PCE price index at +2.9% year-over-year, also the lowest since March 2021, and aiming for the Fed’s 2% target.

The factors for the year-over-year cooling in these inflation measures have been the same for months: plunging energy prices, sharply dropping prices of durable goods after the huge spike in 2020 and 2021, cooling food inflation (with prices still rising from very high levels, but slowly), and favorable “base effects” when compared to a year ago.

But energy prices don’t plunge forever, so that will go away; durable goods prices don’t drop sharply forever either, though they can drop for a while longer to unwind some more of the price spike they’d been through in 2020 and 2021; and the base effects are going to get timed out this year, when the base of the year-over-year comparisons become the lower inflation figures of 2023.

A similar scenario has emerged in the CPI inflation index for December, which we discussed in detail with lots of charts here.

Housing inflation, still red hot and not cooling anymore. The PCE price index for housing rose by 0.46% in December from November and has been in this range since March, after the sharp slowdown early in 2023. This amounts to 5.7% annualized (blue in the chart below).

The housing index is broad-based and includes factors for rent in tenant-occupied dwellings; imputed rent for owner-occupied housing, group housing, and rental value of farm dwellings. It’s the largest component of core services.

The six-month moving average annualized, which shows the more recent trends, also rose by 5.7% in December, and has been in the same range since August (red).

So it looks like the PCE price index for housing has gotten stuck at 5.7%.  This stubborn inflation in housing is a blow to theories trotted out for 18 months that housing was lagging, and that we know it will go away as an issue, etc., etc. The increases are less hot than they had been, but remain hot and have become persistent.

The major categories of core services in the PCE price index, as a six-month average of month-to-month changes, annualized:

Core services, major categories, 6-month average, annualized
Housing
5.7%
Description and chart above
Non-energy utilities
2.5%
Water, sewer, trash
Health care
2.5%
Physicians, outpatient, hospital, nursing care, dental, etc.
Transportation services
6.1%
Auto repair & maintenance, auto leasing & rentals, public transportation, airfares, etc.
Recreation services
5.6%
Concerts, sports, movies, gambling, streaming, vet services, package tours, etc.
Food services, accommodation
2.8%
Meals & drinks at restaurants, bars, schools, cafeterias, etc.; accommodation at hotels, motels, schools, etc.
Financial services
3.5%
Fees & commissions at banks, brokers, funds, portfolio management, etc.
Insurance
2.8%
Insurance of all kinds, including health insurance
Other services
0.1%
Collection of other services

Inflation in Transportation services and Recreation services is accelerating on the basis of the 6-month moving average, with the PCE price index for Transportation services rising by 6.1%, and the index for Recreation services rising by 5.6%:

The head-fakes last time.

Inflation in services turns out to be tough to beat, and it can dish up big head-fakes. Last time we had this type of surge of inflation, so that was in the 1970s and 1980s, we thought repeatedly that we had inflation licked, only to find out that we’d fallen for an inflation head-fake. There were three head-fakes in core services on the way to the peak of 11% in 1981:

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Mining People: Forum Energy, Moneta/Nighthawk, Galway, Newmont, Snowline, World Copper

Energy News Beat

 

​

Management changes announced this week:

Bravo Mining named Heather Laxton as corporate secretary.

Forum Energy Metals named Allison Rippin Armstrong VP Nunavut affairs.

Galway Metals promoted Jesse Fisher to project manager, Clarence Stream, and hired Robert Richard as head of exploration.

As Moneta Gold and Nighthawk Gold merge their companies, Keyvan Salehi will become president, CEO and a director.

Newmont named Peter Wexler its chief legal officer.

Patriot Battery Metals said Ken Brinsden will transition to Quebec-based CEO and president.

Brian Hegarty is the new VP of sustainability and external relations at Snowline Gold.

Gordon Neal joined World Copper as president and CEO.

Board changes:

Bataa Tumur-Ochir and Jeremy South are stepping down from the board of Aranjin Resources.

As Moneta Gold and Nighthawk Gold merge their companies, the board chair will be Josef Vejvoda, and the other seats will be filled by Morris Prychidny, Blair Zaritsky, Edie Hofmeister, Rodney A. Cooper, and Krista Muhr.

Osisko Gold Royalties added David Smith to its board.

Benoit Desormeaux, Martin Milette, and Richard Roy joined the board of Quebec Rare Earth Elements.

