Review sees risk of halt to new gas hookups in New York City, Long Island

This week, Politico featured a piece by Marie J. French covering the obstacles to building new gas infrastructure and what they mean for regions like New York City and Long Island.

New York state’s utility regulator directed an independent review of National Grid’s plan to close the predicted gap between gas supply and demand after National Grid halted hookups when the state blocked a pipeline to supply the region. French conveyed the reports findings: “The report found Grid’s forecast for gas demand reasonable and highlighted major risks for the company’s plans to meet it. There are major trade-offs around how much risk of emergency curtailments or moratoriums on new hookups regulators and the public are willing to tolerate versus the cost of proposed investments.”

So what does this mean? As long as the demand for natural gas remains steadily increasing as it is now, there will be a crucial need for reliable, affordable resources. While decarbonization is a priority of New York, this is not feasible in the short-term with the infrastructure and demand in play. National Grid’s spokesperson, Karen Young, said in a statement:

“An extreme event that results in turning off gas supply has the potential to create a serious public safety situation in instances of severe cold,” the report states. “Given that gas is predominantly used for heating and cooking, the ramifications of a prolonged outage on human health and safety can be substantially more dangerous than an equivalent electric outage.”

A strong energy infrastructure network is key to a resilient grid and low costs for consumers. The U.S. and individual states should foster a policy and regulatory environment that welcomes investment in infrastructure.  

Energy Prices in Europe Hit Records After Wind Stops Blowing

This week, The Wall Street Journal reported on the surge in Europe’s natural gas and electricity markets after the wind in the stormy North Sea stopped blowing.

In recent weeks, there has been a sudden decrease in wind-driven electricity production off of the U.K.’s shores due to less than ideal weather circumstances. In the wake of this downturn, gas and coal-fired electricity plants were called in to close the gap that wind’s shortfall created. Coupled with this demand, the recovering pandemic boost, and lack of stored fuel, natural gas prices hit all-time highs.

This detrimental event of energy scarcity hit hardest in the U.K. because of how heavily the nation depends on wind energy. The need for infrastructure to provide reliable, affordable energy is on full display. Infrastructure feats like underground, natural gas pipelines could have deterred this crisis from ever coming up. However, a good part of Europe, especially the U.K., now finds itself in a vulnerable, desperate position. This shortcomings of renewable energy show that our current technologies and systems do not have the capacity to abandon traditional fuels. Very soon, the United States could be in the same position as the U.K. if officials stray from commonsense policies and regulations. The abundance of natural gas and crude in North America, paired with investment in new energy infrastructure, can help fuel the economy and support American energy security and national security interests.

Dakota Access Pipeline Brings Power To The People

This week, Inside Sources featured a piece by Ben Lieberman of the Competitive Enterprise Institute, drawing attention to the true impact of largescale energy infrastructure projects the Dakota Access Pipeline. Lieberman highlights the widespread community support when a new pipeline creates much-needed job opportunities, tax revenues, and affordable energy for its residents and local economy.

Lieberman writes: “It is worth noting that the local support for energy in such places is often non-partisan, as Democrats in states like West Virginia, Louisiana, and Alaska frequently join Republicans in support of the job-creating projects that extract energy and put it into the stream of commerce.”

To provide evidence of democratic support for energy projects, Lieberman describes the most targeted of all: the Keystone XL. Remaining unknown to most, the majority of elected officials– the ones that the people in the path of the pipeline actually choose to represent them– are Keystone XL supporters.

In the same way, this communal support stands true for DAPL. Since 2017, DAPL has safely carried North Dakota oil through South Dakota, Iowa, and into the existing pipeline network and refineries in Illinois. Found in a recent nationwide poll sponsored by the GAIN Coalition, nearly 80% of Americans believe that the U.S. should not shut down existing pipelines that have been in safe operation. Moreover, 73% of Native Americans in North Dakota believe that DAPL should not be shut down. Pretty contradictory to what the activists are alleging, isn’t it?  

Becoming a stronghold of these states’ energy supply, DAPL provides an immense amount of jobs and heaping tax revenues to these states and local communities. A recent analysis in Bloomberg Law estimated that up to 7,400 jobs and $900 million dollars would vanish if DAPL did.

