Daily on Energy: The small Caribbean island giving New England gas to survive winter

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NEW ENGLAND’S RELIANCE ON…TRINIDAD: The U.S. imports very little liquefied natural gas anymore, but what it does bring in has in recent years come almost exclusively from one single source that would surprise most: Trinidad.

The continental United States imported 20.7 billion cubic feet of LNG (notably, just a fraction of the roughly 100 billion bcf per day of current U.S. dry gas production capabilities) of LNG between January and November of last year, according to the Department of Energy’s recent monthly LNG report.

Every molecule came from the small Caribbean nation and was received at New England’s two Massachusetts import terminals.

Why New England: New England’s infrastructure limits mean it can’t get all the pipeline gas it could use during periods of high demand, and so it sometimes turns to foreign LNG imports to make up for it both for power generation and heating.

The largest monthly volumes came during the cold periods of January and February, although the region did receive shipments over the summer. The region imported no LNG in September and October and received 1.2 bcf in November. December’s figures are outstanding.

Why Trinidad: It’s the largest oil and gas producer in the Caribbean and was ranked 11th in IHS Markit’s list of global exporters in 2021.

It’s also significantly closer in proximity to the U.S. than other major suppliers, such as Qatar, Australia, and Indonesia.

The U.S. import market is substantially smaller than it used to be. Annual LNG imports have fallen steeply from their peak at 771 bcf in 2007 to just 21 bcf in 2021, the last year for which full data is available. But even at the 2007 peak, Trinidad was the source of well over half of imports, with the rest coming from sources in the Middle East.

Why not gas from home: Some gas industry players have raved about how easy it would be to move gas from the Cove Point LNG terminal in Maryland, or Elba Island in Georgia, up the East Coast and into New England, but the Jones Act limits the region’s ability to get homegrown LNG.

New England governors, worried about supply shortages this winter, had urged Secretary Jennifer Granholm during the summer to explore the possibility of suspending the Jones Act for the winter, although she said the law doesn’t provide for a blanket waiver of the kind they sought.

Welcome to Daily on Energy, written by Washington Examiner Energy and Environment Writers Jeremy Beaman (@jeremywbeaman) and Breanne Deppisch (@breanne_dep). Email [email protected] or [email protected] for tips, suggestions, calendar items, and anything else. If a friend sent this to you and you’d like to sign up, click here. If signing up doesn’t work, shoot us an email, and we’ll add you to our list.

EXXON SMASHES ANNUAL PROFIT RECORDS IN 2022: Exxon Mobil posted a $56 billion profit for 2022 this morning, smashing annual records for Western oil majors set during a year when profits across the board had already soared to all-time highs in the wake of Russia’s invasion of Ukraine.

Exxon, the largest U.S. oil company, recorded profits of $12.75 billion in the fourth quarter of the year, up from $8.9 billion during the same period during 2021. In total, profits for 2022 surpassed its previous record, set in 2008, by more than $10 billion.

In a statement, Exxon CEO Darren Woods said the company “benefited from a favorable market” and praised its decision to continue investing in fossil fuels and production even despite high prices and market uncertainty. “We leaned in when others leaned out,” he said. “We will continue to invest in our advantaged projects to deliver profitable growth, help meet society’s growing needs, and reduce emissions in our operations, while providing innovative solutions that help others reduce theirs.”

AND MARATHON TOPS PROFIT ESTIMATES AMID HIGH DEMAND: Meanwhile, Marathon Petroleum reported Q4 profits of $3.32 billion as demand soared in the final months of 2022 for refined products.

The company posted fourth-quarter profits of $7.09 per share, surpassing Wall Street analysts’ expectations, which were for around $5.67 per share, according to data from the firm Refinativ.

PHILLIPS ALSO POSTS SKY-HIGH Q4 PROFITS: The Houston-based refiner Phillips also reported soaring Q4 profits this morning amid ongoing fuel demand. The company posted earnings today of $1.9 billion, or $3.97 per share, for the fourth quarter of 2022, compared to $1.3 billion, or $2.88 per share, in the last three months of 2021.

