Welcome to Grid Brief! Here’s what we’re looking at today: Norway’s surprise big hydrocarbon discovery, a report from Columbia reveals ESG stifles nuclear financing, labor shortages stalk America’s LNG export industry, and more.

Norway’s Big Hydrocarbon Discovery

Norway has just made its biggest hydrocarbon discovery in a decade. Located in the Carmen prospect in the Norwegian North Sea, the site’s expected gross recoverable resources sits in the range of 120-230 million barrels of oil equivalent, according to data from DNO ASA.

“Norway is the gift that keeps on giving. Carmen proves there are important discoveries still to be made and Norway’s oldest oil company, DNO, will be part of this next chapter of the country’s oil and gas story,” said DNO’s Executive Chairman Bijan Mossavar-Rahmani.

DNO’s good news comes after Norway’s Aker BP made its own large discovery in the Yggdrasil area of the North Sea last Thursday. The site is estimated to provide a gross recoverable volume of 40 million-90 million barrels of oil equivalent—much more than initially expected.

“Norway has become the largest supplier of natural gas to Europe after the continent cut ties with Russia following its war in Ukraine,” reports Oilprice.com. “Norway's pipeline gas exports to continental Europe have been robust in the current year, with flows averaging 313 million cu m/d.”

The nation’s recent discoveries are liable to make that a durable trend.

ESG Stifles Nuclear Financing

Most serious decarbonization models rely on nuclear energy as part of the solution. But, according to a recent report from the Center on Global Energy Policy at Columbia, there’s a crucial disconnect: while the plans include nuclear, most ESG financial taxonomy excludes it.

“Taxonomy matters because sustainable investing assets under management were estimated to have reached $35 trillion at the end of 2021 and are expected to grow to $50 trillion by 2025. Due to the tremendous growth and continued momentum projected for sustainable investment, nuclear energy would likely benefit from being able to access this pool of capital,” reads the report. “Apart from investments in new nuclear projects, capital will also be needed to keep the existing fleet of reactors in operation, including for safety equipment upgrades, new advanced nuclear fuels with greater safety margins, and replacing/refurbishing equipment as it ages.”

No major bank explicitly includes nuclear as part of its sustainability bond framework. In fact, most banks exclude it (57%) with the rest remaining silent (40%).

This is a major problem. Much of the world is pursuing decarbonization without including the most historically effective tool for lowering electricity sector emissions. The report recommends several solutions:

• Climate taxonomies should engage with utilities to understand reliability metrics to better achieve carbon neutrality while maintaining affordability and reliability.

• Discussions with utilities and experts from different regions can shed light on the role of firm low-carbon options, including nuclear power.

• Decarbonization beyond the power sector requires consideration of alternatives for high-temperature heat, where nuclear energy may play a significant role.

• Environmental groups can prioritize phasing out highly impactful energy sources like coal, oil, and gas, which have negative environmental and health effects rather than safe, clean, nuclear.

• Remaining neutral on nuclear power's inclusion in climate finance taxonomies can alleviate concerns of greenwashing for banks and investment firms.

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Labor Shortages Could Hurt US LNG

The North American liquefied natural gas (LNG) export projects currently underway are facing staffing challenges: they require a significant number of workers. Eight projects in progress aim to add a total capacity of 86 million tonnes per annum (MTPA) of LNG. While these projects have created thousands of construction jobs, they now face the task of recruiting and training operators for the upcoming operational phase.

“Paul Marsden, head of Bechtel Corp's Energy global business unit, which has built 30% of the world's LNG plants in the last 20 years, said industry, labor and education must work together to provide the training and workers to staff all the projects,” reports Reuters.

"Labor has grown as an inflationary concern for everyone in the industry. We need to actively forecast and manage labor availability and supply chain like never before," Marsden said in an interview via email last week.

Bechtel is currently involved in the development of projects with approximately 27 MTPA of new capacity. The company plans to grow its workforce from over 3,000 to nearly 20,000 professionals at the peak of construction.

Cheniere Energy—another major player in the LNG industry and one of Bechtel’s largest clients—is strategically scheduling its construction to retain workers by transitioning them from one project to the next.

To handle the labor shortage, companies are also preordering materials to avoid inflation, training workers using virtual simulations or through partnerships with local schools, and investing in local workforce development.

Conversation Starters

• A big battery project is coming to Minnesota. “Minnesota regulators on Thursday approved a 10-MW/1,000-MWh iron-air battery system to be built by Form Energy for Xcel Energy’s Minnesota utility, Northern States Power, or NSP,” reports Utility Dive. “NSP expects the long-duration energy storage pilot project will be operating by the end of 2025 and will be paired with up to 710 MW of solar at the site of a coal-fired power plant that is being retired. The utility expects the project will cost residential customers about 30 cents per month over the project’s 10-year expected life span. The Minnesota Public Utilities Commission imposed a cost cap on the project.”

• Permitting reform is back on the docket as the US Congress returns. “Despite the recent debt ceiling accord, which included a rewrite to permitting laws, lawmakers have insisted they are still working on an even bigger deal. Some informal bipartisan talks have already begun, lawmakers say. But a breakthrough remains far from reach. Senate leaders say the matter remains a top priority. On Sunday, Senate Majority Leader Chuck Schumer (D-N.Y.) told his colleagues in a letter that efforts to ‘unlock permitting reform’ would be a focus ahead of the August recess,” reports E&E news. “When it comes to permitting, loosely formed groups are continuing to talk after the debt limit deal yielded permitting wins for Republicans and mostly nothing for Democrats. A Democratic aide familiar with the workings of one of the groups, who was granted anonymity to speak candidly, said the idea is to take a step forward this month. Still, the aide admitted that the details of a potential proposal remain murky.”

• Slovenia and Croatia are looking into underground nuclear waste storage. “The radioactive waste management organisations of Slovenia and Croatia have contracted Deep Isolation to deliver a cost study on potential borehole disposal of used fuel and high-level radioactive wastes from the Krško nuclear power plant,” reports World Nuclear News. “The study will examine ‘the costs associated with the disposal of the two countries’ shared inventory of pressurised water reactor spent fuel assemblies in either generic crystalline basement geologies or shale geologies such as at the Krško power plant’. Cost comparisons will be provided for vertical and horizontal boreholes.”

Crom’s Blessing

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