Strong energy infrastructure feats like DAPL reduce the need to transport oil on our rails and roads, which are less safe, less efficient, and pose a greater risk to the environment. The locals high-energy producing states and its communities are well-aware of this fact and know that modern pipelines like DAPL are the greatest method to win both environmentally and economically.

Natural Gas Supply Challenges and Increasing Prices Suggest an Expensive Winter

Fox Business contributor and senior energy analyst Phil Flynn recently reported natural gas futures are reaching a seven-year high and supply is dwindling, which means Americans could see the highest heating bills they’ve seen in years this winter. Fox Business explains the supply challenges come as a result of “a slow rebound in production from the hurricane, globally tight supplies, and bad energy policy,” noting:

Hurricane Ida not only hit 90% of natural gas output but also did major damage to key onshore staging areas and because of that, it is taking much longer to restore natural gas production than ever. Over 78% of the Gulf of Mexico’s Natural gas production remains offline and there is no clear timeline as to when they can get things back to normal.  The pace of recovery, in just the natural gas side of the equation, is one of the slowest recoveries in history, worse than Hurricane Katrina back in 2005. 

Natural gas has long been recognized as an affordable and abundant energy source key to also lowering carbon emissions, especially from the power generation sector. It also is responsible for heating millions of homes across the country, as Fox Business notes:

Natural gas is one of the preferred sources of energy in this country not only for electricity and factories but mainly as a heating source for people’s homes. Over 50% of U.S. homes are heated by natural gas and even those that use electric heat pay for natural gas price increases through the backdoor as 38% of total U.S. natural gas consumption goes into providing electricity. 

While the U.S. in recent years has been less reliant on the Gulf of Mexico for gas production due to fracking and shale gas revolution in states like Texas and Pennsylvania, the Biden administration’s agenda could create new hurdles:

…the anti-drilling campaign by the Biden administration and the desire to push more natural gas production offshore created a situation where U.S. production is stagnant as opposed to growing. Natural gas production fell to 91.7 billion cubic feet in the first half of this year.  As a result, natural gas future prices have risen 94% since President Biden was inaugurated. That is the biggest surge in natural gas prices going back to the year 2000.

Flynn notes that we are now increasing our reliance on the Gulf for gas once again, leaving us more economically vulnerable. Fracking, on the other hand, occurs on land is typically much less impact by weather such as hurricanes.

Now more than ever, lawmakers and regulators must prioritize commonsense policy that strengthens the American economy through energy and infrastructure development.

Is North Dakota’s Oil Industry Finally Bouncing Back?

This week, reported on North Dakota’s growing energy industry. Following a year and a half of fighting the pandemic’s repercussions, Bradstock speculates the state’s oil industry is bouncing back, with the potential to expand its energy output over the next decade.

As tradition goes, North Dakota’s economy has always been bolstered by the success of the oil and gas industry. Infrastructure like schools and housing have grown from and around the oil & gas hubs of the state. OilPrice reports:

“North Dakota has experienced significant development in recent years, largely due to the advancement of the oil industry in the west of the state. As well as basic local level infrastructure, the state has also seen the construction of hotels, restaurants, and a new airport, with state revenues of $12 billion coming directly from oil. The state’s oil industry also supports around 35,000 direct workers and over 65,000 indirect jobs. As the second-largest oil-producing state in the U.S., North Dakota shifts 1.2 million barrels of oil per day to the U.S. market through North and South Dakota, Iowa and Illinois, in its Dakota Access Pipeline.”

However, as every sector across the globe took a punch during the pandemic, estimates suggest that around 10,000 people lost their jobs across North Dakota’s biggest oil-producing counties last year.  Thankfully, oil prices have started to rise again and many of the recently-unemployed, skilled workers are regaining their positions. OilPrice reports:

“North Dakota’s oil production appears stable at present, with an average output of 1.1. million bpd in May and June. While it has not yet reached its pre-pandemic production peak of 1.5 bpd, renewed interest in the state’s energy leaves huge potential for untapped reserves should Biden decide to support U.S. oil, as demand and prices continue to rise.”

