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Welcome to Grid Brief! Here’s what we’re looking at today: nuclear helps ease Japanese dependence on LNG imports, a bi-partisan group of Senators have warned Department of Energy about its new transformer efficiency rules, wages for American oil workers has hit a new high, and more.

Nuclear Spares Japanese LNG Imports

Energy conservation and nuclear power have forced Japanese liquified natural gas imports to their lowest levels in 20 years.

“Deliveries declined to around 4 million tons in May, about a 30% drop on the same month a year ago and the least since 2002, according to ship-tracking and government data,” reports Bloomberg. “Japan’s gas storage is so well stocked that importers were offering to sell shipments last month.”

Last month, Japan’s nuclear power output bounced back after several reactors finalized maintenance and upgrades. Although ten reactors have restarted, but more than double that are still idled.

The energy crisis put the strain on the nation’s grid and drove power bills sky-high. Japan has also encouraged households and businesses to conserve energy since last year. Japanese power consumption hasn’t been this low since Covid.

Senators Warn DOE Over Transformer Efficiency Rule

Forty-seven Senators from both parties wrote a letter to the Department of Energy cautioning against pursuing its new efficiency standards for transformers.

“Such a standard could come at meaningful cost to grid reliability and national security,” the letter to Energy Secretary Jennifer Granholm reads.

Transformers are already in short supply and lead times have increased from eight to twelve weeks to three years between 2020 and 2022.

“We urge the Department to refrain from promulgating a final rule that will exacerbate transformer shortages,” the letter reads. The group wants DOE to “convene stakeholders across the supply chain to develop consensus based approach to setting new standards.”

Sixty members of the House of Representatives have also sent a letter to the DOE asking the agency to withdraw the rule. “There is no statutory requirement for DOE to issue an increase in efficiency standard. Despite this fact, DOE continues to push forward with a rulemaking that will only increase the energy efficiency of distribution transformers by a fraction of a percentage point,” reads the House letter. “The electric power industry is in no position to undertake this level of regulatory overhaul.”

“A senior DOE official said the agency understands the concern and has been working with the power sector for more than a year to address the issue,” reports Utility Dive. “A lack of investment in steel manufacturing, rising demand for transformers and labor shortages are contributing factors, the official said.”

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Wages for US Oil Workers Hits Record

US oil workers’ average pay jumped to $43/hr, the highest it has ever been.

“Average hourly earnings for front-line oil-and-gas workers rose 0.7% in April from the previous month to $43.28, according to a Labor Department report released Friday. Compared with a year ago, pay is up 12%,” reports Bloomberg. “The relative strength in shale employment data bucked an overall national trend in the economy that saw the jobless rate jump and paycheck growth ease.”

Shale’s ability to buck the national jobs trend reveals that the industry isn’t shedding workers as oil prices drop. Instead, it’s pursuing slow and steady growth and looking for more workers.

“Wages have gotten back to pre-COVID levels, but it’s nothing exorbitant,” Ezra Yacob, chief executive officer for shale giant EOG Resources Inc., said. “When you’re running a drilling rig and you expect a six-man crew and you have a four-man crew come up, there’s going to be less efficiencies there.”

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Conversation Starters

• Can fuel oil save the South African grid? “South Africa’s chronic 10-hours-per-day blackouts could finally have a solution that won’t sit well with energy transitioners—burning heavy fuel oil,” reports Oilprice.com. “South Africa’s Electricity Minister, Kgosientsho Ramokgopa, has announced that the country will start an emergency procurement program. The program will negotiate power purchase agreements, and will last for five years. Some of the power will come from natural gas from Turkey’s Karpowership through an existing agreement. At least 1,200 MW of the 2,000 MW needed will be sourced that way.”

• No LNG for this sacred New Mexican site. “Interior Secretary Deb Haaland on Friday ordered a 20-year moratorium on new oil and gas leasing within 10 miles of the Chaco Culture National Historical Park, protecting lands sacred to many Native American communities in New Mexico and northern Arizona,” reports E&E News. “The move, which still allows drilling near the park on existing federal leases, represents the culmination of a yearslong campaign to preserve ancient sites of cultural importance in the region by tribes, conservation groups and New Mexican politicians.”

• China goes big on carbon capture. “China Energy Investment Corporation, a state-owned electricity generator, has started up a carbon capture project at one of its thermal coal power plants which will be the biggest such carbon capture facility in Asia,” reports Oilprice.com. “The carbon capture, utilization, and storage (CCUS) facility at the Taizhou thermal coal power plant will have an annual capacity to store 500,000 tons of carbon dioxide (CO2), a report in state media outlet CCTV said on Friday. China is looking to increase the use of CCUS in its enormous fleet of coal-fired power plants, which continues to grow as power demand increases.”

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