Welcome to Grid Brief! Here’s what we’re looking at today: FERC and NERC report back on Winter Storm Elliot, Russia lifts is ban on low quality diesel exports, Uniper secures a long-term deal for American LNG, and more.

FERC and NERC on Winter Storm Elliott

The Federal Energy Regulatory Commission and the North American Electric Reliability Corp. have released their report on last year’s Christmas blackouts.

“A record-setting 90.5 GW, or 13% of the generating capacity in the Eastern Interconnection — the grid system covering two-thirds of the U.S. — failed to run or operated at reduced capacity during Winter Storm Elliott in December, Federal Energy Regulatory Commission and North American Electric Reliability Corp. staff said,” reports Utility Dive. “Gas-fired capacity accounted for 63% of the outages, followed by coal and lignite at 23%, oil at 4%, wind at 4%, and nuclear, solar and hydroelectric at 1% each, according to a staff presentation on a soon-to-be released report.”

Around 10 GW of gas-fired outages occurred when suppliers curtailed pipeline flows. Even 19 GW of black-start units—which are used to restart the grid after blackouts—saw outages (the vast majority of the units were gas units).

FERC commissioners called for the government to do more to harden the natural gas system against weather events.

“We need someone who is directly responsible for the reliability of our natural gas system and enforcing reliability standards for our natural gas system,” said FERC chairman Willie Phillips.

As the grid shifts to more just-in-time gas and more intermittent, non-dispatchable renewables, and as the markets lack any entity responsible for reliability, these problems will continue and worsen.

Russia Lifts Low Quality Diesel Ban

Russia has changed its fuel export ban to accommodate the export of low quality diesel.

“At the end of last week, Russia surprised the markets by announcing a temporary ban on exports of gasoline and diesel to stabilize fuel prices on the domestic market, ending weeks of speculation that authorities would limit exports in the face of soaring prices and shortages due to higher crude prices and weak Russian ruble,” reports Oilprice.com. “Fuel already accepted for export by Transneft and the Russian Railways before last week’s ban came into effect is also exempt from the restrictions, according to the Russian government.”

But the export ban still covers all types of gasoline and higher-quality diesel. While most European buyers have started looking to Turkey, Brazil and Saudi Arabia for fuel, a major supplier pulling out of the market is bound to make an impact. It’s unclear how long Russia can maintain the ban.

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Uniper Secures LNG Until 2030

Europe’s reliance on American LNG shows no sign of slowing as Uniper, a Germany utility, inks a long-range deal for more of the super-chilled fuel.

“The German utility recently negotiated a deal for US liquefied natural gas supply to the continent that ‘goes out to the very late 2030s,’ Peter Abdo, its chief commercial officer for LNG and global origination, said during an interview in London,” reports Bloomberg. “Beyond that timeframe, the signals are unclear.”

Odds are the continent will need American LNG well beyond 2030. “There will be a need for American energy,” a top EU energy official said recently.

Conversation Starters

• Canadian regulator approves route change for Trans Mountain. “The Canada Energy Regulator (CER) approved a route change request for the Trans Mountain oil pipeline expansion on Monday, clearing a major hurdle and avoiding months of delay for the Canadian government-owned project,” reports Reuters. “Trans Mountain Corp (TMC), the federal government corporation that is building the expansion, had sought a route deviation on a 1.3-kilometre (0.8 mile) section of pipeline near Kamloops, British Columbia, to avoid planned micro-tunneling construction that it said would be unfeasible.”

• Chevron prepares to drill in Venezuela. “As Chevron scrambles to recoup some $3 billion in losses over its Venezuela oil projects, the U.S. oil giant is now gearing up to launch a new drilling campaign that could add 65,000 barrels per day within a year,” reports Oilprice.com. “Chevron has joint ventures with Venezuela’s state-owned PDVSA, but further drilling operations have been on hold since sanctions were expanded in 2019 following questions about the legitimacy of 2018 elections in which Nicolas Maduro assumed the presidency.”

• The Biden administration will open offshore wind auctions on time next year. “The Biden administration will complete its ambitious offshore wind leasing schedule on time next year, the Interior Department told Reuters, despite delays to preparatory work for the auctions and sagging demand from the industry,” reports Reuters. “President Joe Biden’s White House is depending on rapid adoption of offshore wind to help decarbonize the U.S. power sector to fight climate change, with a goal to install 30 gigawatts by the end of this decade.”

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