[USA] NY Gov. Hochul enacts gas ban and carbon trading program

On May 3, 2023, New York Governor Kathy Hochul (D) signed the FY 2024 Budget, which included several measures designed to accelerate the state’s shift away from fossil fuels, into law.[1] Included in the $229 billion budget is the nation’s first statewide ban on natural gas and other fossil fuels in new buildings, with the requirement coming into effect for new construction in 2025.[2] In addition, the budget includes the first cap-and-invest program on the East Coast. It authorizes the New York Power Authority (NYPA) to act as a developer of renewable power facilities and requires six peaker plants in New York City operated by NYPA to be shut down by 2030. The budget also allocates $400 million to provide relief to residents experiencing high electric bills as well as lowering energy burdens through electrifications and retrofits. New York has one of the most ambitious climate plans in the U.S. The state’s 2019 Climate Leadership and Community Protection Act (CLCPA) requires an 85% reduction in greenhouse gas emissions by 2050, almost half of which must be reached by 2030.

[1] https://www.governor.ny.gov/news/governor-hochul-announces-highlights-historic-fy-2024-new-york-state-budget

[2] Hospitals, critical infrastructure, and commercial food establishments are exempt. Buildings where the local grid is not capable of handling the load are also exempt.

[USA] Environmental groups sue for oil and gas leasing phaseout on federal lands

On April 25, 2023, environmental groups[1] sued the U.S. Department of the Interior for failure to respond to a January 2022 rulemaking petition to phase out oil and gas development on federal lands[2]. More than 360 groups signed the initial petition, which asked the Biden administration to enact a policy framework to phase out nearly all oil and gas development on federal lands by 2035.[3] According to the press release announcing the lawsuit, research published since this petition shows that developed countries must end oil and gas extraction by 2031 to avoid the negative effects of warming 1.5 degrees Celsius, the target the United Nations has set to prevent some of the worst potential climate impacts. In the two years since coming to office, the Biden administration has approved 6,430 permits for oil and gas drilling on public lands, outpacing the Trump administration.

Under the Administrative Procedure Act, federal agencies are required to initiate rulemaking or provide a substantive response to rulemaking petitions within a reasonable timeframe. The lawsuit alleges that the Biden administration’s failure to respond to the petition is an unreasonable delay, citing the urgency of the climate crisis.

[1] Center for Biological Diversity, Wildearth Guardians, and Friends of the Earth

[2] https://biologicaldiversity.org/w/news/press-releases/lawsuit-targets-us-delay-on-petition-to-phase-out-public-lands-oil-drilling-2023-04-25/

[3] https://biologicaldiversity.org/programs/public_lands/energy/dirty_energy_development/pdfs/Petition-to-Phase-Down-Fossil-Fuel-Production-on-Public-Lands-and-Water-19-Jan-2022.pdf

[USA] Biden administration reverses Trump-era plan for the National Petroleum Reserve-Alaska

On April 25, 2022, the Department of the Interior announced that it has signed a new management plan for the National Petroleum Reserve-Alaska (NPR-A), a 23 million-acre area on Alaska’s North Slope.[1] The Bureau of Land Management (BLM) says that the plan “balances protection of special areas and wildlife habitat with responsible resource development.” The BLM had announced in January 2022 that it would review the integrated activity plan (IAP) for the area. The final decision reverses a Trump-era plan that had opened 82% of the NPR-A’s land to oil and gas leasing. The new plan reinstates the previous management plan, which was put into place by the Obama administration in 2013. The new IAP protects about half of the reserves lands, including caribou and avian habitats, from oil and gas leasing. It also includes new requirements for potential oil and gas drilling, such as revised operating standards to protect endangered species. The BLM has held a yearly oil auction in the NPR-A since 2010, with the exception of 2020 when oil and gas prices were low due to the pandemic.

[1] https://www.blm.gov/press-release/following-january-announcement-bureau-land-management-issues-record-decision-national

[USA] Biden announces ban on oil, natural gas, and coal imports from Russia

On March 8, 2022, President Biden announced that his administration is banning all Russian oil, natural gas, and coal imports to the U.S. in response to Russia’s invasion of Ukraine.[1] During the announcement, President Biden warned that the ban could lead to a spike in gas prices within the U.S. and said that he would work to mitigate the ban’s impact. Biden called on domestic oil producers to pump more oil to keep prices from rising. In the long run, he stated that the way to avoid high gas prices is to speed up the transition to clean energy.

