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Europe Trades Dependency on Russian Gas for Chinese Solar Panels

January 4, 2023 by Leave a Comment

The European Union added 41.4 gigawatts of solar capacity in 2022, increasing 47 percent from the 28.1 gigawatts added in 2021. It was led by Germany with 7.9 gigawatts of solar capacity added and Spain with 7.5 gigawatts. Other European countries also added solar capacity in 2022 as follows: Poland (4.9 gigawatts), the Netherlands (4 gigawatts), France (2.7 gigawatts), Italy (2.6 gigawatts), Portugal (2.5 gigawatts), Denmark (1.5 gigawatts), Greece (1.4 gigawatts), and Sweden (1.1 gigawatts), rounding out the top 10 European buyers of solar power. It seems that Europe has not yet learned from the foibles incurred from its energy dependence on Russia, as it is now turning to China to buy solar panels–the largest solar panel producer in the world–as the continent continues with its energy transition to renewable generating technologies.

Source: PV Magazine

The increase in E.U.’s solar capacity is due to taxpayer-funded incentives for solar power. For example, Italy introduced its Superbonus 110% incentive scheme in 2020. Under the program, homeowners are entitled to a tax credit of up to 110 percent on the cost of upgrading their home, such as installing insulation systems, heat pumps and solar panels or replacing an old boiler, or undertaking other projects that reduce the risk of damage from seismic activity. People claim the subsidy by subtracting the costs of the projects from their tax returns over a five-year period, or pass the credit on to the building contractor, who subtracts it from its taxes or sells the credit to a bank, which in turn is refunded by the government. The extra 10 percent covers bank interest. So far, the Italian government has paid out about €21 billion ($22 billion) since launching the program in July 2020 as part of the country’s post-pandemic recovery strategy.

Poland took third place in solar capacity additions despite switching from net metering to net billing this past spring. The new provisions established that all new PV “micro-installations” up to 50 kilowatts had to operate under a new net billing system. The new net billing system replaced net metering that was in place since 2016. Under the old net metering rules, owners of PV systems with capacities up to 10 kilowatts could supply up to 80 percent of their power to the grid, and PV systems ranging from 10 kilowatts to 50 kilowatts were allowed to supply up to 70 percent of their electricity to the grid. Under the new net billing rules, a bill is prepared that includes the energy generated. The price is calculated according to a model related to the price of a kilowatt-hour during the “day-ahead trading.”  The new net billing provisions also allow PV system owners who submitted correct grid-connection applications by March 31 to have access to the country’s rebate program, launched in July 2019, for the next 15 years.

E.U.’s Total Solar Capacity

The E.U.’s total solar power capacity increased by 25 percent, from 167.5 gigawatts in 2021 to 208.9 gigawatts in 2022. SolarPower Europe forecasts annual PV growth in Europe to be 53.6 gigawatts in 2023 and 85 gigawatts in 2026, with the E.U. solar market more than doubling within four years, reaching 484 gigawatts by 2026. There are five key areas for getting Europe ready for increasing solar power: expanding the pool of solar installers, maintaining regulatory stability, improving grid stability, streamlining administrative procedures, and strengthening European manufacturing.

E.U. Buys Solar Panels from China

As Europe pivots from Russian fossil fuels, the Chinese solar industry is expected to gain—potentially at the expense of E.U.’s energy security. Chinese solar panels have increased in popularity among European consumers in addition to electric blankets, hand warmers, candles and wood as they face a cold winter with less access to natural gas.

The E.U. depends on China for the bulk of its solar panels. Chinese customs data show a steep increase in its exports of solar panels to Europe with the value of solar panels sales to the E.U. more than doubling. Solar panel sales to the E.U. from January to August this year were over $16 billion compared to $7.2 billion over the same period last year.

According to the International Energy Agency, in 2021, China accounted for 75 percent of global solar panel production, compared to only 2.8 percent for Europe. And, China has an even greater market control on the components and materials required to make solar panels, such as solar cells, silicon wafers, and polysilicon. At one time Germany was the leader in solar panel production, but China with its cheap energy and “slave” labor overtook Germany in solar panel production in 2015.  According to Clean Energy Wire, “the overall drop in employment has been mostly due to the collapse of Germany’s solar power industry over the past decade, as many companies were forced out of business thanks to cheaper competitors from China scooping up most of the market.”

