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Does Biden’s Permitting Pause Squeeze U.S. LNG Exports? Experts Say No

To hear what impact the decision has on U.S. LNG exports, Curtis Tate spoke with Sam Reynolds and Ana Maria Jaller-Makarewicz of the Institute for Energy Economics and Financial Analysis.

A recent decision by the Biden administration to suspend permitting for new export terminals for liquefied natural gas has drawn criticism from West Virginia lawmakers.

To hear what impact the decision has on U.S. LNG exports, Curtis Tate spoke with Sam Reynolds and Ana Maria Jaller-Makarewicz of the Institute for Energy Economics and Financial Analysis, an organization that favors a faster transition away from fossil fuels.

This interview has been edited for length and clarity.

Tate: What does the pause on permitting for new LNG export terminals really mean?

Reynolds: Just for perspective, the U.S. is currently the largest global LNG exporter worldwide, we export about 86 million tons of liquefied natural gas a year. That’s more than Qatar and Australia, which are the next two largest. The U.S. currently has five projects under construction to export more LNG that would nearly double that amount over the remainder of the decade. Now, the U.S. pause on permitting, does not affect any of the existing or under construction projects. So that’s really important for consumers around the world to know that the U.S. is still on pace to nearly double its export capacity, and it’s already the largest worldwide.

Right now, in Asia, the U.S.’s largest customers are Japan and South Korea, and a lot of these new export facilities in the U.S. are justified under the impression that our customers need more of this LNG. In fact, if you look at these two largest buyers, Japan and South Korea, both are reducing their natural gas and LNG demand, and actually quite dramatically. So in Japan, LNG exports peaked in 2014 and have declined ever since. And they actually fell 8 percent last year, which is more than double the rate of decline in previous years. Japan is upping its nuclear and renewables capacity, and actually doesn’t want any more of this very expensive fuel, that is LNG. It’s opting for cheaper resources. and South Korea is very similar. LNG demand fell 4 percent last year, as it brings on cheaper energy sources like renewables and nuclear.

Tate: What about Europe? Didn’t Putin’s invasion of Ukraine cause European countries to become more reliant on U.S. LNG?

Jaller-Makarewicz: So while the U.S. was thinking, ‘Oh, Europe is in a big crisis, and we really need to step in to supply all the LNG that they need,’ at the same time Europe was working on their strategies to reduce gas demand. So what we see today, at the beginning of 2024, is a different reality than at the beginning of 2022. So what we have been saying in Europe, and I think that’s also the concern for the U.S. is that we need to analyze today’s conditions. For example, the gas demand in Europe reduced 20 percent In the last two years. Nobody could expect that. We could agree in certain instances, there’s some part of gas demand destruction. Part of it. But a great majority of it has been implementation of energy efficiency measures on gas demand management, on renewables. The mentality in Europe has changed now.

Tate: Can countries turn to other sources for LNG?

Reynolds: The growth, if you look at the growth markets for LNG demand, where is demand actually increasing? And the largest sources of growth for this product are in South Asia, India, Bangladesh, Pakistan, and Southeast Asia, Vietnam, Philippines, Thailand, Singapore. Now, these are much more price sensitive countries, they don’t have the same amount of wealth that Europe, Japan and South Korea have to spend on this relatively expensive product that is U.S. LNG.

And in fact, our main competitors for supplying these markets are Qatar and Australia, which are much cheaper sources of supply to this region. So they’re going to be making an economic decision about where to buy LNG. And actually, since the pause, we’ve seen a spate of deals announced with Qatar to buy more of their LNG. So it’s not necessarily that these countries are turning away from the U.S. specifically, because of the Biden pause. But there is an economic calculation to be made. Qatari LNG can often come in five to six times cheaper than U.S. LNG, which has to be shipped all the way around the world.

Jaller-Makarewicz: So I want to add something here. When the crisis started in Europe, Europe realized the dangers of depending so much on one supplier. That was the main problem that Europe was facing. So I don’t think they’re going to allow the same thing to happen. They are saying we need diversification of sources. So there will be up to a point where they will say that’s it. We need to diversify. We cannot accept more U.S. LNG, because we need to have more sources supplying the gas and LNG to Europe. So that also comes into play. Europe is under a lot of pressure for not repeating the mistakes of the past.

