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WALKER: New Speaker Is Good for Energy

For the first time, the House of Representatives removed its leader by a vote instigated by one of the majority party’s own. After a few failed attempts to elect a successor, Rep. Mike Johnson of Louisiana slid in to clinch the speaker’s post by garnering support from his party. Perhaps a lesser-known figure, Johnson has a solid record of supporting oil and gas exploration in a Gulf state with a significant fossil fuel industry.

Johnson has the backing of energy groups eager to work with him on such issues.

The Energy Workforce & Technology Council president said, “From our perspective, Speaker Johnson has been an ally to the oil and gas industry and could play a major role in changing the narrative surrounding the vilification of the industry.”

Independent Petroleum Association of America said it looks forward to working with the new speaker “on the issues that impact independent oil and natural gas producers across the country.”

Other groups were not thrilled and were quick to issue statements regarding Johnson’s perceived energy prowess. It didn’t take long for the attacks to mount.

The Sierra Club claims Johnson has “extreme views on climate change and science.” Others say he’s a “zealot,” “anti-science” or a “climate denier.” And some don’t like his stance on wind and solar because they are “inefficient sources of energy.” But receiving so much angst from those groups might make Johnson a great choice regarding good energy policy.

Whatever one’s opinion of the new speaker, it seems clear he will prioritize energy production at home. He recognizes that fossil fuels are still critical to our energy needs and the production should be ramped up rather than scaled back. As nice as the idea is of having wind and solar to power our needs, Johnson points out that those sources just aren’t adequate.

Criticizing the Inflation Reduction Act as “green energy slush funds,” Johnson’s first major legislation passed among House Republicans would cut billions of dollars in consumer rebates for energy efficiency upgrades included in President Biden’s signature climate law. It also slashes funding for the Energy Department’s energy efficiency office.

While this legislation is not likely to pass the Senate nor receive the president’s signature without some changes, it represents a starting point as Republicans negotiate spending with Democrats ahead of a mid-November government shutdown deadline and a more reasonable approach to energy. Johnson understands that such subsidies are not in the best interests of the typical American and a waste of taxpayer funds.

Regarding renewables, the speaker is not the only one to question their efficiency and reliability. There’s plenty of evidence to showcase the shortcomings of wind and solar.

The biggest examples are winter Storms Uri and Elliot that ripped through Texas and the Southeast in the last few years. Both left millions without power. And it was the use of coal that prevented the energy systems from total collapse. Weather-dependent resources failed and were insufficient to handle the substantial energy output those storms demanded.

In fact, Energy Ventures Analysis issued a report this year analyzing the energy needs and pitfalls of Storm Elliot. It states that wind “is not a reliable form of electricity generation during these weather events. … The only form of power generation that can increase output significantly to meet high electricity demand is powered by fossil fuels.”

Johnson is correct to say that wind and solar are inefficient sources of energy. More of our elected officials should take note.

Energy policy is obviously not going to change overnight with a new House speaker, especially with a thin majority and a Democratic Senate and executive branch. Much is to be done to pull us back from the disastrous policies of the last three years. But it would appear that Johnson is not about to let the safety and security of the American people be sacrificed on the altar of climate change or some political agenda. This is good news for the energy industry and for the American consumer.

Energy Execs Warn of Looming PA Power Shortages

“At the current trajectory, PJM is not going to have sufficient power to meet the demands of consumers, and prices are likely to increase.”

That dire warning came from Glen Thomas, president of the industry group PJM Power Providers, at a state Senate Environmental Resources and Energy Committee briefing earlier this week addressing the pressing concern of electrical grid reliability in Pennsylvania.

Grid operator PJM distributes power across 13 states from Illinois to North Carolina from its headquarters in suburban Philadelphia. The company doesn’t generate electricity or operate power plants. Instead, its primary mission is to “ensure the safety, reliability, and security of the bulk electric power system,” including here in Pennsylvania.

And that mission, Thomas warned lawmakers, is in danger as reliable power sources continue to be retired from the grid—something that’s occurring “faster than anticipated.”

Thomas told DVJournal that “demand is increasing, supply is retiring, and it’s not being replaced by the quantity of assets necessary to sustain reliability.”

“It’s a pretty simple supply-and-demand issue,” he said. “Electricity markets are complicated, but the problem itself is that demand is going up, and supply is leaving and not being replaced.”

At the briefing, committee Chairman Gene Yaw (R-Bradford) blamed green-energy politics for the pace of power source retirements.

“Short-sighted environmental policies have forced fossil fuel plants into nonexistence, resulting in fewer reliable energy sources to shoulder the burden of increased demand on Pennsylvania’s electrical grid,” Yaw said.

James Locher, the chief operating officer of Key Con LLC, also spoke at the briefing, laying out how much Pennsylvania households still rely on fossil fuel-generated energy. Key Con LLC manages the large Keystone and Conemaugh coal plants in western Pennsylvania. Locher said these plants deliver “3,400 MW of reliable power” into the PJM system.