From January to August, China’s solar PV exports reached $35.77 billion, exceeding the value of solar PV exports in all of 2021. The soaring demand stretched supplies and raised the prices of silicon, the raw material for PV products, to a high of 308 yuan ($42.41) per kilogram, the highest in a decade. China’s production capacity for silicon is expected to exceed 1.2 million tons at the end of this year, and to double to 2.4 million tons next year. Silicon products are largely made in Xinjiang, the world’s most important production base for polysilicon where Muslim Uyghurs are used as labor and coal-based electricity is generated at an extremely low cost of 3 cents per kilowatt hour.

Europe needs caution in rushing from Russia to China for energy. China, like Russia, uses economic relations for political goals. For instance, after Lithuania showed support for Taiwan, Chinese customs blocked Lithuanian goods and China led a corporate boycott of multinationals with ties to Lithuania.  Similarly, in 2010, China cut off rare earth mineral exports to Japan (which are critical to renewable technologies and in which China dominates) because of a territorial dispute.

Conclusion

Europe is continuing with its transition to intermittent renewable energy by increasing its solar power capacity additions by almost 50 percent this year. Germany and Spain led the additions with each adding over 7 gigawatts of solar capacity. Germany was once a leader in solar panel manufacturing, but has been replaced by China because of China’s cheap energy and “slave” labor. Now that Europe has moved away from buying energy from one authoritarian government, Russia, it is turning to another, China, who dominates the solar market and its components. Europe should be worried more about energy security than it has shown in the last decade when it turned away from its own production of oil, natural gas and coal, shuttering fossil fuel generators, cutting lease ales, and banning hydraulic fracturing and horizontal drilling.

America should not follow–but is–following in Europe’s energy transition footsteps and can look forward to energy price increases in the future, along with less secure energy supplies. The West’s preoccupation with renewable energy sources as a “solution to global warming” does not stand up to the tests of its own interests in energy, economics, and national security.  Despite the clear writing on the wall, it has chosen to ignore all the signs and plunge ahead.  It appears there are still lessons that need to be learned.

*This article was adapted from content originally published by the Institute for Energy Research.

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The Unregulated Podcast #113: Predictions

December 31, 2022 by Leave a Comment

On the last episode of The Unregulated Podcast for 2022, Tom Pyle and Mike McKenna discuss how their predictions for the year panned out, and boldly predict how 2023 will unfold.

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The Unregulated Podcast #112: Grain of Salt

December 16, 2022 by Leave a Comment

On this episode of The Unregulated Podcast Tom Pyle and Mike McKenna discuss the latest inflation numbers, the last hurrah of the 117th Congress, Mike’s candidacy for RNC chair, and Secretary Jenny’s “major” announcement.

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China Strengthens Its Energy Security As Biden Weakens America’s

December 13, 2022 by Leave a Comment

It is not enough for China to be the dominant economy in the electric vehicle battery supply chain and the biggest processor of critical minerals, but it is now making inroads in the liquefied natural gas (LNG) tanker business with nearly 30 percent of this year’s record orders. Local and foreign ship owners turn to China’s shipbuilders because shipbuilders in South Korea are fully booked by orders to service Qatar’s massive North Field expansion. Three Chinese shipyards, with only one of them having experience in building large LNG tankers, won almost 30 percent of this year’s record orders for 163 new LNG carriers, making gains in a sector where South Korea usually captures most of the business. LNG tanker orders for Chinese yards tripled as China’s gas traders and fleet operators sought to secure shipping after freight rates soared to records following Russia’s invasion of Ukraine. Chinese yards also attracted more foreign bookings, including the first overseas orders for some ship makers only recently certified to build membrane-type LNG carriers.

This year, Chinese shipyards won 45 LNG tanker orders worth an estimated $9.8 billion–about five times their 2021 order values. By late November, Chinese yards had grown their LNG order books to 66 from 21, giving them 21 percent of global orders worth around $60 billion. In comparison, Chinese shipyards have only built 9 percent of the existing global LNG fleet.

