Daily on Energy: Biden hopes to counter Russian threat to European energy

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ENERGY DIPLOMACY MODE: The extremely tight European gas market is pushing the Biden administration into energy diplomacy mode, with EU allies watching an even more dire supply situation due to a possible Russian invasion of Ukraine.

President Joe Biden told reporters yesterday that the United States could help the bloc through this period of geopolitical volatility and high and sometimes record high prices, although he did not disclose how.

“I think there are ways in which we can add some value in terms of gas prices — natural gas and others — to ease the burden on European countries that are now totally dependent on Russia,” Biden said.

The EU gets about 40% of its gas from Russia. This level of dependence means that Europe would likely experience power rationing and blackouts in the event of a complete Russian gas shutdown, while even a partial disruption “could have significant impacts on prices and production. industry in Europe,” according to Citi analysts. noted this week.

Reuters Also reported last week that State Department officials, including the senior energy security adviser Amos Hochstein, approached and questioned energy companies operating in the EU about what they plan to do if Russia invades Ukraine and gas supplies are cut off or severely restricted.

A source told the outlet that the United States had pledged “to support Europe in the event of an energy shortage due to conflict or sanctions” and said Hochstein had spoken with heavy liquefied natural gas market companies and the main LNG exporter, Qatar “to see if they can help the United States.

Market forces are already doing the work on their own. Gas prices in Europe have fallen this month, with February futures on the Dutch TTF trading for less than half their peak level in December.

Analysts at Energi Danmark Group assessed in a market report yesterday: “Over the past two weeks, the supply of liquefied natural gas to Europe has increased significantly with several large tankers now heading to Europe. Europe because it has become more profitable for producers to sell their gas here.

U.S. LNG operators have played an important role in this and are expected to play an even more important role throughout the year, with stronger in-store export growth coupled with Cheniere’s expanded liquefaction capabilities at its Sabine Pass facility. .

Gas and geopolitics: With more details pending, it should be noted that the Biden administration’s decision last month to reject calls for a ban on petroleum product exports – something a number of congressional Democrats have asked Biden to do – separately suggested that she sees the benefits associated with exported oil and gas exceeding anything that can come from keeping it at home.

The oil and gas industry has had a big hit with exports at today’s prices, but they’ve also argued that American product is a big help for friends in need of fuel, perhaps a rare point of d agreement between Biden and the industry.

“We have allies, geopolitical allies, who need energy right now, and we are energy secure in this country right now. We produce more than we consume. David Callahan, president of the Marcellus Shale Coalition, told Jeremy last month. “Again, do we want to leave our friends in the cold and in the dark? Do we want them to depend on OPEC energy from Russia? »

Welcome to Daily on Energy, written by Washington Examiner Energy and environment editor Jeremy Beman (@jeremywbeaman). Email jbeaman@washingtonexaminer.com for tips, suggestions, calendar items, and anything else. If a friend sent it to you and you want to join, click here. If signing up doesn’t work, email us and we’ll add you to our list.

BIDEN ON OIL: Biden also said during his press conference yesterday that there is still work to be done to bring down energy prices in the United States and that the administration “will continue to work to try to increase supplies in oil available”.

But Biden has repeatedly asserted that it will be “difficult”.

The administration’s previous action on oil via the opening of the Strategic Petroleum Reserve is still ongoing. The Department of Energy last week announced the allotment of bids for the 18 million barrels of SPR crude, and shares of the other 32 million barrels of SPR made available through its exchange authority continue to be distributed.

National Security Council Spokesperson Emily Horne noted this week, the administration still has “tools” to influence prices. The administration said in its first announcement about the opening of the SPR that it could return to policing if prices warrant.

Brent crude remains above $88 a barrel at the time of this writing, and West Texas Intermediate sits above $86.

Building back better: Biden too noted yesterday, he expects parts of the Democrats’ Build Back Better Act to be squeezed out of the overall proposal as passed by themselves.

“I think we can split the package, get as much as we can now, and come back and fight for the rest later,” he said.

This could bode well for the hundreds of billions in spending on energy-related provisions and climate change mitigation, as Senator Sen votes. Joe Manchin said they had a good chance of reaching an agreement within the caucus.

VIRGINIA EXCLUDING EPA EMISSIONS REGULATIONS: Virginia has withdrawn its involvement in the pending Supreme Court case challenging the EPA’s authority to regulate emissions from power plants.

Jason Miyares, the new Republican Attorney General of Virginia, said on Twitter yesterday that the state “no longer participates in West Virginia vs. EPAand the State Solicitor General Andrew Ferguson filed a letter with the court saying that Virginia has changed its position in the case.

“Virginia no longer believes that the EPA’s repeal of the [Obama’s Clean Power Plan] was illegal,” Ferguson wrote. “Virginia is now of the opinion that [Clean Air Act] Section 111(d) did not grant the EPA the authority to issue the CPP, and therefore its repeal was necessary.

To recap, several states and coal companies are difficult the DC Circuit Court of Appeals decision last January overturning the Trump administration’s ACE rule (which repealed the clean energy plan) and rejecting Trump’s EPA reading of a more authoritative limited under the Clean Air Act to impose “off the fence” emissions regulations.

Oral argument in the case is scheduled for February 28.

EMISSIONS TO INCREASE: Energy-related greenhouse gas emissions are expected to rise over the next two years, the Energy Information Administration said in estimates detailed in its “Today In Energy” blog.

EIA noted economic activity, including increased travel and associated oil-related emissions, will drive a further 2% increase in emissions this year following a 6% year-over-year increase in 2021. however, the EIA still expects total emissions to remain below 2019 levels.

DEMOCRATS INCREASE REVIEW OF BITCOIN: Democrats are increasingly pressuring the crypto industry over its emissions.

The Oversight and Investigations Subcommittee of the Energy and Commerce Committee holds a hearing today on industrial energy consumption. Blockchains and Bitcoin in particular use large amounts of energy in “mining”, i.e. producing new coins.

And the senator. Elizabeth Warren of Massachusetts makes it clear that it wants to regulate the industry to reduce emissions.

“The extraordinarily high energy consumption and carbon emissions associated with Bitcoin mining could undo much of our work to tackle the climate crisis – not to mention the detrimental impacts of cryptomining on local environments and communities. electricity prices,” Warren said in a statement to Politics.

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