GAIN Spokesman in Oilman Magazine: Foreign Countries Given the Green Light in Oil Production, U.S. Held Back

The Oilman Magazine recently published a column from GAIN spokesman Craig Stevens regarding President Biden’s call on OPEC last month to increase oil production. The President’s plea comes in light of the COVID-19 pandemic as travel and the economy continues to recover. The official White House statement reads, “President Biden has made clear that he wants Americans to have access to affordable and reliable energy, including at the pump.”

While we appreciate the President’s concern about access affordable energy, the request raised eyebrows after the administration has promoted a series of policies that hinder critical American energy development and infrastructure investment that would bolster our domestic energy capabilities and national security interests. Stevens writes:

President Biden’s administration has canceled major energy infrastructure projects, suppressed the oil and gas industry through stifling regulation, and made promises to eliminate the cornerstones of American energy without any realistic replacement. When the U.S. and Canada have ample natural energy reserves, developing our own resources seems a better policy than begging the Middle Eastern oil cartel.

How then, do we reconcile this with the fact that Keystone XL was shut down within days of President Biden taking office? (And imagine, had the Obama Biden Administration not denied – for purely political motivations – the cross-border permit for Keystone a decade ago, the line could be providing energy to the markets already.) Or his administration’s policies that limit the responsible development of our natural resources on federal lands? If reliable, affordable energy is the goal, why are the most effective, safe and consistent elements of energy production and transportation being eradicated here in the U.S.? Sure, we can import oil and natural gas from foreign countries, but this comes with a price. We offer up our energy independence to our adversaries, who gladly hoard it.

With reliable, affordable energy in the crosshairs, we need to shift our national focus. Instead of urging producers overseas to produce and ship more energy, policymakers must encourage increased energy development here at home and bolster domestic energy infrastructure that has the capacity to supply the consistent, cost-effective resources we critically need. Among others, infrastructure assets like the Dakota Access Pipeline; Line 3 and Line 5 in Minnesota and Michigan; Mountain Valley and Atlantic Coast pipelines are four and a half times safer than transporting oil by train or truck and would support U.S. energy independence and economic and national security.

Unlike many of the challenges President Biden faces, ensuring U.S. energy availability is easy to solve. Allow the industry to safely develop and transport North America’s vast energy resources, instead of hoping that foreign nation-states will bail us out.

Biden Favors Russian Energy in Meeting with Ukraine

Following our blog from Monday (8/30), President Biden and Ukrainian President Volodymyr Zelensky met on Wednesday (9/1) to discuss the countries’ relations and high tensions regarding Russian actions. 

President Biden claimed early Wednesday morning on Twitter that the meeting would “reaffirm America’s commitment to Ukraine’s sovereignty, territorial integrity, and Euro-Atlantic aspirations.”

However, President Biden’s position on Russia’s Nord Stream 2 does not suggest so. Ukraine has been frustrated with the Biden administration’s continued support of Russian’s tyrannical energy takeover. Nord Stream 2 places Europe, and Ukraine especially, in an extremely vulnerable, energy-dependent position. 

Following the meeting on Wednesday, Texas Sen. Ted Cruz stated in a press release: “The reports from today’s meeting between President Biden and President Zelensky are disheartening. The Biden-Harris administration remains committed to allowing Vladimir Putin to completely his Nord Stream 2 pipeline. The decision is catastrophic on its own terms, a missed opportunity to begin rebuilding America credibility, and a violation of mandates passed into law by congress to impose sanctions on the project.” 

Sen. Cruz continued on, “Solar panels aren’t going to deter Russian aggression. That requires resolute American action aimed at ensuring our allies’ energy security, integrity, and infrastructure, all of which are prerequisites to their— and ultimately our own— national security.” 

EIA: Shale natural gas production in the Appalachian Basin sets records in first half of 2021

The U.S. Energy Information Administration (EIA) recently reported dry natural gas production from the Marcellus and Utica shale formations, which make up the Appalachian Basin, set record highs in the first half of this year. The EIA reports, “Production in the region reached 32.5 billion cubic feet per day (Bcf/d) in December 2020, and it averaged 31.9 Bcf/d during the first half of 2021, the highest average for a six-month period since production began in 2008.”

The Appalachian Basin accounted for more than one-third of all US dry natural gas production in the first half of 2021, and on its own, would be the third-largest natural gas producer in the world behind Russia and the rest of the US.

