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Energy

U.S. halt on LNG exports presents new opportunity for Canada

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From the Fraser Institute

By Julio Mejía and Elmira Aliakbari

The Biden administration recently paused the approval of permits for liquefied natural gas (LNG) exports, which will force U.S. allies to explore alternative sources of LNG, opening the door for Canada. In fact, if Canadian policymakers remove certain regulatory hurdles, they can help position Canada as a leading global provider of clean and reliable natural gas while also helping create jobs and prosperity in British Columbia, Alberta and beyond.

Following Putin’s invasion of Ukraine, President Biden committed to supplying steady LNG to the European Union, aiming to reduce reliance on Russian gas. By 2023, the United States had become the world’s top LNG exporter, with several European countries importing more than half of America’s LNG exports. However, President Biden also pledged to transition the U.S. away from fossil fuels so he’s paused LNG exports to appease his environmentalist constituency ahead of the upcoming U.S. presidential election.

But this pause comes at a crucial time for European countries grappling with energy shortages and rising prices. Last year, energy-intensive industries in Europe scaled back or halted production amid soaring energy prices, and Germany, Europe’s largest economy, narrowly avoided a recession caused by energy supply shortages. To keep the lights on, European countries have been forced to revert to coal-fired power plants, an energy source that contributes more CO2 emissions than natural gas.

Following the U.S. decision, European and Asian countries (including China) are exploring alternative LNG suppliers, again creating a potential void that Canada could fill. Japan and Germany have already turned to Canada.

Canada’s vast natural resources hold the potential to make a significant positive impact on global energy security, reliability, and emissions reduction by reducing reliance on coal. Despite possessing “the most prolific and lower-cost North American gas resources,” as emphasized by McKinsey’s recent report, development in Canada has encountered challenges largely due to government regulatory barriers. Presently, Canada lacks any operational LNG export terminals, unlike the U.S., which has 27 such facilities. The LNG Canada development in B.C. is slated to become Canada’s first operational facility, expected to begin exporting by 2025.

The absence of LNG export infrastructure in Canada has led domestic natural gas producers to depend on U.S. LNG facilities for exporting. However, with the recent halt on approving new LNG projects south of the border, there’s an urgent need for Canada to establish its own infrastructure if we’re going to seize this opportunity to be a global LNG supplier.

Forecasts indicate steady and growing global demand for LNG. McKinsey’s recent report anticipates an annual increase in global LNG demand of 1.5 per cent to 3 per cent to 2035. And according to the latest report by the International Energy Agency (IEA), limited new LNG production means supply will remain tight.

Despite promising opportunities, various government initiatives including CleanBC (the B.C. government’s plan to reduce greenhouse gas emissions,) the Trudeau government’s emissions caps on the oil and gas sector, and federal Bill C-69 (which added more red tape and complexity to the assessment process for major energy projects) have created uncertainty and deterred, if not outright prohibited, investment in the sector.

Canada has an opportunity to provide clean and reliable natural gas to our allies, help improve the world’s energy security and reduce global greenhouse gas emissions. The federal and provincial governments must remove regulatory barriers to allow for the needed infrastructure and investment in the LNG sector, which will also provide jobs and prosperity here at home.

Energy

Fresh Off Their Major Victory On Gas Export Terminals, Enviros Set Sights On New Target: Oil Exports

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From the Daily Caller News Foundation

By NICK POPE

 

Months after President Joe Biden handed environmentalists a major win by pausing new liquefied natural gas (LNG) export terminals, activist groups are beginning to turn their attention to deepwater oil export hubs.

A coalition of 19 climate activist organizations — including the Sierra Club, Earthjustice and the Sunrise Movement’s New Orleans chapter — wrote a Thursday letter to Biden, Transportation Secretary Pete Buttigieg and Maritime Administration Administrator Adm. Ann Phillips urging the administration to halt approvals of proposed deepwater crude oil export facilities. The letter signals that the environmental lobby is turning its attention to a new target after the White House opted to pause new LNG export hub approvals in January following a considerable activist campaign.

“The undersigned urge the White House and Department of Transportation (DOT) to halt and reevaluate its licensing review of proposed deepwater crude oil export facilities to update and ensure the validity of the agency’s “national interest” determinations and related Deepwater Port Act (DWPA) project review,” the activist groups wrote. “The licensing of massive deepwater crude oil exports leads to disastrous climate-disrupting pollution and environmental injustices and would lock in decades of fossil fuel dependence that undercut the pathway to a clean energy economy.”

Oil Export Terminals Letter by Nick Pope on Scribd

“At minimum, we ask the Administration to update its outdated analysis under the DWPA and National Environmental Policy Act (NEPA) to address the harms generated by expansive oil exports on the climate, as well as consequences for environmental justice communities along the Gulf Coast, and for the national interest in energy sufficiency,” they continued.

American oil exports are “key” to global supply, especially in the wake of Russia’s invasion of Ukraine and the resulting changes in global energy markets, according to Bloomberg News. The U.S. became a net oil exporter in 2020 for the first time since 1949, according to the U.S. Energy Information Administration, and global oil demand is expected to grow through at least 2028, according to the International Energy Agency.