Russia is the third-biggest oil producer in the world and is the third-largest source of oil to the U.S. Russia accounts for about 8% of imported oil and petroleum products. According to the Energy Information Administration (EIA), about 1% of Russia’s annual oil production is sent to the U.S.[2] In 2021, the U.S. imported an average of 209,000 barrels per day of crude oil and almost 500,000 barrels per day of other petroleum products from Russia, according to the American Fuel and Petrochemical Manufacturers.[3] Most of the other petroleum products are unfinished oils that are processed into gasoline, diesel, and jet fuel, among other products.

[1] https://www.whitehouse.gov/briefing-room/statements-releases/2022/03/08/fact-sheet-united-states-bans-imports-of-russian-oil-liquefied-natural-gas-and-coal/

[2] https://www.eia.gov/international/analysis/country/RUS

[3] https://www.afpm.org/newsroom/blog/oil-and-petroleum-imports-russia-explained

[USA] FERC adopts new criteria for reviewing natural gas infrastructure proposals

On February 17, 2022, the Federal Energy Regulatory Commission (FERC) adopted a new framework for reviewing natural gas infrastructure proposals, updating the previous framework set in 1999.[1] The new framework includes expanded criteria for deciding whether facilities are needed and potential economic and environmental impacts. Previously, FERC judged whether a pipeline was needed only by whether it had contracts for its supply. The Commission will now consider factors like demand projections and potential cost savings to customers. FERC also issued an interim policy statement outlining how it will consider greenhouse gas (GHG) emissions when reviewing natural gas projects. Under the interim policy, projects that will release at least 100,000 metric tons per year of GHG emissions will require an environmental impact statement instead of a less rigorous environmental assessment. The interim GHG policy framework takes effect immediately, including on pending projects. Comments on the policy are due on April 4, 2022.

The policies were approved along party lines, with the commission’s three Democratic members approving the policies and the two Republican members opposing them. The policy statements are partly in response to a series of court decisions that overturned some of FERC’s approvals of gas projects, such as Sabal Trail, Birckhead, Vecinos, and Spire Pipeline. Those court decisions cited the commission’s failure to consider several factors, including GHG emissions, whether the project was needed, and potential effects on environmental justice communities. The new policies are intended to improve the legal durability of the Commission’s decisions moving forward.

[1] https://www.ferc.gov/news-events/news/ferc-updates-policies-guide-natural-gas-project-certifications

[USA] AGA Report: Natural gas key for a net-zero transition

According to a new report released on February 8, 2022, by the American Gas Association (AGA), natural gas will be essential for meeting the U.S.’s net-zero emissions goals.[1] The report, called Net-Zero Emissions Opportunities for Gas Utilities, underscores the advantages of gas technologies and distribution infrastructure. It analyzed four pathways to achieve net-zero emissions by 2050. All four pathways included expanded efficiency initiatives, a shift to renewable and low-carbon gas, reduced emissions from natural gas operations and pipelines, carbon offsets, and negative emissions technologies. According to the report, the number of natural gas customers will grow in all the scenarios.

The AGA’s report found that scenarios that include natural gas and existing utility delivery infrastructure offer opportunities to incorporate renewable and low-carbon gases, help minimize customer impacts, maintain high reliability, improve overall energy system resilience, and accelerate emissions reductions. It also found that the U.S. can achieve significant emissions reductions by accelerating the use of tools like high-efficiency natural gas applications, renewable gases, and methane reduction technologies. Further, supportive policies and regulatory approaches will be essential for gas utilities to achieve net-zero emissions. According to the AGA, the industry has already made great progress in reducing emissions: there has been a 69% reduction in methane emissions since 1990 and a 47% reduction in residential emissions per customer since 1971. Improvements in natural gas efficiency and the growth of renewable energy have led to carbon dioxide emissions from energy sources hitting 30-year lows.

[1] https://www.aga.org/globalassets/research--insights/reports/aga-net-zero-emissions-opportunities-for-gas-utilities.pdf

[USA] Pennsylvania regulators release draft rules to cut methane emissions from existing oil and gas wells

On December 10, 2021, the Pennsylvania Department of Environmental Protection (DEP) released draft final rules to cut methane emissions from existing oil and gas wells. Pennsylvania is the second-largest gas-producing state after Texas.[1] The DEP first released the draft rules for new wells in 2019 and has collected comments over the past two years. The newly released draft applies to existing oil and gas wells and associated facilities. It includes an exception for oil and gas wells that produce less than 15 barrels of crude a day. The draft requires operators to conduct leak searches four times a year and upgrade existing equipment to reduce pollution from controllers, pumps, compressors, and tanks. According to the DEP, the final rules are expected to reduce emissions of volatile organic compounds by nearly 12,000 tons per year and methane emissions by about 214,000 tons per year, compared to about 75,000 tons in the previous draft. The draft was released in advance of the DEP’s Air Quality Technical Advisory Committee meeting. It still has to be reviewed by several state boards and could be in place by mid-2022.