The EIA also noted increased investment in pipeline infrastructure has been key to supporting this growth:

Record-high dry natural gas production in the first half of 2021 was made possible by growth in pipeline takeaway capacity that allows natural gas produced in the Appalachian Basin to reach other demand markets, especially in the Midwest. From 2008 to 2020, total pipeline takeaway capacity from the Northeast increased from 4.5 Bcf/d to 24.5 Bcf/d, alleviating some congestion and supporting higher wholesale natural gas prices in the region. Most of the increase in takeaway capacity happened between 2014 and 2020, when pipeline capacity increased by 16.5 Bcf/d, much of which was directed to the Midwest.

This record growth is key to strengthening the American economy and its energy security and national security interests. Policymakers should capitalize on this momentum and continue to support policies that encourage development of our energy resources and welcome investment in energy infrastructure.

It’s Now or Never. Biden Must Stop Putin’s Beloved Pipeline

Yesterday, NY Times featured a piece from freelance journalist Mark Temnycky regarding President Biden’s meeting with the Ukrainian President Volodymyr Zelensky today (Tuesday, August 31). Temnycky writes that due to the threatened security of Europe, and Ukraine especially, Zelensky must convince President Biden to walk back his support of Nord Stream 2.

Right after assuming position in the White House, President Biden did two things: expressed support for Russia’s Nord Stream 2 and thwarted America’s own Keystone XL. Biden’s move to allow Nord Stream’s completion was not looked upon highly by many of our European allies who fiercely oppose the project.

When complete, Nord Stream 2 will give Russia the ability to destabilize Europe’s security situation— especially that of Ukraine and Poland. Nord Stream 2 will give Russia a direct route to the heart of Europe, further increasing Europe’s dependence on Russia. If relations were to turn sour, Russia could turn off the flow of gas to Europe, potentially leaving millions of Europeans without critical resources. 

All in all, Temnycky highlights the concerns of being energy dependent on Russia in regards to foreign relations. It looks like the Biden Administration isn’t just working against America’s energy independence, but it’s also working against Ukraine’s, Poland’s, and all of Europe’s. If the current administration’s energy policies keep going in this same debilitating direction, we’ll all be dependent on foreign nations for energy imports here soon.

Hurricane Ida’s Impact on U.S. Energy Industry & Fuel Prices

CNN Business reported more than 95% of the Gulf of Mexico’s oil production facilities have been shut down as of Sunday due to Hurricane Ida, indicating the massive storm is having a significant impact on energy supply.

CNN Business noted:

Six refineries in the New Orleans area — including PBF, Phillips, Shell, Marathon and two Valero refineries — are shut down right now, Andy Lipow, president of Lipow Oil Associates, a Houston-based consulting firm, told CNN Business. “It’s now a waiting game to assess whatever wind and flooding damage will be caused as the hurricane passes through the area.”

The location of Hurricane Ida’s landfall is “one of the worst possible for the oil industry” and it could impact the major pipelines that carry fuel from the Gulf Coast to the East Coast markets, Lipow said. The shuttered six refineries “account for about 1.7 million barrels per day of refinery capacity, representing 9% of the nations total,” he added.

The other three refineries in the area — Exxon, Placid and Kratz Springs — are in the Baton Rouge area. “They appear to be operating at reduced levels,” Lipow said, adding that those three refineries account for about 700,000 barrels per day, roughly 3.5% of US daily consumption.

The Colonial Pipeline also has temporarily halted fuel deliveries from Houston to Greensboro, NC, due to Ida. The pipeline, which was the subject of an unprecedented cyber attack earlier this year that led to fuel supply problems and prices to spike, is the largest petroleum products pipeline in the U.S. Colonial expects to resume full service once the company assesses the impact of Hurricane Ida on the system’s operations.

While the impact on gas prices has yet to be seen, Patrick De Haan, Head of Petroleum Analysis at GasBuddy, said Sunday that while gas prices will not skyrocket, there is a 75% chance there will be a 5-cent increase in gas prices and a 60% chance prices increase by 10 cents. A spokesman for AAA said a surge as high as 20 cents per gallon is not out of the question, as nine refineries were in Ida’s forecast track.