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Come On, Jack
Biden puts fuel on the European fire by keeping gas in the ground
Emmet Penney
February 23, 2022
Wednesday: halfway home. Here's what we're looking at today: Biden calls the Russian invasion, Germany halts Nord Stream 2, wind power spikes in Europe, Fuqing 6 reaches full power, and two more UK energy suppliers bite the dust.
Headlines
Biden calls Putin's actions "the beginning of a Russian invasion of Ukraine." (NYT)
S&P 500 Falls Into Correction Territory. (WSJ)
As elections near, Macron tries to balanced being "king" and candidate. (NYT)
Crypto industry makes push into regulated derivatives markets. (FT)
Farmers slam UK government's "contradictory" agricultural policies. (FT)
Fossil
Germany says Nord Stream 2 gas pipeline certification cannot now go ahead. (SPG)
As oil nears $100, Saudis snub US, stick to Russian pact amid Ukraine crisis. (WSJ)
Biden administration halts new drilling on legal fight over climate costs. (NYT)
Refiners in Asia want more oil--even near $100 a barrel. (BBG)
Are US shale firms spending enough on new oil projects? (OP)
Renewables
Wind power is back in Europe as storms spur record output. (BBG)
Siemens Gamesa will supply turbines for Polish offshore wind farms. (POWER)
After renewable energy installations dipped in 2021, industry renews call for clean energy package. (UD)
Philippines largest battery comes online at 120MW solar park. (PVM)
IFC to support 600MW solar park development in Indian state of Uttar Pradesh. (PVM)
Nuclear
Grid
Slovak agreement reached on measures to limit energy bills. (WNN)
Load growth, retiring fossil fuels creating "urgent need" for electric resources in the Southwest: report. (UD)
Should North Louisiana pay for coastal hurricane power grid repair? Foster Campbell says no. (TA)
Whoop Energy and Xcel Power shutter. (CN)
Vermont rejects semiconductor maker's plan to establish its own utility. (MBT)
Come On, Jack
Putin sent tanks into Ukraine and Biden has responded by imposing sanctions and seemingly leaning on Germany to halt Nord Stream 2. From a distance, this looks intelligible. NS2 means the end of German energy sovereignty. And Germany's need for Russian gas made them reluctant to push back against's Putin. Removing that obstacle creates the kinds of problems for Putin Biden wants. But looking at Biden's domestic energy policy, the picture gets blurrier.
The US is already sending as much LNG as it can to a desperately gas-hungry Europe. In fact, Europe is so hungry for LNG it's almost running out of room for the stuff. Now would seem like a good time for the US to ramp up fracing and oil production to meet Europe's needs while disempowering Russia. Hell, you should be able to drive out to the Permian Basin with a power drill and ram it into the ground until something sprays out.
Instead, the Biden administration is pushing aggressive "social cost of carbon" taxes on new fossil projects, which, after legal push back, has led to the Department of the Interior pausing new gas and oil leases. FERC has also made gas pipeline permitting more difficult. How is America supposed to help Europe out without ramping up production? Crossing its fingers in hopes Europe can hold out? Rising energy costs spell economic disaster, and Germany's business sector is staring straight down the barrel.
The truth is that Biden can't please the climate hawks in his party and America's European allies at the same time. The oil and gas sector in America is underinvested in part out of fealty to shareholders and in part out of society's commitment to much-ballyhooed "energy transition" to renewables, a dream which is now crumbling in the face of hard reality.
In response to the NS2 news, Dmitry Medvedev, the deputy chair of Russia’s security council, spoke for that hard reality when he said, “Well. Welcome to the brave new world where Europeans are very soon going to pay €2.000 for 1.000 cubic meters of natural gas!” He's got a point, hasn't he?
Crom's Blessing
Contemplate the work of Gerald Brom.