Source: Reuters

LNG tankers, like aircraft carriers, are among the most difficult ships to build, taking up to 30 months. LNG is natural gas that has been cooled to –260° F (–162° C), changing it from a gas into a liquid that is 1/600th of its original volume for shipping. For membrane-type containment tanks, 200 workers spend two months welding barrier walls made of paper-thin steel and 130 kilometers (81 miles) of connecting lines. Workers on these systems have to be certified by Gaztransport & Technigaz, a French engineering company that holds the patents and licenses its designs to shipbuilders.

Shanghai-based Hudong-Zhonghua Shipbuilding is the only Chinese yard with experience building large LNG carriers, having built dozens since 2008. This year, it received 75 percent of China’s new orders, of which 26 orders were from local owners, compared to nine in the last two years. Two other shipyards–China Merchants Heavy Industry and Yangzijiang Shipbuilding–were certified to build large LNG carriers this year and received interest from both local and foreign shippers. Chinese shipyards received 19 foreign orders for LNG tankers this year and that number is likely to grow.

China needs about 80 vessels to ship 20 million metric tons a year of LNG from the United States, which will be part of the 33 percent increase in the global LNG fleet over the next five years. The tankers may also be used to trade cargo on other routes.

Source: Reuters

Qatar LNG

Qatar is already the world’s top LNG exporter and its North Field expansion project will enlarge that position and help guarantee long-term supplies of LNG to Europe as the continent seeks alternatives to Russian natural gas. The North Field expansion of the world’s largest liquefied natural gas project includes six LNG trains that will increase liquefaction capacity from 77 million metric tons per year to 126 million metric tons per year by 2027. Qatar signed deals for stakes in the first phase of the expansion project, North Field East, with TotalEnergies, Shell, Exxon, ConocoPhillips and Eni. For the second phase, North Field South, TotalEnergies is investing around $1.5 billion. The North Field South project will have three partners, part of the same group as North Field East, with signing ceremonies expected soon.

LNG prices rose from record lows below $2 per million British thermal units (mmBtu) in 2020 to highs of $57 in August. This increased spot LNG cargo prices to $175 to $200 million, from around $15 to $20 million two years ago, and has consolidated trading in the hands of a few major traders. QatarEnergy is expected to become the world’s largest trader of liquefied natural gas over the next 5 to 10 years, a position that is currently held by Shell. Following Russia’s invasion of Ukraine, Europe became a major market for LNG, where massive amounts are being purchased to replace Russian natural gas that used to make up almost 40 percent of the continent’s imports. Europe is estimated to need to import around 200 million metric tons of LNG over the next decade to phase out Russian natural gas.

Shell and TotalEnergies are estimated to have a combined portfolio of 110 million metric tons of the current estimated market of 400 million metric tons. QatarEnergy’s portfolio is estimated at 70 million metric tons, and BP’s is estimated at around 30 million, with these four players accounting for more than half of the market. Traders estimate Qatar’s nameplate LNG export capacity to be around 106 billion cubic meters with about 90 to 95 percent in long-term contracts and 5 to 10 percent in spot contracts.

Conclusion

China is ensuring that it will be able to ship LNG from the United States by building LNG tankers. Despite its new entrance as a major LNG shipbuilder, it is getting almost 30 percent of the new tanker orders, both domestic and foreign, due to South Korean shipbuilders being fully booked by Qatar’s expansion in the North Field. China is clearly ensuring that it will be able to get energy of all kinds in the future, while it uses the demand for LNG to enhance its already-strong shipbuilding capability. China’s energy policy is in sharp contrast to the climate and energy policy of the United States under the Biden administration, which is pursuing only intermittent renewable energy (wind and solar power) that is very expensive once the storage batteries to back-up the intermittency periods are taken into cost consideration.

*This article was adapted from content originally published by the Institute for Energy Research.

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The Unregulated Podcast #111 Too Many Mikes

December 9, 2022 by Leave a Comment

On this week’s episode of The Unregulated Podcast Tom Pyle and Mike McKenna discuss the Georgia runoff election, Vanguard’s withdrawal from ESG commitments, and the leadership race for the RNC chair.