[1]https://files.dep.state.pa.us/Air/AirQuality/AQPortalFiles/Advisory%20Committees/Air%20Quality%20Technical%20Advisory%20Committee/2021/12-9-21/post_OG_CTG_FRN_ANNEX_A__DRAFT_AQTAC.pdf

[USA] New York regulators reject proposed NRG and Danskammer Energy natural gas plants

The New York Department of Environmental Conservation (DEC) announced on October 27, 2021, that it has rejected Title V air permit applications for NRG Energy’s proposed Astoria Replacement Project and Danskammer Energy LLC's planned Danskammer Energy Center.[1] [2] The DEC rejected the two proposed natural gas-fired plants because their project emissions are inconsistent with achieving the goals set out in New York’s 2019 Climate Leadership and Community Protection Act (CLCPA). New York’s 2019 climate law requires the state to reduce statewide greenhouse gas emissions 40% below 1990 levels by 2030 and 85% below 1990 levels by 2050. The law also requires the state's electricity to be emissions-free by 2040.

Danskammer Energy submitted its air permit application on December 3, 2019, for a 536 MW plant in Newburgh, New York. Astoria Gas Turbine Power, a wholly-owned subsidiary of NRG Energy, submitted its application on April 27, 2020, for a proposed 437 MW facility in Astoria, New York. Both companies put forth several arguments for why the proposed projects meet the requirements of the climate law, including that the projects have lower emissions than the plants they would be replacing. The companies also cited the potential future use of renewable natural gas and hydrogen, which would lower the plants’ environmental impact. NRG and Danskammer Energy have 30 days to appeal the DEC's decision and request an administrative adjudicatory hearing.

[1] https://www.dec.ny.gov/press/124069.html

[2] https://www.dec.ny.gov/press/124070.html

[USA] Duke and Dominion cancel Atlantic Coast Pipeline amid ongoing legal battles

On July 5, 2020, Duke Energy and Dominion Energy announced that they are cancelling the Atlantic Coast Pipeline—originally slated to run 600 miles from West Virginia to eastern North Carolina to provide additional natural gas capacity in the region—due to ongoing delays and cost uncertainty.[1][2] The Atlantic Coast Pipeline project has run into several legal challenges which has increased cost estimates from $4.5 billion to $8 billion. In June 2020, the Supreme Court ruled 7-2 overturning a lower court’s decision to block the pipeline from crossing beneath the Appalachian Trail, a protected national scenic trail overseen by the U.S. Forest Service. Despite this win, Duke and Dominion pointed to other legal battles as barriers to the project. In particular, the U.S. District Court for the District of Montana decision to overturn federal permit authority for waterbody and wetland crossings and a Ninth Circuit ruling on May 28, 2020 are stated as major concerns.

In addition to the announcement regarding the Atlantic Coast Pipeline, Dominion announced the sale of its natural gas transmission and storage assets to a Berkshire Hathaway affiliate for $9.7 billion.[3] However, this sale does not include Dominion's interest in the Atlantic Coast Pipeline.

[1] https://news.duke-energy.com/releases/dominion-energy-and-duke-energy-cancel-the-atlantic-coast-pipeline

[2] https://news.dominionenergy.com/2020-07-05-Dominion-Energy-and-Duke-Energy-Cancel-the-Atlantic-Coast-Pipeline

[3] https://news.dominionenergy.com/2020-07-05-Dominion-Energy-Agrees-to-Sell-Gas-Transmission-Storage-Assets-to-Berkshire-Hathaway-Energy-Strategic-Repositioning-Toward-Pure-Play-State-Regulated-Sustainability-Focused-Utility-Operations

[USA] Supreme Court reverses lower court decision, allows construction on Atlantic Coast Pipeline

On June 15, 2020, the Supreme Court issued a 7-2 ruling reversing a lower court decision on Atlantic Coast Pipeline LLC v. Cowpasture River Preservation Association which stopped construction on the $7.4 billion, 600-mile Atlantic Coast Pipeline (ACP) owned by Duke Energy and Dominion Energy.[1] The Supreme Court ruling gives the U.S. Forest Service, an agency of the U.S. Department of Agriculture that administers U.S. national forests and grasslands, the authority to grant the ACP developers right of way on the project because it goes over 600 feet underground across a portion of the Appalachian Trail, which is part of the National Park System. This does not necessarily mean that the U.S. Forest Service will approve the project. Critics of the pipeline say that the pipeline still has other hurdles in its path and the decision is not a definitive greenlight for the project. However, both utilities issued statements that the ruling is "an affirmation for the Atlantic Coast Pipeline."