Tate: Has the Russia-Ukraine war accelerated the adoption of renewables and energy efficiency in Europe?

Jaller-Makarewicz: I can say that. And for example, in energy efficiency, before we were not talking about that topic, and suddenly, look, in September of 2022, I was in Madrid for an event. And it was hot. And they had a law that they couldn’t have the air conditioners, they had to have them up to a certain level, because they didn’t want to use more energy. We also got lots of talk here, the thermostats in the winter would have just one degree less, so they started to think about us as consumers, we could also do something to reduce it with our consumption. And it was not talked about like that before. Now it was decided, we need to speed up the renewables, we need to reduce all the problems with the bureaucracy and all that to allow those tax breaks to come into operation. So they accelerated that. I can say that they accelerated that.

Presentation: Renewables, Gas Poised To Dominate U.S. Power Grid

Curtis Wilkerson, founder and CEO of Orion Strategies, a public relations firm, said wind and solar are now the cheapest form of electricity.

What does the future hold for electricity generation? Renewables and gas will dominate the grid in the years to come, according to a presentation given to the Gas and Oil Association of West Virginia.

Curtis Wilkerson, founder and CEO of Orion Strategies, a public relations firm, said wind and solar are now the cheapest form of electricity.

“One of the things that is a large misnomer is that people think that renewables are expensive. They’re now the cheapest form of electricity,” he said. “When you look at what’s called levelized cost of electricity – that means from construction through its natural lifespan – and wind and sun don’t cost anything.”

Wilkerson said the future power needs of the country will include growth in building electrification and electric vehicles, as well as data centers.

And what was considered baseload power in the past, namely coal and nuclear, will be overtaken by renewables and gas.

“Solar in particular, has fallen 90 percent in the last 10 years, the cost. And the next cheapest form of electricity, which is largely dispatchable, is natural gas,” he said. “Notice how much more expensive coal is and how much more expensive nuclear is. And that gives you why if the projections for the United States, energy supply or electricity supply will be renewables and natural gas for many years to come.”

Gas currently supplies about 40 percent of the country’s electricity. Big growth in renewables, especially solar, is expected over the next two years.

But as Wilkerson told the trade association, electricity demand will grow, and gas can capture some of the growth along with renewables.

Manchin On His Senate Retirement And America’s Energy Future

Curtis Tate spoke with Manchin Wednesday about that decision, what he wants to do next and what he accomplished during his time in office.

U.S. Sen. Joe Manchin announced his retirement from the Senate last month. Curtis Tate spoke with Manchin Wednesday about that decision, what he wants to do next and what he accomplished during his time in office.

Manchin also spoke about U.S. energy policy and electricity prices in West Virginia. Manchin is the chairman of the Senate Energy and Natural Resources Committee and has had a prominent role in shaping national energy policy in recent years.

This interview has been edited for clarity and length.

Tate: You said when you announced your retirement from the Senate that you’d accomplished what you set out to do for West Virginia? Could you name maybe three of those things?

Manchin: Oh, I could. I mean, there’s so many things we’ve done there. But let me just give you some things that we passed in West Virginia. First of all, we got the Mountain Valley Pipeline. Next, we had the ARCH hub hydrogen hub. That’s your major turning points for us, the hydrogen. The MVP is going to create a lot of opportunity. We’re producing an awful lot of gas, there’s going to be an awful lot of opportunity to the industry coming. With the Inflation Reduction Act that we passed to help West Virginia, we got Form Energy up in the Weirton area that’s going to be producing tremendous amounts of battery storage. We have Nucor Steel coming along the Ohio River, Mason County. The opportunities continue to keep coming. We’ve got another hydrogen plant going on in Mingo County, down in southern West Virginia. It’s Adams Fork, using methane coming off the coal seams and turning it into hydrogen.

So we have put ourselves in a position to transition as the country and the world is changing. And we’ve got to be carbon conscious. But the bottom line is we’re producing more fossil (fuel) today cleaner and better than anywhere in the world. So we reduced our emissions for the last two decades. And then during that one of the things I’m most proud of, I was able to fight like the dickens and we were able to get the miners of West Virginia and all across the country – coal miners – their lifetime pensions and their lifetime health care benefits that they were promised and were going to be robbed from. We got that into law. Now, it’ll never happen.

