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White House Pauses Louisiana LNG Decision // Australian Mining Takes a Beating

Welcome to Grid Brief! Here’s what we’re looking at today: the White House pauses on approving an LNG terminal in Louisiana, Australian mining feels the pain, and more.

White House Pauses Louisiana LNG Decision

America’s LNG export boom hit a major speed bump this week. The Biden administration has decided to pause on what would be the largest LNG export facility in the country, a move that looks to ripple throughout the industry.

“Venture Global LNG's Calcasieu Pass 2 (CP2) project is twice the size of its present CP plant, with an export capacity of 20 million metric tonnes per year,” reports Reuters.

According to reporting from the New York Times, the White House has ordered the Department of Energy to review LNG projects with extra climate criteria, which could delay an additional 16 LNG export projects.

In a hotly contested election year, the Biden administration may be kowtowing to its small, but well-heeled and powerful environmental wing.

“Putting a stop to expanded gas exports is one of the most important moves President Biden could make on addressing the climate crisis,” Ben Jealous, executive director of the Sierra Club, said in a statement. “It would mark a bold and historic decision and a major win for communities and advocates that have long spoken out about the dangers of LNG.”

But stymying America’s LNG exports may also cede the market share to other nations, which would obviate the global environmental impact of blocking domestic LNG projects.

“It appears the administration may be putting a moratorium on the entire US LNG industry,” Shaylyn Hynes, spokeswoman for Venture Global, said in a statement. “Such an action would shock the global energy market, having the impact of an economic sanction, and send a devastating signal to our allies that they can no longer rely on the United States.”

The oil and gas industry has begun a lobbying blitz to reverse the Biden administration’s change of tack, and, according to reporting from Bloomberg, is calling on European leaders to be more vocal about their concerns regarding constrained LNG supplies. However, Goldman Sachs says that these delays from longer approval processes won’t have an impact on global supply balances for three to four years.

Australian Mining Takes a Beating

The Greenbushes mine in Western Australia

Australian nickel and lithium mining are taking a hit thanks to price drops.

Australia’s BHP, the world’s biggest listed miner of nickel, said last week that it is reevaluating its nickel business. “Analysts said it may need to write down its $1.2 billion West Musgrave project and could potentially delay it. It will provide more detail at its half year earnings on Feb 20.,” reports Reuters.

As for lithium, Australia’s Core Lithium looks to “cut roles” across the company and plans to suspend operations near Darwin in the northern part of the country. Another lithium mining company, Pilbara Minerals, announced that it is not likely to pay a dividend in the first half of this year.

“The company made the announcement in its quarterly report, along with plans to reduce its annual exploration spend. That cut could be as much as A$100 million ($66 million),” reports Bloomberg.

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Conversation Starters

  • After its hydrogen hopes failed, Germany struggles to reach an agreement on natural gas power. “Closely-watched German government talks on funding the construction of gas-fired power plants have failed to produce a deal so far, with the level of public financing the main sticking point, sources told Reuters on Wednesday,” reports Reuters. “Chancellor Olaf Scholz, Finance Minister Christian Lindner and Economy Minister Robert Habeck met this week to discuss the plans, which are part of Germany's attempts to keep the lights on while phasing out nuclear and coal.”

  • Japan’s LNG imports slump. “Liquefied natural gas imports in Japan, one of the world’s top LNG buyers, slumped in 2023 to the lowest level in 14 years, after falling by 8% compared to 2022, official Japanese data showed on Wednesday,” reports Oilprice.com. “Last year, Japan imported 66.15 million metric tons of LNG, down by 8.1% year-on-year and the lowest import volumes since 2009, according to provisional data from the Japanese Ministry of Finance.”

  • Bipartisan group of Senators move to block DOE transformer efficiency rules. “A bipartisan group of 12 senators on Jan. 18 introduced legislation to address the shortage in distribution transformers and block a proposed U.S. Department of Energy rule that aims to tighten energy efficiency standards for the essential pieces of grid equipment,” reports Utility Dive. “DOE proposed stricter efficiency standards for transformers in 2022, but utilities have warned the new requirements could lead to higher costs and delays to electrification efforts. The proposed rule would mean changes to transformers’ construction, requiring an overhaul of portions of the U.S. steel industry.”

Crom’s Blessing

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