And during weather events like 2022’s Winter Storm Elliott, his plant becomes absolutely essential. As the cyclone bomb drove temperatures down and demand up, PJM called for customers to conserve electricity use as it struggled to find power sources to meet demand.

“Without adequate and comparably reliable replacement capacity accounting for the contributions of Keystone, Conemaugh, and other coal-fired units,” Locher said, “future electric power system failures in PJM are more likely during similar extreme weather events.”

PJM itself has been undertaking extensive research to determine the scope of the grid retirement crisis it is currently facing. In research published earlier this year, a company analysis predicted a whopping 21 percent of its “current installed capacity” could be out of commission within seven years, with the largest share of those closures, PJM estimated, potentially coming from government regulations.

The company estimates “40 GW of existing generation … at risk of retirement by 2030.” Breaking it down, PJM projected “6 GW of 2022 deactivations, 6 GW of announced retirements, 25 GW of potential policy-driven retirements, and 3 GW of potential economic retirements.”

Thomas said it could be difficult to determine the effects of environmental policies on costs versus outright closures of plants. “If an environmental regulation changes, and that increases the costs associated with a unit’s ability to produce power, and it’s forced to retire, is that a policy retirement, or an economic retirement?”

“Very few of these policies are mandating retirement,” he posited, “they’re just increasing costs associated with these facilities until they’re no longer economically viable.”

Demand will also rise in the near future, the PJM analysis said, ranging from 1.4 percent to localized 7 percent surges. And what the grid loses in legacy generation, the analysis said, it will not make up for in next-gen renewables.

Thomas told DVJournal that “right now, the market rules are set up in such a way that most units are receiving an economic signal to retire.”

“If we can change those economic rules so that those economic signals change, I believe there is an opportunity to turn this around,” he said. “But on the current trajectory, with the current rules in place, this region is going to be short of power” in the next few years.

PJM’s “New Services Queue” consists “primarily of renewables (94 percent) and gas (6 percent),” the analysis said. The “historical rate of completion for renewable projects has been approximately 5 percent,” PJM noted, and “the current pace of new entry would be insufficient to keep up with expected retirements and demand growth by 2030.”

Yaw pointed out that Pennsylvania’s access to electricity isn’t determined by what happens in its borders.

“What other states do has a great effect on the grid. For example, any of the [PJM] states that say they’re going to go completely green or clean or whatever you want to call it — they say they’re not going to use any more fossil fuel. Well, that means they’re going to rely on someone else to provide power for them in those times when these clean and green energy projects don’t work. They’re intermittent; they depend on the time of day. The example I use is: Where does the power come from for a solar array at 3 o’clock in the morning?”

Yaw said the effect of current and upcoming plant closures could take as much energy off the grid to equal about 40,000 acres of solar panels. “We don’t have 40,000 acres of solar panels in the works. I’m not even sure where we would put 40,000 acres of solar panels.”

“If we keep giving PJM the policy that we’re doing by switching over without a plan behind it, I don’t know what the solution is,” he said.

“There are two solutions: There will be certain times when you operate your appliances or charge your car or whatever, or there will be rolling blackouts. Neither of those sounds like they’re very good options to me.”

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In Louisiana’s Oil Rig Country, a Mobile Wind Farm Giant Emerges

“We’re going to need a lot more American ships, so I hope everyone’s ready to keep working.”

That was the message this week from David Hardy, group executive vice president at Danish energy company Ørsted, whose company has commissioned the construction of a massive water vessel that can act as a high technology support vessel for regional wind farms wind farm.

Ørsted, along with Boston-based energy provider Eversource, have tapped Louisiana-based Edison Chouest to build the ultra-modern ship to help ferry renewable wind power into critical Northeast markets. The corporations say the craft will lead the U.S. into a new era of clean energy production.

Company leaders gathered at the Chouest shipyard in Terrebonne Parish on Tuesday to offer a glimpse at the Eco Edison, the first such wind-farming vessel purpose-built in the United States.

Its construction is taking place in an area of the world well-known for its high levels of oil drilling and rig activity. The federal government states that around 3,200 oil and gas structures of varying sizes “remain active” in the Gulf of Mexico.

Upon its construction, the 260-foot-long ship will have taken about 500,000 man-hours to produce. It is expected to sail to its home base in Port Jefferson, New York, in 2024.

On Tuesday Hardy touted what he said were the promising benefits to vessels like the Eco Edison, claiming that the growing reliance on renewable energies like wind allows the U.S. “greater energy independence from adversarial countries like China and Russia.”

“Wind energy is an increasingly important part of America’s overall energy mix, and we’re proud to be building, new energy projects that will power, millions of US homes and businesses,” he said.

The ship will be crewed by around five dozen workers drawn from the northeast region to which it will be providing power. The onboard technicians, who the company says will work a two weeks on/two weeks off schedule, will have access to on-ship entertainment and recreation facilities including a gym and a movie theater.