Tate: What does American energy security look like in 2030, 2040, 2050?

Manchin: You can’t eliminate but you can innovate. If we create the technology and show them how, if you’re going to use carbon, if you’re going to use fossil, are you capturing the carbon, so you don’t emit it? If you’re producing natural gas, are you capturing the methane so it doesn’t escape in the atmosphere, which is very, very harmful? Are we doing everything we can by innovating technology? And then entice the other countries and say, “Well, you can’t tell me what to do and what I can do, I can burn anything I want, I can do it any way I want to do it.” OK, you’re a sovereign country, we don’t have jurisdiction over you. But if you want to compete in our market, if you want to be part of the greatest economy, and the greatest economic market in the world, the United States, then these are our conditions. And you can’t do something that’s not feasible. It’s not reasonable. Perfect example, they tried to make us do things before, the technology was never there. We never perfected carbon capture, we couldn’t do it in a feasible way. And then they basically said “the war on coal,” they were putting benchmarks and if you use coal, this is what you had to do. But there was no way to get to those benchmarks, because the technology wasn’t there. So that’s what has happened in the past. That’s what we’re preventing now.

We’re going to make sure we have the technology that we can remove and limit and basically undo an awful lot of the damage that has been done and still have the fossil energy that we need and still have the renewable. To give you another perfect example, Curtis, you have coal-fired plants around the country. And even in West Virginia, they’re closed down, they get old and timed out. No one’s building new ones. I think we all agree to that. And the United States, those coal-fired plants that have burned that have shut down, are in a perfect position for small modular reactors (SMR). These are new technologies of nuclear, nuclear energy, that are safe. That’s basically dispatchable. We can put it in those areas that we had coal fired plants, because all the switch gears are right there. It’s almost like a plug and play. And it keeps the vitality of those communities. It has revenue and has jobs. That’s what we’re looking for.

Tate: Is that something though, that can help lower the cost of electricity for West Virginians?

Manchin: Well, we’ve got to that’s where the federal government comes in. We’ve got to make sure everything that you have, whether it’s internet, or anything modern, today’s modern society, usually came through our energy labs. We have 17 labs around the country. And those labs are kind of experimental. DARPA (Defense Advanced Research Projects Agency) and all the different things from the internet, all the way up to AI and everything they’re talking about. We can and we will be able to do that. But we’ve got to get those costs down. The demand for fossil fuel is what’s driving the cost of gasoline, it’s driving the cost of energy that we use in our house. Because of the demand for coal, coal prices are higher. Today, we’re producing 5 percent more coal than we did last year in West Virginia, we’re paying higher prices than we’ve ever paid in the history of our country for coal, to have thermal coal and also for steelmaking. But the rest of the world has such an appetite, they’re driving the price of this up. So we have to have other alternative energy to drive it down. And that’s what we’re trying to do to give you more options. Wind and solar is your cheapest, but you know what, it’s intermittent power. It doesn’t give you 24/7 reliability.

Tate: But those batteries that you mentioned that Form Energy is going to build. Those can can help fill the void, can’t they?

Manchin: They sure can, Curtis. We don’t have the battery storage right now that we can give you 24/7 energy that’s produced only six or seven hours a day. When we get to that point, we’re trying very hard, but also with SMRs, these micro reactors. There’s so many things that we can do there. Another up in Ravenswood, the old Ravenswood plant. We have that’s where we – I’m trying to think how they describe that. But it’s a new power grid that’s all renewable. And it’s used basically for all the industry in that area is going to be there. And it’s done by Berkshire Hathaway. So it’s a tremendous opportunity there. This is going to revolutionize how we use energy for manufacturing and things of that sort. But right now, it’s ridiculous. I was in this conversation yesterday. When I was governor, we were paying around eight, nine cents a kilowatt hour for residential, five, and six cents for commercial because our coal fired energy has always been an advantage for us for manufacturing, to have reliable, stable power. Dependable, reliable and affordable. Now the price is 14 cents.

Tate: People who retire from Congress, they go on to become lobbyists, they might be university presidents or serving in Cabinet posts or ambassadorships, corporate boards. Are any of those things on the table for you next?