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Biden Blocks Much-Needed Permits

December 8, 2022 by Leave a Comment

After recently denying a permit to an enormous U.S. refinery in St. Croix, U.S Virgin Islands, which could supply petroleum products to the Northeast, President Biden’s Environmental Protection Agency (EPA) is denying a renewal permit to a coal-fired plant in Ohio that generates 11 percent of the state’s electricity. EPA denied the James M. Gavin plant—a 2,600-megawatt supercritical coal plant– in Gallia County permission to release coal ash into an on-site coal ash pond that was part of its normal operations since first coming on line in 1975. The plant is Ohio’s largest generator and the 8th largest coal plant in the nation.

EPA gave the facility near Cheshire 135 days to find another way to dispose of the ash. If it cannot find one, the plant may have to shutter. As is typical with the Biden administration, there is no analysis of the impact on the electric grid of the plant’s closure, nor what the impact on electricity prices would be since Biden’s goal is to make coal, oil, natural gas and electricity prices generated from those fuels very expensive. The Gavin plant is in the PJM Interconnection, which oversees the grid that supplies electricity to Ohio, 12 other states and the District of Columbia.

According to the coal industry, coal ash has not been definitively linked to any serious health problems and coal ash contamination was never detected in the groundwater near Cheshire. The EPA, however, indicated that the monitors measuring the groundwater could miss contamination because they are too far apart. According to the EPA, the groundwater monitoring around the ash pond is inadequate and the Gavin plant failed to conduct an appropriate statistical analysis of contamination data. Supposedly studies conducted by environmental groups have found trace amounts of coal ash contamination.

Coal ash regulations were finalized in the last year of the Obama Administration but were not enforced under the Trump administration where America first was the government’s energy policy, producing reliable, abundant and inexpensive energy. Earlier this year, however, the Biden Administration indicated it would revoke permission for some coal plants to release ash into unlined coal ash ponds.  This is presumably part of his “whole of government” approach to climate, building on his promise to “end fossil fuels.”  The Administration’s myriad actions can only be seen in this context as he has taken similar actions regarding oil and gas development and use.

Last month, EPA denied a request by the James M. Gavin Power Plant for extra time to comply with the federal coal ash rules. Barring any grid reliability problem that might justify a later deadline, the EPA indicated that no more coal ash can be released into the pond after April 12, 2023. The company that manages the facility plans to keep operating while converting to a “dry ash” handling system that complies with the federal rules.

The Gavin coal plant has already stopped placing coal combustion residuals into the Bottom Ash Pond and is expected to complete conversion of its units to dry ash handling this month. Dry ash handling generally uses air to cool coal ash for storage before commercial use or eventual disposal in a landfill. Unlike wet ash handling, it does not use water to clean out and transport ash. Landfills that receive dry coal ash should be properly lined and meet regulatory requirements in effect since 2015. The company also expects to close its bottom ash pond by September 2024.

The EPA still has not made final rulings for about 50 other coal plants that have asked for more time to comply with coal ash regulations. Plants that have sought extensions include two 1950s-era coal plants that are subsidized by Ohio ratepayers under House Bill 6: Clifty Creek and Kyger Creek. EPA issued a proposed denial on January 11 for the Clifty Creek plant—a 1,300-megawatt coal plant in Madison, Indiana. Clifty Creek officials applied for an extension until April 2023 to continue using the plant’s coal-ash basins, to give them time to construct alternative disposal systems. As with Gavin, the closure of the plant could cause increased and accelerated costs to the plant operator and could also negatively impact the stability of the electric grid and power markets.  EPA has not yet issued a decision on the Kyger Creek coal plant’s extension request. The Kyger Creek Power Plant is a 1,086-megawatt coal-fired plant located south of Cheshire, Ohio in Gallia County.

Conclusion

Under the Biden administration, the regulatory climate is not hospitable to coal, and it is forcing economic changes to fossil fuel plants that are moving the power grid toward renewable energy, particularly wind and solar power. While coal has been and continues to be a workhorse at U.S. power plants, regulations finalized during the Obama administration made coal plants uneconomic compared to natural gas plants. Now, the Biden administration is pushing to close the remaining coal plants that produce reliable power 24/7 because of its zero carbon policy, and transition the U.S. electrical system to wind and solar power that operates only when the wind blows and the sun shines.

