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Situational awareness: "The Ohio House approved a bill Wednesday to gut clean energy standards and subsidize at-risk nuclear and coal plants after a last-minute push from a Trump reelection official to secure its passage," Politico reports.
Onto music: Yesterday marked 35 years since the indomitable Tina Turner released "Private Dancer," so one of those tracks will bring us into today's edition, which happens to have 1,076 words...
1 big thing: "Freedom gas" wafts over the internet
The Energy Department is having a viral moment that's both funny and a window onto the geopolitics of energy.
Driving the news: DOE uncorked a memorable phrase yesterday when it approved expanded shipments from the Freeport LNG site in Texas. Here's Under Secretary of Energy Mark W. Menezes yesterday in DOE's greatest press release ever (emphasis added):
- "Increasing export capacity from the Freeport LNG project is critical to spreading freedom gas throughout the world by giving America’s allies a diverse and affordable source of clean energy."
- Another DOE official touted "molecules of U.S. freedom to be exported to the world."
- "As one of my colleagues put it, spreading freedom gas sounds like what happens when you’re newly single and suddenly have the apartment to yourself."
Why it matters: Ok enough with the yuks, because the release is really about an idea that underlies President Trump's energy policy and also animated President Obama's (albeit with less aggressive phrasing) — using the U.S. oil-and-gas boom to provide geopolitical leverage.
- This takes multiple forms, like providing the oil markets more slack to absorb the loss of Iranian barrels to sanctions.
- And when it comes to that freedom gas, officials often cite the idea that expanded U.S. LNG shipments to Europe act as a check against Russia, the continents's dominant supplier.
- Indeed, as the Washington Post notes, Energy Secretary Rick Perry has previously touted the idea of "exporting freedom" to describe U.S. gas.
- However, the idea that U.S. exports create political and market leverage for allies is hardly crazy.
- Even if volumes are modest or not as cheap, alternative supply options give European nations leverage to strengthen their hand in negotiations with Russia's Gazprom.
Bonus: What they're saying about "freedom gas"
On the record: I chatted with energy and geopolitics expert Nikos Tsafos of the Center for Strategic and International Studies, who offers a dose of skepticism...
- "Freedom gas implies some political side effects — the idea that by relying on Russian gas, a country is somehow political subservient to Russia too. That’s the entire theory of it all. So once Lithuania or Poland get non-Russian gas, their *political* freedom to maneuver, their national security, their strategic posture will be enhanced," he said via email.
- "This is mostly a hypothesis, not a proven fact, and yet it is generally treated as a real fact, which leads people to rhapsodize about the political benefits of U.S. LNG. It would be helpful if these grand statements on the geopolitical benefits of U.S. LNG were subjected to empirical tests."
2. Exxon and Chevron turn back climate push
Resolutions pushing ExxonMobil and Chevron to get more aggressive on climate change were soundly defeated at annual shareholder meetings yesterday.
By the numbers:
- At Exxon's meeting, a resolution calling for a new board committee on climate won just 7.4% support. A separate measure partly about climate, calling for a report on the risks of expanding Gulf Coast petrochemical operations, drew 25% support.
- At Chevron's meeting, roughly 92% opposed a measure to create a new board committee on climate. About 67% opposed a resolution calling for a report on cutting emissions "in alignment" with the Paris agreement.
But, but, but: One Exxon measure that climate advocates saw as a proxy for their concerns, a resolution to create an independent board chairman, got 41% support, an uptick from last year.
Why it matters: The meetings were the latest example of growing investor pressure on oil giants over global warming.
Via The Financial Times, Exxon chairman and CEO Darren Woods defended the company's position at yesterday's meeting. FT reports...
"Mr Woods spoke at length about the steps Exxon was taking to address the threat of climate change, including support for research into new technologies that could eventually help to curb greenhouse gas emissions, including biofuels derived from algae and the capture and storage of carbon dioxide emissions from power plants."
3. Oil deals and appeals
Deals: 2 oil industry moves of note...
- Per Reuters, "Israel’s Delek Group said on Thursday that its Ithaca Energy subsidiary had reached a deal to buy the bulk of Chevron’s British North Sea oil and gas fields for $2 billion."
- Oklahoma-based Devon Energy is selling its assets in Alberta's oil sands to Canadian Natural Resources for $2.8 billion. Read more via the Houston Chronicle, which notes Devon is boosting its focus on U.S. shale holdings.
Policy: 2 Interior Department actions...
- The Hill reports that Interior is appealing a district court decision that blocked attempts to unwind Obama-era drilling bans in Arctic waters.
- AP writes that Interior "has agreed to put off oil and gas leasing for a year on land that Native Americans consider sacred surrounding Chaco Culture National Historical Park in northwestern New Mexico."
4. Chart of the day: the transportation challenge
Readers of this newsletter probably know that cutting carbon emissions from transportation — now the nation's largest source — is a tough nut to crack.
The big picture: As you can see, the number of cars on the road and vehicle miles traveled have mushroomed compared to population size over the decades.
5. Passenger ferries go electric
Ships are the latest mode of transportation to see electric upgrades as the maritime industry faces increased pressure to reduce greenhouse gases, writes Axios Expert Voices contributor Maggie Teliska.
The big picture: Passenger ferries are ideal for electric propulsion using current battery technology, which can reduce water and air pollution while providing a quiet, vibration-free trip. Short routes with frequent stops along populated shorelines offer ample opportunities to charge the battery packs.
Where it stands: Globally, there were 185 battery-powered vessels operating or scheduled for delivery in 2018, 58 of which were passenger ferries. Norway introduced the first all-electric ferry, named the MF Ampere, in 2015 to shuttle passengers between villages in the fjords.
What's new: Maid of the Mist plans to launch 2 all-electric, zero-emission boats in September on the U.S. side of Niagara Falls — the first domestically built all-electric boats used for tourists in the U.S.
- Washington State Ferries will introduce a 150-passenger hybrid ferry later this year in Puget Sound that runs on both diesel and battery power, using up to 60% less fuel than diesel counterparts.
- Also this year, New York City plans to introduce a 150-person ferry to shuttle commuters across the East River, from Brooklyn to Manhattan.
Teliska is a technical specialist at Caldwell Intellectual Property Law and CTO of Regent Power. She is also a member of GLG, a platform connecting businesses with industry experts.