The Supreme Court ruling will also affect the Mountain Valley Pipeline, a 303-mile project running from West Virginia to southern Virginia by crossing the Jefferson National Forest.[2] Construction on the nearly completed project was previously halted due to the Atlantic Coast Pipeline case.

[1] https://www.scotusblog.com/case-files/cases/atlantic-coast-pipeline-llc-v-cowpasture-river-preservation-association/

[2] https://www.mountainvalleypipeline.info/

[USA] Alabama regulators approve Southern Company’s request for nearly 2 GW of natural gas

On June 9, 2020, the Alabama Public Service Commission (PSC) unanimously voted to authorize Southern Company to buy, build, or contract for nearly 2 GW of natural gas resources to guarantee system resilience.[1] Previously, Alabama Power, a Southern Company subsidiary, had announced that it is switching from a summer-peaking to a winter-peaking system, and proposed several expansions in solar, energy efficiency, and natural gas for a total of about $1.1 billion. According to Alabama Power, the additions are part of a nearly 20% fleet capacity increase necessary for resilience. In addition to the approval of natural gas, about 200 MW of energy efficiency programs were approved. However, regulators did not approve the five proposed solar-plus-storage projects, stating that those resource additions should be considered on a separate docket not focused on resiliency.

The decision not to include solar-plus-storage has received backlash from environmental groups who claim that the solar-plus-storage projects would have saved customers more. According to Docket participants from Energy Alabama and the Southern Environmental Law Center, an environmental advocacy group and an environmental public interest law firm, respectively, Alabama Power’s analysis showed solar-plus-storage options were the least costly solution.[2]

[1] https://www.youtube.com/watch?v=XNRjWy1IgJo

[2] https://www.southernenvironment.org/news-and-press/press-releases/psc-approves-alabama-powers-1-billion-gas-expansion

[USA] FERC prohibits pipeline construction until legal issues are resolved

On June 10, 2020, the Federal Energy Regulatory Commission (FERC) issued an order prohibiting natural gas pipeline developers from beginning construction on a project until regulators act on rehearing requests.[1] The order partly addresses the issues raised during the D.C. Circuit Court of Appeals’ April 2020 en banc hearing, a hearing held in front all the judges in court, in Allegheny Defense Project v. FERC, which regards the Atlantic Sunrise Pipeline project to expand existing pipelines.[2] Under the Natural Gas Act (NGA), litigation is prevented until FERC makes a ruling on requests for rehearing, but FERC is capable of delaying those requests through tolling orders. Petitioners argued that the commission has been delaying requests for rehearing indefinitely while also allowing construction on pipeline projects to proceed. Critics say this practice has led to a legal purgatory of opposition to critical orders on wholesale markets which favors pipeline developers. FERC Commissioner Richard Glick dissented in part to the order, stating that although the order is a good first move, it does not address concerns that pipeline developers can still begin to condemn private land through eminent domain before the landowner is able to challenge the developer's ability to do so.[3]

[1] https://www.ferc.gov/CalendarFiles/20200609181333-RM20-15-000.pdf

[2] https://www.ferc.gov/legal/court-cases/briefs/2020/DC17-1098etalAlleghenyDefenseProject.pdf

[3] https://www.ferc.gov/media/statements-speeches/glick/2020/06-09-20-glick.asp#.XuKfvjpKg2y

[USA] Energy efficiency continues to be cheaper than natural gas

According to new research released by the U.S. Department of Energy’s (DOE) Lawrence Berkley National Laboratory on May 13, 2020, natural gas energy efficiency programs through utilities saved energy at a cost of about $0.40/therm (1 therm is equal to 100,000 Btu) from 2012 to 2017.[1] [2] Compared to natural gas—which averaged about $1/therm—energy efficiency programs are significantly cheaper. Researchers also found that commercial and industrial (C&I) programs had the lowest savings-weighted average cost of gas savings ($0.18/therm) during the study period. However, C&I programs represented only about 20% of overall efficiency program spending. For residential and low-income program savings costs were $0.43/therm and $1.47/therm, respectively. Savings costs varied widely by geographic region. For instance, savings in the Midwest averaged $0.29/therm while in the West saving averaged $0.59/therm. The study says this is likely due to higher spending on low-income programs in the West, as well as differences in savings opportunities between cold and temperate regions.