Europe is finding that very low wind speeds are reducing wind’s generation levels and is forcing Europe to use more natural gas and coal for generation, which is increasing rather than decreasing emissions. The Biden administration may find the same result, but have no coal plants left to produce power when needed most despite having the largest proven coal reserves in the world.

*This article was adapted from content originally published by the Institute for Energy Research.

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Transmission Permitting is Broken

December 7, 2022 by Leave a Comment

Net zero proponents, such as Net Zero America at Princeton University, believe the United States needs to build between 2x and 5x as much electricity transmission as we have today. The National Renewable Energy Laboratory estimates that to meet President Biden’s goal of a zero-carbon gird by 2035, the transmission capacity must increase up to 3 times today’s capacity “or between 1,400 and 10,100 miles of new high-capacity lines per year starting in 2026.” One big question is whether this is even possible. Based upon the approvals for transmission given out by the Biden administration, there is no possible way to build that many miles of transmission lines.  

The White House recently celebrated their “ongoing efforts across the Biden-Harris Administration to accelerate the buildout of long-distance, high-capacity transmission lines.”  But a deeper look into what they are bragging about shows how deeply dysfunctional the federal government is with transmission permitting.  

The White House boasted that they “jumpstarted permitting for key transmission lines that cross Federally-managed lands. In 2022, three major transmission projects received final approvals for construction from the Department of the Interior,” including the Gateway South Transmission Line, Ten West Link Transmission Line, and Gateway West Transmission Line. Let’s investigate these approvals.  

Gateway South Transmission Line

In May 2022, the administration granted a “notice to proceed” for this 400-mile transmission line from western Wyoming to central Utah. This notice to proceed, however, was not “final approval for construction” as the White House claimed. A notice to proceed is an important step, but this notice to proceed (NTP) only “authorizes PacifiCorp to start non-surface disturbing, pre-construction work on the ROW.” 

Not only does the notice to proceed only authorize pre-construction work but it does not authorize preconstruction work for the entire transmission line. The notice to proceed states, “Several segments of the transmission line are excluded from this NTP. Segments of the transmission line excluded due to incomplete cultural treatments will receive an NTP issued by the BLM Field Manager within whose field office the cultural site is located, once BLM archaeological staff and the Field Manager determine the treatment has been completed in compliance with the Historic Properties Treatment Plan (HPTP).” While PacifiCorp has started some work, there is no green light to start with the actual construction.  A partially permitted transmission line does not transmit. 

The process of authorizing this transmission line has been slow. It started in November 2007, when PacificCorp first submitted an Application for Transportation and Utility Systems and Facilities on Federal Lands (SF-299) to the Bureau of Land Management (BLM) for this project. It then took 9 years for the BLM to reach a Record of Decision and then an additional 5½ years for PacifiCorp to receive the notice to proceed on parts of the line.  

All told, 15 years have passed since PacifiCorp submitted their original application for this transmission line and actual construction has not yet begun.  Nor has such construction been permitted.    

Ten West Link Transmission Line

In July 2022, the administration granted approval for the construction of the Ten West Link Transmission line—a proposed 125-mile transmission line from Tonopah, Arizona to Blythe, California. This is great news, but the approval was still not a speedy process.  

In the case of Ten West Link, the application (SF-299) was filed in September 2015 and the Bureau of Land Management worked through a relatively speedy process and signed the Record of Decision in November 2019—a mere four years. But it still took along 3 years after the Record of Decision for the federal government to give the go-ahead to start construction.  Less than 7 years from filing an application to start of construction is still not fast enough to even double our transmission capacity before 2050  

Gateway West Transmission Line

In September 2022, BLM signed a notice to proceed for some of the segments of this proposed 1,000-mile long transmission line from eastern Wyoming to western Idaho. Like Gateway South, these approvals have been over a decade in the making.  

This transmission line was first proposed in May 2007. From the proposal to the Record of Decision (ROD), it took 6 years until November 14, 2013. But even then, the BLM explains, “The ROD identifies the BLM authorized route on public lands for Segments 1 through 7 and Segment 10. As explained in the ROD and initially presented in the final EIS, the BLM has chosen to pursue a phased decision for the project, deferring the decision for Segments 8 and 9 until a later date.” In other words, after 15 years, there still is no final approval to construct this transmission line.  The uncertainty associated with deferring a decision on the entire route stifles investment since builders are properly concerned that conditions may change the economics of any proposal, triggering potential additional delays and red tape. 

