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  • The EPA’s New Power Plant Rules // Heatwave Hammers Asia // US Natgas Rig Count Plummets

The EPA’s New Power Plant Rules // Heatwave Hammers Asia // US Natgas Rig Count Plummets

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Welcome to Grid Brief. Here’s what we’re looking at today: the EPA’s aggressive new emissions rules, Asia’s brutal heatwave, the drop in America’s natural gas rig count, and more.

The EPA’s New Power Plant Rules

The Environmental Protection Agency just rolled out its most stringent power plant emissions rules to date.

“The Biden administration’s draft rules mandate that coal units that remain in operation in 2040 begin capturing 90 percent of their carbon by 2030. Utilities can avoid most requirements by agreeing to shutter their coal units by 2032 or by 2035 if they run them only occasionally,” reports E&E News. “Plants that will retire by 2040 but don’t meet those criteria would co-fire with natural gas, meaning that they would use 40 percent gas to lower their emissions”

The regulations also require large natural gas plants operating continuously to either capture 90 percent of their emissions by 2035 or primarily utilize low-carbon hydrogen by 2038. Plants running at lower capacities would have less strict standards or might not be subject to immediate regulation.

The rules could negatively impact the American electric grid by forcing more reliable power plants offline before they can be replaced.

“The arithmetic doesn’t work,” FERC commisioner Mark Christie told the Senate a few days before the EPA debuted its new rules. “This problem is coming. It’s coming quickly. The red lights are flashing.”

Heatwave Hammers Asia

A punishing heatwave continues to swamp Asia.

The region is grappling with unprecedented temperatures, particularly in southern areas, as an emerging El Nino weather pattern takes hold. Vietnam recently recorded its highest-ever temperature of 44.2 degrees Celsius, leading to power shortage concerns.

Laos also broke temperature records, while the Philippines had to cut classroom hours due to dangerous heat and humidity levels. In Thailand, temperatures have stayed above 40 degrees Celsius in several regions, causing a surge in power demand.

The El Nino phenomenon, characterized by warmer ocean temperatures in the Pacific, has impacted global energy patterns. While it may relieve drought-choked areas in Argentina and the southern United States, it can spark hotter and drier conditions in parts of Asia and Australia.

The prolonged dryness in Vietnam, Laos, Myanmar, Cambodia, and Thailand due to low rainfall during the winter months has raised concerns about a potential three-year drought. “Because dry soil heats up faster than moist soil, a hot anomaly naturally forms as spring arrives,” Tieh-Yong Koh, an associate professor and weather and climate scientist at the Singapore University of Social Sciences told Bloomberg, adding that this dynamic has been exacerbated by climate change.

Other parts of Asia, including China, India, and Bangladesh, have also struggled in the heatwave’s grip. The Yunnan province in China endured its worst drought in a decade, while India is on alert for more heat waves following scorching temperatures in April.

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US Natgas Rig Count Plummets

The American natural gas rig count just hit its largest rig country drop in seven years in response to falling prices.

“Rigs searching for natural gas declined by 16 to 141 this week, according to data released Friday by Baker Hughes Co.,” reports Bloomberg. “The 10% drop is the sharpest weekly pullback since February 2016.”

But production remains sound regardless.

“Despite some plans to lower rig counts, U.S. crude production was still on track to rise from 11.9 million barrels per day (bpd) in 2022 to a new record high of 12.5 million bpd in 2023 and 12.7 million bpd in 2024, according to projections from the U.S. Energy Information Administration (EIA) in May,” reports Reuters. “The last record output was hit in 2019 at 12.3 million bpd.”

Gas production looks likely to grow, too. According to the Energy Information Administration (EIA), natural gas production in the United States is projected to increase from a record 98.13 billion cubic feet per day (bcfd) in 2022 to 101.09 bcfd in 2023 and further to 101.24 bcfd in 2024.

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  • A solar developed in Georgia got slapped with a hefty environmental infringement. “U.S. District Court Judge Clay D. Land issued a May 5 order ruling that Nashville-based Silicon Ranch and IEA are liable for more than $135 million in damages due to sediment erosion and lack of soil control,” reports PV Mag. “A Georgia jury has awarded Shaun and Amie Harris $135.5 million in damages to their property in Stewart County, Georgia, reportedly created from silt and sediment erosion from a 100 MW utility-scale solar project constructed by developer Silicon Ranch, engineering contractor Infrastructure and Energy Alternatives (IEA) and an IEA affiliate.”

  • Tesla messed up in China. “Tesla will recall more than 1.1 million of its electric vehicles sold in China, both domestically produced and imported into China, due to potential safety risks,” reports Oilprice.com. “The recall of 1,104,622 Teslas, which will begin on May 29, affects imported Model S, Model X, and Model 3, and China-made Model 3 and Model Y, the Chinese administration said about the recall plan Tesla’s local units had submitted with the regulator. The vehicles subject to the recall have issues that may raise the probability of drivers ‘mistakenly stepping on the accelerator pedal’ for an extended period, which could increase the risk of collision and pose a ‘safety hazard,’ according to the regulator’s statement.”

  • Oil spill: cleaned. “TC Energy Corp finished recovering oil from a rural Kansas creek where its Keystone Pipeline spilled 14,000 barrels of oil in December, the company said on Friday,” reports Reuters. “The pipeline operator expects to remain onsite until the third quarter of this year to finish restoring the Mill Creek shoreline, TC Energy said in a statement. ‘We continue progressing with restoration activities along the Mill Creek shoreline, and environmental monitoring is ongoing,’ it said. Keystone's spill into a Kansas creek was the biggest U.S. oil spill in nine years and prompted a 21-day shutdown of a portion of the 622,000 barrel-per-day pipeline, which ships crude from Alberta to U.S. refineries.”

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