In response to the study, many efficiency advocates claim there are even more savings to be had through the electrification of end-uses, but the study did not consider this in their analysis. Additionally, efficiency advocates say the natural gas industry may be building unnecessary infrastructure; the Natural Resources Defense Council says around 90% of proposed gas power plants and their respective pipelines will likely be unnecessary by 2035.[3]

[1] https://emp.lbl.gov/news/energy-efficiency-continues-be-cheaper

[2] https://eta-publications.lbl.gov/sites/default/files/cose_natural_gas_final_report_20200513.pdf

[3] https://www.nrdc.org/experts/sheryl-carter/energy-efficiency-still-abundant-and-cheaper-gas

[Japan] J-Power USA Development has ordered two M501 J-series air-cooled power turbines for the Jackson Generation Project in Illinois

Mitsubishi Hitachi Power Systems (MHPS) announced on July 1, 2019, that J-Power USA Development (J-Power), an international power generating company[1], has ordered two of Mitsubishi’s M501 J-series air-cooled (M501JAC) power turbines. The turbines will be used at the 1,298 MW Jackson Generation Project, a Gas Turbine Combined Cycle Power Plant (GTCC) that will be built in Elwood, Illinois. The facility is expected to begin commercial operations in April 2022. The electricity generated by the facility will be supplied through PJM, an energy market in the eastern U.S.

The Jackson Generation Project is the world’s first project to introduce a JAC-type gas turbine with air cooling for the combustor. The gas turbine will be operated at a turbine inlet temperature of 1,600°C, aiming to improve the plant’s efficiency and reduce greenhouse gas emissions. The project’s power generation can reach 64% efficiency, and it is anticipated to be 99.5% reliable. The project will also adopt Mitsubishi’s MHPS-TOMONI digital solutions platform to optimize power plant operations.[2]

[1] https://jpowerusa.com/about_japan/

[2] https://www.mhps.com/jp/news/20190708.html?_ga=2.69733648.1828284031.1563074247-236393945.1554096284

[USA] “Cape Fear River Flooding Damages Sutton Lake, Causes Safe Shutdown of Natural Gas Plant”

[Duke Energy, 21 September 2018]  

Flooding of the Cape Fear River has cause Duke Energy’s L.V. Sutton 625 mw natural gas plant to shut down. The river’s flooding has “caused breaches in the cooling lake dam surrounding the cooling lake.” Water from the cooling lake also flowed into the natural gas plant itself. While there are two coal ash basins near the Sutton plant, Duke does not believe that the ash has breached the steel wall separating the basin and the cooling lake. Duke Energy has employees in place who are securing the area while engineers are developing and activating repair plans for the site. Duke also predicts that, based on historic data, that there is “little to no chance that cooling lake water will contribute to a measurable change to water levels in the area.”

[USA] “U.S. Becomes World’s Largest Crude Oil Producer and Department of Energy Authorizes Short Term Natural Gas Exports”

[DOE, 13 September 2018]  

The Energy Information Administration, in their Short-Term Energy Outlook, has found the US to be the largest global crude oil producer, greater than even Russia and Saudi Arabia. This past February, America’s crude oil production surpassed Saudi Arabia – a first in over 20 years. In June and then again in August, the U.S.’s crude oil production was greater than that of Russia’s for the first time since 1999. On a separate issue, the Department of Energy (DOE) has issued a short-term order for the Freeport LNG project to export up to 2.14 bcf/d of natural gas as LNG over a two-year term both to free-trade and non-free trade agreement countries; of course, this does not include countries that have been expressly banned from U.S. trade relations.

[Japan] Osaka Gas Acquired a 24.3% Stake in Kleen Energy Systems to Join Natural Gas Thermal Power Generation Business in Connecticut, USA

On May 14, 2018, Osaka Gas signed a contract with a subsidiary of Ares EIF Management, a major U.S. infrastructure fund for power generation and transmission, to acquire a 24.3% stake in Kleen Energy Systems, a natural gas thermal power generation business that operates in Connecticut, in the United States. Four Japanese companies (Osaka Gas, Kyushu Electric Power Co., Chugoku Electric Power Co., and Sojitz Corp.) together have majority ownership (81%) of Kleen Energy Systems. The Kleen Energy Plant, which began operation in July 2011, is a 620 MW natural gas-fired power plant in Connecticut.