The White House bragged about giving three projects “final approval for construction” but it appears that only one of the three received an actual final approval for construction. The other two—Gateway South and Gateway West were both proposed over 15 years ago and have yet to receive approval to fully construct the transmission lines.

There are currently around 160,000 miles of high-voltage power lines in the United States. The White House is proud of making progress toward approving less than 1,600 miles of transmission lines—not for actually approving 1,600 miles of transmission lines but for making progress. Progress is good, but it has taken over 15 years for the federal government to make this progress, which would increase capacity by 1 percent. Given these examples of the slow transmission permitting process by the federal government, it does not appear possible to get enough transmission permitting to achieve President Biden’s goals. It has taken 15 years to permit a 1 percent increase in capacity, while Biden’s plans call for a 200 percent to 500 percent increase in a dozen years.  Something is wrong with their math.   

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Europeans Plan on Banning EV Charging To Avoid Blackouts

December 6, 2022 by Leave a Comment

Switzerland may ban electric vehicles from being used except for “essential” purposes this winter as government officials plan for a possible energy crisis during the winter months. Swiss officials drafted emergency proposals that restrict power usage if electricity shortages occur this winter. They include fewer hours for shop owners, limited use of streaming services, lower temperature settings on buildings of 20 degrees Celsius or 68 degrees Fahrenheit, bans on concerts, theater performances and sporting events, as well as only essential use of electric vehicles. The irony of the electric vehicle restriction is that present government policy has electric vehicles ramping up to 50 percent of new car sales by 2025. It’s tough to convince car buyers to go electric if the government restricts their use because of an electricity shortage. Switzerland fears possible blackouts because the country relies on hydropower for 60 percent of its electricity production, but in the winter months that production slows and the country must rely on imports to fill the gap. Electricity is expected to be in short supply in Europe this winter, so import reliance may become difficult.

Switzerland’s emergency plan is split into two tiers: crisis and emergency. It also has three levels of restriction in the first tier and two levels of restriction in the third tier. Swiss officials will activate each tier and level based on supply level. Essential items such as medical care or the supply of water or energy will not be restricted.

At the lowest level, buildings will only be able to be heated to 20 degrees Celsius and residents will be asked to limit their washing machines to a maximum of 40 degrees Celsius. Under the next level, temperatures will be lowered to 19 degrees Celsius and streaming services asked to lower the resolution of videos from HD quality to standard. If the situation worsens, shops will be asked to close two hours early and electric vehicles limited to essential journeys. Under crisis measures, hot water may be disabled in public bathrooms and the use of electric leaf blowers barred. Next, escalators will be stopped and outdoor Christmas lighting turned off. If shortages persist, cryptocurrency mining would be banned, along with closure of swimming pools and the banning of lights in sports stadiums. If the most extreme shortages hit, sports matches, concerts and theatre performances would be canceled, and all leisure businesses forced to close.

These measures are being made necessary by decades of actions in Europe against the use of fossil fuels in favor of renewable energy, mostly intermittent wind and solar power, ostensibly in pursuit of meeting climate commitments. Wind has been performing poorly in Europe recently with very low wind speeds resulting in low levels of generation.

Switzerland’s Sources of Generation

Besides hydropower, Switzerland generates electricity from nuclear power, which it wants to phase out despite its contributing a third of electricity supply, and fossil fuel plants and solar or wind generation provide the rest. In the wetter months, rainfall and snow increases hydroelectric power and the country exports much of it. But in the colder months when hydroelectric generation slows, Switzerland imports from neighboring countries. The Russian invasion of Ukraine, combined with the transition to renewable energy in Europe, has made the level of those imports uncertain.

In the past, Switzerland has imported electricity from France and Germany. The French government recently started instructing officials around the country to plan for potential rolling electricity outages as soon as next month. Any scheduled power cuts in France would be telegraphed days in advance and would hit small sections of the country at different times. The cuts, which would last for two hours in the mornings or in early evening, when power use is at a high, would not apply to sensitive sites, including hospitals, nursing homes, fire and police stations and prisons.

