Morning Consult Energy: What’s Ahead & Week in Review
 

Energy

Essential energy industry news & intel to start your day.
July 25, 2021
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Good morning, I hope you have had a great weekend so far! 

 

First up, the quiz: What share of U.S. adults say they have been asked by their local authority or power provider to conserve electricity or endure a rolling blackout so far in 2021? Here are your options (answer at the bottom of the newsletter): 

 

A: 12%

B: 18% 

C: 23% 

D: 27%

 

What’s Ahead

On Monday or shortly thereafter, a bipartisan group of senators is expected to release details of a $579 billion infrastructure plan, having agreed to partially pay for it via a delay to a costly Trump-era Medicare requirement.

 

What we’re watching: While Republican senators on Wednesday dealt a blow to the prospects for the plan backed by President Joe Biden by voting to block debate on the package because the bill language was unfinished, lawmakers and officials working on the negotiations are optimistic that it will be finalized over the weekend. We’ll be keeping an eye on the environment and energy provisions of the package, especially given that Sen. Tom Carper (D-Del.) has signaled that he could oppose the final bill if it did not include more funding for water and sanitation and that several of his colleagues have expressed concern about funding levels for transit priorities such as high-speed rail. 

 

On Tuesday the House Energy and Commerce Committee’s Subcommittee on Energy will hold a hearing titled “The Changing Energy Landscape: Oversight of FERC” at 10:30 a.m. ET.

 

What we’re watching: The Federal Energy Regulatory Commission is in the midst of a transition, as Commissioner Neil Chatterjee (R) prepares to depart and his role is taken by a Democrat. Chatterjee said during an American Enterprise Institute event Thursday that he worries that the commission’s focus on a clean energy transition (which he supports) could result in “accidentally driving out competitive resources that are needed to maintain reliability.” This hearing will involve all of FERC’s commissioners — though Biden still has yet to announce his nominee for Chatterjee’s successor — and will provide clues on how the commission will take on the twin priorities of reliability and the transition after its partisan balance tips to the left. 

 

This comes just a week after Rep. Sean Casten (D-Ill.) reintroduced a bill that would require FERC to factor emissions into energy rates (alongside a “Hot FERC Summer” campaign to raise awareness about the commission’s role, to the amusement of all who cover it).  

 

On Tuesday and Wednesday, the Chamber of Commerce will hold its annual Building Resilience Through Private-Public Partnerships conference, featuring Deanne Criswell, administrator of the Federal Emergency Management Agency. 

 

What we’re watching: In May 2020, Samantha Montano, assistant professor of emergency management and disaster science at the University of Nebraska, Omaha, told me that the United States has the wrong approach to disasters: “We wait for a disaster to happen and then we react to it. And we need to be proactive.” 

 

As discussed below, this past week has been one of cascading disasters on top of the ongoing coronavirus pandemic; in this context, resilience is top of mind. Is there a chance emergency management could be reliably included in climate conversations going forward? Montano expressed her cautious optimism on that point via Twitter on Friday. The conference is a rare opportunity to hear from Criswell directly on the future of the agency amid our changing environment as disaster management is in the spotlight.

 

On Wednesday, Securities and Exchange Commissioner Gary Gensler will give a speech to the United Nations on responsible investment. Why it’s worth watching: Gensler is expected to outline the SEC’s regulatory agenda for 2021 as it relates to climate change, which could include guidance on climate disclosures by companies.

 

On Thursday, Royal Dutch Shell will release its second-quarter earnings, followed on Friday by Chevron Corp.’s presentation and ExxonMobil Corp.’s presentation.  

 

What we’re watching: This year’s first-quarter earnings were an example of a rising tide lifting all boats, with most oil and gas majors seeing significant year-over-year gains as vaccination rates picked up, many major lockdowns ended and demand for their products consequently increased. However, in the weeks since the end of the second quarter, the rise of the delta variant has had a negative impact on both oil prices and the economy as a whole more recently, and an agreement by the Organization of the Petroleum Exporting Countries and its allies to ease oil production curbs over the course of the next year also pushed prices down.  I will be watching what the oil majors have to say about the outlook for oil given the latest developments.  

 

 

Events Calendar

 

Week in Review

Never before have so many friends and acquaintances who do not spend all their time thinking about energy and climate change approached me to discuss it. This past week, the catastrophes seemed to hit critical mass: an ongoing, record-setting fire in Oregon; record-setting storms killing dozens in China’s Henan province; Germany continuing to search for those missing after a deluge of its own. Meanwhile, here in New York, the sky was hazy mid-week after wildfire smoke from the West drifted across the continent and led to some of the worst air quality in the world.