Manchin: I haven’t looked at anything. And I haven’t thought about any of that, because I’ve still got a heck of a job to do for the next 13 months. And I’ve been working my tail off on that one. There’s a lot of things I want to accomplish. And I have a great staff and they’re fighting like the dickens. No one’s giving up. We’re basically going to give it every week, everything we have for the last man to the last day. And that would be early January of 2025. So but I’m more concerned about my country than ever before. And you hear me talk about it all the time. People say, “Oh, you’re gonna run for president,” this and that. And I said, let me just tell you something. I don’t have a burning desire to run for president. But I do have an overwhelming burning desire to save our country. And if I can get people understanding that the political process that we live in today in America has been weaponized.

That means if you’re on one side, the other side has to be your enemy. And you have to villainize the other side, to create the fervor you need in order to beat them or defeat them. We’re not the enemy, a Democrat and Republican, we are not enemies and should not be. We might be competitors with different ideas of how to fix the same problem. But we’re on the same side. That’s America side. They’re losing that because Washington is making you pick a side. What side are you on Curtis? And you figure you got to pick? Well, I’m not crazy about either one, but I think I would relate more to this than that. Then you push clear to the left or the right. That middle has been evaporating and gone. There’s no place. I think there’s more people today that are unsatisfied with the opportunities and assistance that’s going to be provided for them for the next election. And what we’re going to do is see if there’s enough good people out there that want to re-engage. That’s it.

Tate: No other Democrat currently holds statewide office in West Virginia. Do you have somebody in mind to run as your successor and do you plan to endorse anyone?

Manchin: Well, I haven’t gotten into that because I just made the decision late. The Democrats have one outstanding, I mean, truly an outstanding leader in (Huntington Mayor) Steve Williams running for governor. I’ve known Steve for many, many years. I was in the legislature with him, and I’ve watched him perform and those difficult challenging times in Huntington, and how he’s been able to turn that around the whole economy, that whole vibrancy of that area. So he’s going to be a tremendous worthy opponent, a candidate, I think that most West Virginians could rally around, someone with that stature in that experience level. I really believe that, as far as on my side, the Senate side, haven’t gotten there yet. We’ll look and see if there’s an independent if there’s basically a Democrat, or who we think it’d be best for the state. I would like people to look not at the identity of what party they belong to. But basically, the content and the content of what the person is and what they’re about, and what type of experience level they’ve had. What’s your temperament? You know, if you’re looking at basically trying to find an enemy, rather than trying to find a solution? You’re not going to be very helpful for the people in West Virginia.

Tate: How much was your family involved in your decision to not seek reelection? And especially your wife, Gayle?

Manchin: She’s my Bellwether. She’s my confidant. And we talked about all of this. I started 1982. So what, 42 years, I’ve been my public service, I think it was a calling when I got involved. And my family has sacrificed an awful lot. But the people have been so absolutely wonderful, supportive and generous and kind. And working with me. I couldn’t ever do anything by myself. But I knew as West Virginians, if we were working towards a goal, we could achieve it. And we’ve done an awful lot together, whether it’s as Secretary of State, and we had the SHARES program, saving history and reaching every student, we got young people involved, and how important it was. A 17 year old, if they turn 18 before the election day, they’re able to vote in a primary when they’re 17. People never knew these things. So we got them involved.

We changed the whole process of how we did corporations, streamlining that making it easier for businesses to do business in West Virginia. And then as governor, I think we moved to a whole ‘nother level. We had mine safety coming in, we had basically, the value of a human being is irreplaceable, and you can’t put a price on it. So we did everything to keep them safe. We had horrible mine tragedies, we stuck together. And we created opportunities. We came through the downturn in 2008 and 2009. And the federal government wasn’t sending out billions and billions of dollars of assets and help and money to states back then like they are now.

Over $10 billion has come to the state of West Virginia during COVID. And now I hope they have themselves in position to be able to live within their means. So my family had a tremendous amount. I want to spend a little more time with them. I have two younger grandchildren, two identical seven-year-old boys out in Houston. And I have a little granddaughter out in Houston who is 10. Those are my youngest, the rest of my 10 grandchildren, the other seven are pretty much grown. And I’ve missed an awful lot. And I don’t want to miss a whole lot more.