France gets most of its power from its 56 nuclear power plants, but many of its plants are down for maintenance. The country is struggling to repair a series of problems that have left nearly half of its nuclear fleet offline, limiting exports. Électricité de France, or EDF, which runs France’s nuclear power plants, announced the restart recently of a large reactor in northern France, although further delays are expected at other nuclear sites.

In Germany, sales of candles have soared as that country was most dependent on Russian natural gas. Germany is now burning coal and lignite to get through the winter. Elsewhere, Britain’s National Grid operator has warned households of possible blackouts from 4 p.m. to 7 p.m. if natural gas used to produce electricity runs short. Electric car owners in Finland are being advised not to heat their plugged-in vehicles on freezing mornings to avoid straining the grid. The mean temperature in Finland during the winter is below freezing. A recent report by the European Network of Transmission System Operators showed that electricity supplies in France, Sweden and Finland, among others, were at risk of outages.

Unseasonably warm weather during October and November in Europe allowed households and businesses to keep their furnaces turned off, helping natural gas stocks last longer than expected and bringing down natural gas prices. But Europe is now facing its first major cold snap, with an Arctic air blast from Greenland expected to send temperatures plunging in coming days. Governments have already been dipping into some of the emergency gas reserves, driving European natural gas prices back up to their highest levels in six weeks.

Switzerland’s Climate Goal

Switzerland’s climate goal is to cut its greenhouse gas emissions in half by 2030. The Swiss, however, do not intend to reduce emissions by that much within their own borders. Instead, it is paying poorer nations, like Ghana or Dominica, to reduce emissions and give Switzerland credit for the reductions. For instance, Switzerland could pay to install more efficient lighting and cleaner stoves in up to five million households in Ghana, which would help households to move away from burning wood for cooking. Switzerland would then get to count those emissions reductions as progress toward its own climate goals.

Whether this mechanism is fair is at issue. At the United Nations climate conference in Sharm el Sheikh, Egypt, the issue of reparations from wealthy countries to poor countries arose, which raises the issue of the extent to which rich nations should be compensating poorer countries. If nations do as Switzerland intends, it could delay climate action in wealthier parts of the world while shifting the work of reducing emissions toward the global poor, who already suffer from a shortage of energy. In addition, it could take advantage of projects in poorer countries that would have proceeded anyway, with or without foreign funding.

Switzerland has been explicit that it cannot reach its emissions reduction targets on its own, and that it needs to look for at least a third of its cuts elsewhere. It already generates the bulk of its electricity from non-carbon energy — namely, hydroelectric and nuclear power — making further emissions cuts difficult.

Conclusion

Switzerland has a several-tier system for reducing electricity usage should power shortages occur. Part of the plan is to require only essential uses of electric vehicles, despite wanting them to supply 50 percent of new car sales by 2025. Switzerland obtains most of its electricity from non-carbon sources and feels it needs to get further reductions from the global poor to meet its carbon goal of 50 percent reduction in emissions by 2030. That raises issues as expressed above. Clearly, going to net zero carbon is not easy and very expensive. Is President Biden, who is following in Europe’s footsteps, understanding the issue correctly? Has he explained the magnitude of the issue to the American people?  Americans may be able to peer into their own futures if government energy policies are not changed by watching Europe closely this winter.  Its prospects for reliable energy are not good and could be even worse in future years.

*This article was adapted from content originally published by the Institute for Energy Research.

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Biden Backs Corrupt Dictators Over American Energy Producers

December 2, 2022 by Leave a Comment

President Biden is continuing with his program of “anywhere but the United States” when it comes to oil investment and future production. The United States is allowing Chevron to resume pumping oil from its Venezuelan oil fields that U.S. sanctions had halted almost three years ago. The license was granted to Chevron after President Nicolás Maduro’s government agreed to implement an estimated $3 billion humanitarian relief program and continue dialogue in Mexico City to supposedly hold free and fair elections. The license, granted by the Treasury Department for six months, allows Chevron to return to its oil fields in joint ventures with the Venezuela national oil company, Petroleos de Venezuela SA (PdVSA). Venezuela is, as Democratic Senator Menendez of New Jersey noted, a criminal dictatorship with some of the worst human rights violations in the world. The idea that Maduro is going to implement free and fair elections is a pipe dream that Biden touts so that he can obtain oil from Venezuela while eventually destroying the U.S. oil and gas industry. Maduro is so blatant in his election abuses that on January 10, 2019, the Organization of American States (OAS) Permanent Council approved a resolution to not recognize the Nicolas Maduro dictatorship.