“It’s hard to call yourself a Climate President when more fossil fuels are being produced and exported by the U.S. than ever before,” James Hiatt, founder of For a Better Bayou, one of the letter’s signatories, said in a statement. “Approving massive oil export terminals in the Gulf of Mexico not only exacerbates our deadly fossil fuel addiction, but also blatantly disregards the health and wellbeing of environmental justice communities in the region. This administration is acting less like a beacon of hope and more like an enabler of dirty energy. It is time for a course correction towards real climate action.”

Biden handed environmental activists a huge victory when he paused approvals for new LNG export terminals in January, instructing his administration to closely examine the climate impacts of proposed facilities alongside economic and security considerations. The LNG pause stands as one of Biden’s biggest decisions on climate through his first term, and activists applauded the move while elected Republicans and the oil and gas industry have strongly opposed it.

Well-funded environmental organizations and young voters figure to be key bastions of support for Biden in the 2024 election cycle as he attempts to secure a second term in office and prevent the return of former President Donald Trump. While the Biden administration has spent more than $1 trillion and pushed stringent regulations to advance its sweeping climate agenda, most voters remain most concerned about the economy, inflation and immigration, with a much smaller share identifying climate change as the top issue facing the country, according to recent polling data.

Neither the White House nor the DOT responded immediately to requests for comment.

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Energy

U.S. EPA Unveils Carbon Dioxide Regulations That Could End Coal and Natural Gas Power Generation

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From Heartland Daily News

By Tim Benson Tim Benson

The U.S. Environmental Protection Agency (EPA) announced new regulations on April 25 that would force coal-fired power plants to reduce or capture 90 percent of their carbon dioxide emissions by 2039, one year earlier than in the rule originally proposed in May 2023.

Other newly announced coal regulations include a final rule “strengthening and updating the Mercury and Air Toxics Standards (MATS) for coal-fired power plants, tightening the emissions standard for toxic metals by 67 percent, finalizing a 70 percent reduction in the emissions standard for mercury from existing lignite-fired sources,” and another rule to “reduce pollutants discharged through wastewater from coal-fired power plants by more than 660 million pounds per year.” The EPA also issued an additional rule to require the safe management of coal ash in locations not previously covered by federal regulations.

“Today, EPA is proud to make good on the Biden-Harris administration’s vision to tackle climate change and to protect all communities from pollution in our air, water, and in our neighborhoods,” said EPA Administrator Michael S. Regan. “By developing these standards in a clear, transparent, inclusive manner, EPA is cutting pollution while ensuring that power companies can make smart investments and continue to deliver reliable electricity for all Americans.”

EPA estimates its new regulations will reduce carbon dioxide emissions by 1.38 billion metric tons by 2047 and create $370 billion in “climate and public health net benefits” over the next twenty years.

Coal in a Regulatory Decline

Partially due to increasingly stringent regulations, electricity generation from coal has fallen from 52 percent of the nation’s total output in the 1990s to just 16.2 percent in 2023. Critics of the new regulations, including Jason Isaac, CEO of the American Energy Institute, argue that EPA’s new rules would make it impossible to open new coal plants and will effectively force those already online to shut down operations.

“These rules are a direct attack on an important and necessary source of American energy—one of our most affordable, reliable resources, and one that is essential here and growing in use around the world,” said Isaac. “The ignorance of this administration is negligent at best, criminal at worst, relegating the least among us to more expensive energy, or even none at all, as millions of Americans are finding out by having their electricity disconnected.

“On one hand they push to electrify everything and then with the other leave us with unreliable electricity,” Isaac said. “The Biden administration is hell bent on destroying coal and reaching new levels of recklessness.”

‘De Facto Ban’ on Coal

The new regulations almost assuredly will face legal challenges from the coal industry and others, says Steve Milloy, founder of JunkScience.com.

“Another unconstitutional EPA rule from the Biden regime that will be DOA at [the Supreme Court] but not until much harm has been caused,” said Milloy. “Congress has not authorized EPA to issue regulations that operate as a de facto ban on coal plants, yet that’s what this regulation amounts to because it mandates emissions control technology (i.e., carbon capture and sequestration) which does not, and will never, exist for coal plants.”

EPA, by contrast, says carbon capture and sequestration (CCS) is the “best system of emission reduction for the longest-running existing coal units” and a “cost-reasonable emission control technology that can be applied directly to power plants and can reduce 90 percent of carbon dioxide emissions from the plants.”

“The requirement for imaginary technology violates Clean Air Act notions of only requiring the best available and adequately tested technology,” Milloy said. “The de facto ban violates the 2022 [Supreme Court] decision in West Virginia v. EPA, which established the major questions doctrine, under which agencies cannot undertake significant new actions, like banning coal plants, without authorization from Congress.”

Natural Gas Targeted, Too

Coal plants were not the only target of new EPA regulations, as natural gas power plants are also now required to eliminate or capture 90 percent of their carbon dioxide emissions by 2032, three years earlier than called for when the draft rule was originally proposed in 2023.

The EPA is acting as if it has absolute power unconstrained by the law and prior court rulings, Darren Bakst, director of the Competitive Enterprise Institute’s Center on Energy & Environment, says in a press release.

“The [EPA] absurdly thinks its authority to regulate means it has the authority to shut down businesses,” said Bakst. “Establishing new regulations for power plants does not mean the agency can effectively force them out of business.

“This is Clean Power Plan Part II, but like with many sequels, it is worse,” Bakst said.

Tim Benson ([email protected]) is a senior policy analyst with Heartland Impact.

For more on the Biden administrations power regulations, click here.

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