Federal Data: Coal Falls 21 Percent Year To Date In U.S. Electricity Mix

Coal’s decline may continue, with lower natural gas prices and federal incentives to build more renewables and battery storage.

Coal continues a steep decline as a source of the nation’s electricity.

From January to August, coal fell more than 21 percent from last year. That’s according to the U.S. Energy Information Administration’s Electric Power Monthly Report.

Natural gas, which has been the dominant fuel for electricity for several years, increased more than 7 percent.

Solar posted the most growth year-to-date, increasing more than 11 percent. Wind, however, fell about 3 percent.

Despite the activation of the nation’s first nuclear power plant in a generation in Georgia, nuclear’s share of the nation’s electricity stayed basically flat.

Coal’s decline may continue, with lower natural gas prices and federal incentives to build more renewables and battery storage.

According to EIA data, coal consumption for electricity generation also declined about 21 percent during January to August. Natural gas consumption increased 7 percent during that time.

West Virginia Part Of Nearly $1 Billion Regional Hydrogen Hub

President Joe Biden is set to announce the Appalachian Regional Clean Hydrogen Hub later Friday. The hub, also called ARCH2, will include Ohio and Pennsylvania.

West Virginia is among the states receiving funds from the U.S. Department of Energy to create a regional hydrogen hub.

President Joe Biden is set to announce the Appalachian Regional Clean Hydrogen Hub later Friday. The hub, also called ARCH2, will include Ohio and Pennsylvania.

The region will be eligible for as much as $925 million of the $7 billion in total going to seven regional hubs across the country.

The White House projects 18,000 construction jobs and 3,000 permanent jobs resulting from the investment in the Appalachian hub.

Other hubs will be established in the mid-Atlantic, California, the Gulf Coast, the Upper Midwest, the Great Lakes and the Pacific Northwest.

The Appalachian hub will lean on the region’s abundant supply of natural gas to make hydrogen. Of the other hubs, only the Gulf Coast will also use natural gas, called blue hydrogen.

Most of the others will use renewable energy, including wind, solar and hydro, known as green hydrogen.

The Great Lakes hub will use nuclear power, known as pink hydrogen.

Appalachia’s hub will store the carbon dioxide generated from the production process.

The seven hubs are expected to generate three million metric tons of hydrogen annually, which will be used to decarbonize industrial sectors that produce 30 percent of U.S. carbon emissions.

The initiative is projected to cut 25 million metric tons of CO2 each year, part of the Biden administration’s larger goal of cutting emissions to meet the targets of the Paris Agreement.

“With this historic investment,” said Energy Secretary Jennifer Granholm in a statement, “the Biden-Harris administration is laying the foundation for a new, American-led industry that will propel the global clean energy transition while creating high quality jobs and delivering healthier communities in every pocket of the nation.”

U.S. Sen. Shelley Moore Capito noted that funding for the hydrogen hubs came from the Infrastructure Investment and Jobs Act of 2021. Capito participated in the negotiation of that legislation and was key to its Senate passage.

“I consistently supported efforts to help make this project a reality,” she said in a statement. “I’m thrilled for the ARCH2 Team, and am so proud West Virginia will continue its tradition as an innovative, energy-producing state through a regional hydrogen hub.”

Coal Loses More Ground To Gas In PJM, Nation’s Largest Grid Operator

In what could be a sign of bigger changes happening in the power sector, coal fell to 14 percent of PJM’s power in the first five months of this year.

West Virginia is part of a 13-state regional power grid that’s been a heavy user of coal, but that’s changing.

PJM Interconnection ensures that power reliably gets delivered to 65 million people, making it the largest grid operator in the country.

For the first five months of last year, 22 percent of that power came from coal, 33 percent came from nuclear and 35 percent came from gas.

In what could be a sign of bigger changes happening in the power sector, coal fell to 14 percent of PJM’s power in the first five months of this year. Nuclear stayed about the same, at 34 percent, while gas jumped to 42 percent.

Power demand fell about 4 percent from year to year, according to U.S. Energy Information Administration data. The changes also reflect the rising cost of coal and the declining cost of natural gas.

Preliminary EIA data tracked by the Institute for Energy Economics and Financial Analysis shows that nationwide, coal fell to under 15 percent of total generation in April and May for the first time. It also shows that solar and wind together outpaced coal in the first five months of the year for the first time.