The ship will essentially function as an at-sea headquarters and base of operations for the works servicing and maintaining around 200 wind turbines off the New England coast.

“This shipyard and this vessel are living proof that the American offshore wind industry is creating jobs today,” Hardy said at the event.

Renewable energy at present comprises just over one-fifth of all electricity generation sources in the United States, according to data from the Department of Energy.  Fossil fuels—overwhelmingly coal and natural gas—make up 60 percent of the U.S. energy profile.

Wind, meanwhile, represents nearly half of the total U.S. renewable electricity capture, with 10.2 percent of renewable energy coming from wind farms. Hydroelectric comes in second at 6.2 percent.

House Majority Leader and Louisiana Rep. Steve Scalise said at the event that regarding the U.S. energy profile, “it’s not a question of which source of energy we need.”

“The world is going to need more energy, and we’re going to need all forms of energy,” he said, arguing that the U.S. has “been at the front end of innovations” including those in renewable energy sources.

Beyond its role in next-gen energy technology, Ørsted has touted the numerous technological advantages the ship possesses to carry out its duties, including a “motion-compensated gangway” that will permit crews easy and safe access to wind turbines. A “daughter” ship will also be onboard to ensure easy ferrying of crews from the vessel to work locations.

Mike Ausere, a development vice president with Eversource, said at Tuesday’s event that the Eco Edison was just “one of the many ships needed for offshore wind.” He argued the project “represents the beginning of a renewed era of American global economic leadership.”

Hardy, meanwhile, optimistically predicted the ongoing creation of renewable energy jobs for many years down the road.

“We’re putting people to work today, and we’ll put the next generation of workers to work as well,” he said.

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RGGI Will Cost PA Billions, Nonpartisan Review Says

One year, $663 million.

That is the price tag Pennsylvania’s nonpartisan Independent Fiscal Office said will likely result if and when the state joins the controversial Regional Greenhouse Gas Initiative as Gov. Josh Shapiro has indicated it will.

Shapiro’s administration “estimates that proceeds from this initiative will total $663 million for fiscal year 2023-24,” the IFO said in its state Senate Appropriations Committee report last month.

The IFO noted that a Pennsylvania Department of Environmental Protection estimate put the number tens of millions of dollars higher, at $688 million. Either way, the green-energy plan will increase energy costs by billions over the next decade.

At last month’s appropriations hearing, Montgomery County state Sen. Tracy Pennycuick (R-Bucks/Montgomery) quizzed Independent Fiscal Office Director Matthew Knittel on RGGI’s potential effects on job development in the state.

“We are a net producer of energy, which is great,” Pennycuick said. “But if we were to enter into RGGI, how would that affect our ability to attract new businesses to Pennsylvania?”

Knittel did not answer the question directly. “Like other levies on energy, I would assume that those costs would be passed forward to the ultimate consumers of the energy,” he said.

Asked by Sen. Elder Vogel “how [the money] would be collected,” Knittel said, “The RGGI entity runs the auction process, they would collect the revenues, and then redistribute them out to the states.”

Knittel said the money would be funneled into the Pennsylvania Clean Air Fund, after which it would be distributed throughout the state.

Vogel told the Delaware Valley Journal the state’s adoption of RGGI “will certainly raise energy prices, which I believe will burden both current Pennsylvania businesses and prospective businesses interested in establishing roots here, as well as vastly increase the number of jobs lost across our state.”

Vogel admitted that “it is unclear at this time if these increased energy costs would indeed be a reasonable trade-off because we don’t truly know what the impact on the environment will actually be.”

At the hearing, Senate Appropriations Chair Sen. Scott Martin (R-Lancaster) told DEP Acting Executive Deputy Secretary Jessica Shirley the state has been “fighting this battle over RGGI for a very long time.” 

“There’s a lot of ideas out there,” Martin said. “We want to be part of that conversation with you. It’s really important now more than ever. People are facing inflationary costs now.”

As a gubernatorial candidate, Shapiro originally indicated he opposed the implementation of RGGI in the state. Since taking office, he has moved to consider enacting it.

Former Gov. Tom Wolf had previously tried to implement RGGI via executive directives. The state Commonwealth Court blocked the move last summer, with the program’s adoption in the state still tied up in litigation as of this month.

Sen. Kristin Phillips-Hill (R-York) told DVJournal the Shapiro administration planned on “going it alone” on RGGI.

“This is something they’re trying to enter us into without the consent of the General Assembly,” she said. “Every other state has done it expressly through their legislatures. From a process point of view, I’m really concerned.”

Phillips said the state assembly tried to litigate the potential unilateral implementation of RGGI. “We were not successful,” she said.

Sen. Greg Rothman (R-Cumberland/Dauphin/Perry) echoed Phillips-Hill’s criticism of potential unilateral RGGI implementation.

“I do not [support it],” he told DVJournal. “And even if I did, it should be joined with legislature’s consent or by legislation.”

“Obligating the citizens of Pennsylvania to pay higher energy costs without accountability is undemocratic,” he added.

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