Welcome to Grid Brief! Here’s what we’re looking at today: green groups go after California Gov. Gavin Newsom, China inks massive LNG deal with Qatar, and more.

Greens Go After Gavin

When the environmental movement rose up against the power industry in the 1960s and 1970s, it was responding to the highly centralized world of managerial industrialism. The movement wanted less energy as well as less managerial control. Wind and solar were not supposed to be massive industrial projects, but local power sources that harmonized communities with nature.

But now that climate rather than pollution or ecosystem degradation has become the major concern, the major environmental organizations have mutated into an ouroboroses, sinking their teeth into their own tails. The call for a clean energy system that runs on wind and solar makes enormous demands of land and resources. So, the groups are now fighting against the policies they also advocate for. And they’re alienating once loyal allies. Powerful ones, too.

Take California Governor Gavin Newsom. He has been a loyal environmental advocate, but now the Natural Resources Defense Council, the Sierra Club, and about a hundred other green groups are opposing his latest energy infrastructure package.

“I licked envelopes for these nonprofits as a kid. My father was on the board of the Sierra Club Legal Defense Fund for more than a decade,” Newsom told the New York Times. “This was my life. But this rigidity and ideological purity is really going to hurt progress. I did the climate bills last year, and these same groups were celebrating that. But that means nothing unless we can deliver. That was the what; this is the how.”

The fight is over—of course—permitting. The groups want Newsom to push his package through a regular session rather than speed it through a more streamlined process so that they can weaken it and take it apart. Any impact on the environment is untenable to them, whether it’s for a clean energy project or not. But California’s grid stands on shaky legs and the state’s climate goals are ambitious. Without a major overhaul in the building process for new energy projects, the outlook is not good.

There appears to be a bit of buyer’s remorse amongst Democratic leadership about working so tightly with these powerful NGOs in the wake of the Inflation Reduction Act. Everywhere the Democrats want to build new projects to achieve their climate goals, their environmental allies betray them.

“These delays are pervasive at every level of government — federal, state and local,” John Podesta, a senior adviser to President Biden on clean energy, said in a speech earlier this year. “We got so good at stopping projects that we forgot how to build things in America.”

Indeed.

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China Inks Another Massive LNG Deal With Qatar

China is making an absolutely enormous LNG deal with Qatar. The country wants 4 million tons per year for 27 years, which will help China lockdown supplies and Qatar with funding more energy projects.

China is sprinting to lock down the most LNG purchase agreements in the world, stabilizing its own supply and allowing it to sell off any excess to Europe and Asia. This will make China a substantial market intermediary.

“Firms based in China account for roughly 15% of all contracts that’ll begin delivering LNG supply through 2027,” Bloomberg reported in February. “That trend is set to increase as the companies seek to lock in more long-term agreements, which will effectively give their traders control over the fuel for decades.”

Meanwhile, Qatar wants to elbow out its competition, namely Australia and the US. “The world’s top exporter shocked the industry a few years ago by announcing a 60% boost in production through 2027,” Bloomberg reported in May.

Now Qatar finally found a big buyer in China, something it was struggling to secure. The world appears to be entering into a buyer’s market for LNG, with multiple countries ramping up their gas production to meet the new dynamics inaugurated by the Ukraine invasion.

Conversation Starters

• The Texas heatwave cometh. “The Texas power grid operator urged homes and businesses to conserve electricity on Tuesday evening to prevent power reserves from falling short as consumers crank up their air conditioners to escape the first heat wave of the summer season,” reports Reuters. “Power prices for Tuesday topped $2,500 per megawatt hour (MWh) in the state's day-ahead market on expectations that demand would reach record levels later in the day, according to the Electric Reliability Council of Texas (ERCOT). ERCOT operates the grid for more than 26 million customers representing about 90% of the state's power load.”

• A green group shook up the hydrogen debate. “One of the nation’s largest renewable trade groups unveiled revised recommendations Thursday on how “green” hydrogen emissions should be counted under the Inflation Reduction Act, highlighting the challenge facing the Biden administration as it prepares tax guidance that could determine the greenhouse gas footprint of the fuel,” reports E&E news. “The American Clean Power Association (ACP) is an influential voice in the hydrogen debate, considering its size and number of members with a potential stake in the industry’s future. In December, it submitted initial comments to the Treasury Department about coming guidance for accessing lucrative Inflation Reduction Act tax credits for clean hydrogen.mThe group’s revised plan Thursday made concessions to environmentalists on some issues but reignited disputes over others, while alienating nuclear and fuel cell advocates.”

• A big pipeline project moves ahead in the Midwest. “A final permit hearing to consider Summit Carbon Solutions’ proposed carbon dioxide pipeline will start two months earlier than initially expected, according to a procedural schedule set Friday by the Iowa Utilities Board,” reports Iowa Capital Dispatch. “The change came after a shake-up in leadership on the board. Former chairperson Geri Huser was adamant in March that the weekslong evidentiary hearing would start Oct. 23 to consider Summit’s roughly 680 miles of pipe that would carry the captured greenhouse gas from ethanol plants in mostly western and northern parts of the state. Instead the hearing will begin in August. The project is one of three pending pipeline proposals.”

Crom’s Blessing

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