Chevron is also allowed to resume oil exports that were halted since 2019 when the United States increased sanctions against Venezuela. All exports should go to the United States and the company will be allowed to import feedstocks, including diluents used to bolster oil production, from the United States. In 2020, before the United States ordered a complete halt of drilling operations, Chevron’s share of Venezuelan oil production was 15,000 barrels a day–less than the production of a single oil field in the Permian Basin. Under the new license, Chevron will be able to repair and do maintenance in existing oil fields, but new drilling is not authorized. Venezuela’s destruction of their oil industry is widespread and the money grifted is used to buy votes, as in the case of keeping gasoline prices as low as 9 cents per gallon in their urban stronghold of Caracas.

According to the Biden administration, the license prohibits PdVSA from receiving profits from Chevron’s oil sales. Under the new license, profits from the sale of oil are supposed to go toward repaying debt owed to Chevron by PdVSA. Chevron plans to restore lost output as it performs maintenance and other essential work, but it will not attempt major work that would require new investments in the country’s oil fields until debts of $4.2 billion are repaid, which could take about two to three years depending on oil-market conditions.

The United States will require that Chevron report details of its financial operations to ensure transparency. According to Chevron, the new license allows it to commercialize the oil currently being produced at its joint-venture assets, which it will do in compliance with the current framework. The license prohibits Chevron from paying taxes and royalties to the Venezuelan government.

Venezuela produces about 700,000 barrels of oil a day, compared with more than 3 million barrels a day in the 1990s. Some analysts believe Venezuela could hit 1 million barrels a day in the medium term, a modest increment. Current U.S. rules prohibit both American and foreign companies from buying Venezuelan oil. To skirt sanctions, PdVSA had rerouted oil cargoes away from obscure export channels and to mostly Chinese buyers at a steep discount.  China has lent more money to Venezuela than any other country in the world, with much of the collateral in promised oil. Biden’s move to increase Venezuelan oil production thus makes China’s economic situation stronger relating to their vast lending to the Venezuelan government.

The multibillion-dollar humanitarian agreement — a verbal accord that has not yet been signed by the Maduro government — amounts to a concession by Mr. Maduro, who has long denied the scope of the humanitarian crisis in Venezuela. The estimated $3 billion in frozen funds intended for humanitarian relief and infrastructure projects in Venezuela would be administered by the United Nations, taking years to fully implement. The Venezuelan state funds frozen in overseas banks by sanctions are expected to be used to alleviate the country’s health, food and electric-power crises in part by building infrastructure for electricity and water-treatment needs, freeing up monies for Maduro to spread around to his political allies in the business community.  More than seven million Venezuelans, a quarter of the population, have fled to other nations under the Maduro dictatorship and recently, a record number of Venezuelans have arrived at the U.S. border for asylum.

Conclusion

Biden’s nonsensical energy policy is bad for the U.S. economy, harmful to U.S. national security, and a way to aid and abet enemies of freedom. Rather than sticking with President Trump’s America First energy policy, Biden prefers to get our oil and gas from Russia, Iran, Venezuela, and other OPEC nations, while denying our ally and neighbor, Canada, further access to transportation across the border.  The United States under President Trump’s energy policy became energy independent for the first time in decades and was able to remove OPEC’s power to set oil prices. Increased domestic production alleviated the need for imports from Venezuela, making supplies from communist dictatorships unnecessary.

Biden, through his anti-U.S. oil and gas policies and by refusing to lease federal lands to expand U.S. oil production in states like Alaska, Oklahoma, North Dakota, New Mexico and Texas, is increasing oil prices and gasoline and diesel prices for consumers not only in the United States, but worldwide. Moreover, he is courting totalitarians and strengthening them by buying their oil. The Biden administration should allow American energy producers to unleash domestic production instead of begging dictators for oil.

*This article was adapted from content originally published by the Institute for Energy Research.

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