 

Both the fires and the floods have a connection to climate change, outlined particularly well in The Washington Post and by NASA back in February. But they have been made worse by a lack of infrastructural preparation. The Post’s Ilan Kelman called the series of disasters “the face of decades of poor planning and inadequate societal interventions,” calling out in particular the choices to build communities in burnable areas without taking sufficient measures to combat fire damage. Somini Sengupta of the New York Times spoke on The New York Times’ The Daily podcast on Friday in similar terms, citing massive flooding of the New York subway system as evidence that infrastructure is simply not ready for more extreme weather patterns. 

 

But on a slightly brighter note, these crises and resulting conversations also coincided with one major victory in California’s battle against wildfires: the state’s PG&E Corp. announced plans to bury roughly 10,000 miles of power lines in a bid to prevent wildfires like the ones currently blazing across California, Oregon and elsewhere. The project is expected to cost $40 billion and would involve roughly 10 percent of the utility’s aboveground lines. 

 

This marks a reversal of the utility’s long-held position that undergrounding is too expensive. Chief Executive Patti Poppe said of the decision, “This is where we say it’s too expensive not to underground. Lives are on the line.” It also comes just days after PG&E said its equipment may have sparked the far-reaching Dixie Fire in Butte and Plumas counties, according to a report the utility filed to the state’s utility regulatory commission.

 

In the other top energy news of the week: 

  • The White House introduced a framework, called the Justice40 Initiative, for how federal agencies should make sure at least 40 percent of the benefits from energy and environmental spending is directed to communities that have borne the brunt of environmental injustice, with the final definition of disadvantaged communities to be issued later this year. Twenty-one federal programs, including those that oversee flood mitigation grants and the drinking water state revolving fund, will be the first to carry out the initiative.
  • The startup Form Energy Inc. said it has succeeded in building a battery made of iron, designed to be the “kind of battery you need to fully retire thermal assets like coal and natural gas” power plants, according to the company’s Chief Executive Mateo Jaramillo. While the iron-air batteries are too heavy for use in electric cars, Form said they will be suited to cheaply storing electricity once they are ready for use by about 2025, if all goes as planned.
  • Embattled utility FirstEnergy Corp. is set to pay a $230 million penalty as a part of a deferred prosecution agreement to resolve allegations of the company’s involvement in an Ohio bribery scheme resulting in a $1.5 billion legislative bailout of two nuclear plants owned by a FirstEnergy subsidiary. Upon FirstEnergy’s compliance with the agreement — which also compels FirstEnergy to develop a stronger ethics and compliance program, among other things — a related charge of wire fraud will be dismissed. 
  • After a heated hearing, the Biden administration’s nominee to lead the Bureau of Land Management, Tracy Stone-Manning, advanced through the Senate Energy and Natural Resources Committee on a 10-10 party-line vote, with Republicans opposed to her affiliation with an environmental activist group in the 1980s. Majority Leader Chuck Schumer (D-N.Y.) said he would bring the nomination to a full chamber vote, saying she will “repair the damage of the last four years.”
 
Stat of the Week
 

5%

That’s the share of Indian homes that had air conditioning, per a seminal 2018 report from the International Energy Agency. This is compared with 90 percent of U.S. homes and 60 percent of Chinese homes; air conditioning is a “huge growth industry” on a global scale, according to Ian Campbell, a senior fellow at the clean energy think tank RMI. 

 
The Most Read Stories This Week
 

1) Startup Claims Breakthrough in Long-Duration Batteries

Russell Gold, The Wall Street Journal

 

2) See How Wildfire Smoke Spread Across America

Nadja Popovich and Josh Katz, The New York Times

 

3) Exclusive: White House details environmental justice plans

Adam Aton, E&E News

 

4) Net Zero Is Hard Work, So Companies Are Going ‘Carbon Neutral’

Jess Shankleman and Akshat Rathi, Bloomberg

 

5) Democrats Propose a Border Tax Based on Countries’ Greenhouse Gas Emissions

Lisa Friedman, The New York Times

 

6) Granholm announces new building energy codes

Zack Budryk, The Hill

 

7) PG&E Aims to Curb Wildfire Risk by Burying Many Power Lines

Ivan Penn, The New York Times

 

8) America in 2090: The Impact of Extreme Heat, in Maps

Susan Joy Hassol et al., The New York Times

 

9) U.S. EPA Ordered to Reconsider 2019 Renewable Fuel Standards

Maya Earls, Bloomberg Law

 

10) Are Wind Turbines a Danger to Wildlife? Ask the Dogs.

Sarah Zhang, The Atlantic

 
Other Energy News
 
 
Morning Consult