Silver Mountain Resources added W. John DeCooman, Jr. to the board and Gerardo Fernandez as an advisor to the board.

Pierre Beaudoin COO of SilverCrest Metals is retiring on Jan. 31.

 

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White House Implements Nakedly Political Delay in LNG Export Approvals – David Blackmon

Energy News Beat

ENB Pub Note: I highly recomend subscribing to David Blackmon’s Substack HERE: https://blackmon.substack.com/p/white-house-implements-nakedly-political?r=2ey9k&utm_campaign=post&utm_medium=web 

David’s industry opinions and knowledge are right on target. Prepare for more sweeping negative impacting energy policies from the Biden administration.

If you’ve been wondering how much lower the Biden White House would go to appease their radical climate alarmist funder base leading up to November’s election, the President and his handlers provided a preview of coming attractions on Thursday.

The New York Times and others reported Wednesday that the White House was planning to announce it would pause permitting approvals for Venture Global LNG’s Calcasieu Pass 2 (CP2) project planned in Louisiana. Biden’s handlers said they are directing the Department of Energy to expand a review of LNG export projects to include more climate change criteria, despite the fact that the required environmental impact studies have already been conducted related to the project.

Thursday evening, the White House issued a statement formalizing that plan:

The full announcement found at this link naturally attributes the need for this move to the mythical “climate emergency.” Because of course it does.

Here’s a key excerpt:

Today, the Biden-Harris Administration is announcing a temporary pause on pending decisions on exports of Liquefied Natural Gas (LNG) to non-FTA countries until the Department of Energy can update the underlying analyses for authorizations. 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. We also must adequately guard against risks to the health of our communities, especially frontline communities in the United States who disproportionately shoulder the burden of pollution from new export facilities. The pause, which is subject to exception for unanticipated and immediate national security emergencies, will provide the time to integrate these critical considerations.

Most of that is utter BS, but exactly what we all should have come to expect from this increasingly desperate and dishonest White House.

The truth, of course, is that this a nakedly transparent partisan political move designed to appease the Democrat party’s huge funders in the climate alarm and coordinating lawfare movements in advance of the 2024 elections. The need to mention and demonize MAGA in the shorter press release for a formal administration policy decision likely violates the Hatch Act and proves the partisan nature of the move.

In a story published Thursday at EnergyNow.ca, a Venture Global had this to say: “Such an action would shock the global energy market, having the impact of an economic sanction, and send a devastating signal to our allies that they can no longer rely on the United States,” said Shaylyn Hynes, a company spokeswoman.

This is very likely true, especially in Europe, which continues to have a pressing need for increasing volumes of US LNG to feed a struggling economy, especially in Germany. Biden’s action does indeed amount to an economic sanction on customer nations for US LNG, but again, that is an action that should surprise no one coming from this president’s handlers, who have chosen to use US currency and economic might as weapons of war in myriad instances since Putin’s invasion of Ukraine.

The positive news is that the US LNG industry has a variety of new LNG projects already under construction that will add as much as 12 bcf/day of export capacity by the end of 2027. Those projects are unlikely to be hampered by this specific action, though there can be no guarantees the administration will not make a move on those as well. Witness Biden’s act on January 21, 2021 to cancel the Keystone XL pipeline, an action take despite the fact that the pipeline’s developer, TC Energy, had already invested $8 billion in that project and that Biden could not cite a single example of the project standing in violation of US law or regulation.

But even if those projects already underway remain unmolested by this latest authoritarian action by the Biden White House, the big concern is that this pause in approval action today will create a pause in additional needed new expansion post-2027. No one can know for sure what the world’s geopolitical situation will look like that far in advance, but such a pause at that time could result in untold hardships on nations that are supposedly American allies.

Bottom line, this decision by Biden and his handlers, motivated entirely by hyper-partisan politics as it is, provides just one more example that helps to explain why the world has become increasingly unstable and dangerous since the day Biden took office.

Source: Blackmon.substack.com

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Yemen’s Houthis say they targeted oil tanker Marlin Luanda in Gulf of Aden

Energy News Beat

CAIRO, Jan 26 (Reuters) – Yemen’s Houthis said on Friday their naval forces carried out an operation targeting “the British oil tanker Marlin Luanda” in the Gulf of Aden causing a fire to break out.
They used “a number of appropriate naval missiles, the strike was direct,” the Houthi military spokesperson Yahya Sarea said in a statement.

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