SIX STATES AGREE ON COLORADO RIVER PLAN – CALIFORNIA SOLE HOLDOUT: Six out of seven Western states that rely on the Colorado River for water agreed yesterday to drastically reduce their water usage in the basin, a step that comes months after they missed a mid-August deadline set by the federal government for them to do so, which threatened to trigger potentially mandatory cuts set by U.S. officials.

Negotiators from the six Western states—Arizona, Nevada, New Mexico, Colorado, Utah, and Wyoming––said yesterday they have reached a framework for an alternative to the federal cuts. That plan would result in a total of 2 million acre-feet of cuts from the river’s Lower Basin, with smaller reductions also ordered for the Upper Basin. (For context, each acre foot is enough water to supply two to three U.S. households for an entire year.) It would also seek to create a “protective buffer” for both the river’s Lake Mead and Lake Powell reservoirs.

Both Mexico and California were included in the proposal, though neither had signed onto it as of Monday. California, which receives the largest amount of water from the river, said it would release its own plan.

The Colorado River supplies water to 40 million people and helps support the area’s $5 billion-per-year agriculture industry, making any plans to reduce its water use highly contentious. The plan put forth by the six Western states is not final, and negotiations over how to restrict Colorado River use are ongoing. Read more from the Associated Press here

UTILITY SHUTOFFS SOARED LAST YEAR FROM HIGH ENERGY COSTS – NEW STUDY: U.S. utility providers in roughly 30 states were forced to cut off electricity last year more than 1.5 million times, thanks to soaring costs, according to a new study of states where such data was publicly available.

The amount of electric shutoffs was a 29% increase from the previous year, according to the study from the Center For Biological Diversity, Energy and Policy Institute and BailoutWatch. Meanwhile, gas disconnections climbed by a whopping 76% during the same period.

On average, consumers paid 14% more for power in 2022, and 19% more for natural gas. According to data published by the National Energy Assistance Directors’ Association, the high prices caused more than one in six U.S. households to fall behind on their utility bills last year.

“Families already reeling from inflation, the pandemic and climate disasters shouldn’t also have to face skyrocketing utility bills beyond their ability to pay,” Selah Goodson Bell, with the Center for Biological Diversity’s energy justice program, told Bloomberg. Read the full study here.

GM JOINS THACKER PASS LITHIUM VENTURE: General Motors will join Lithium Americas to help finance the latter’s Thacker Pass lithium project in Nevada.

GM will make a $650 million equity investment in Lithium Americas, the two announced today, saying it represents the largest investment made by an automaker to produce battery raw materials.

The lithium carbonate mined from the project is estimated to support production of up to 1 million electric vehicles per year, and GM will receive exclusive access to the first phase of production from the mine, which is expected to begin operation in 2026.

Automakers are doing what it takes to lock in contracts with U.S. mining projects and others that meet the Inflation Reduction Act’s sourcing requirements for the consumer clean vehicle tax credit, or else miss out on the full subsidies.

GM’s outlook: The legacy manufacturer announced fourth quarter earnings this morning totaling $43.11 billion, up 28% year over year.

The Chevrolet Bolt EV saw record sales in 2022, and CEO Mary Barra forecast a “breakout year” for GM’s electric vehicle platform, with plans to introduce the Chevrolet Silverado EV, Blazer EV, and Equinox EV.

EPA BLOCKS PEBBLE MINE UNDER CLEAN WATER ACT: The Biden administration announced today that it is blocking the major gold and copper mine from advancing in Alaska after determining it would have detrimental effects on Bristol Bay, home to world-class salmon fisheries.

The EPA rejected developers’ 2020 plan to establish the Pebble Mine by prohibiting the routine discharge of dredged or fill material in nearby watersheds as was provided in the mine plan. Its final determination extends the prohibition to any similar mine plan that would seek to exploit the reserves in the broader Pebble mineral deposit.

Developers also seek to mine the area for molybdenum, a metal used in wind turbines.

The proposed project would lead to a permanent loss of some 8.5 miles of salmon streams, as well as supporting streams and 2,100 acres of wetlands and other waters, said EPA Assistant Administrator for Water Radhika Fox.

Administrator Michael Regan emphasized the decision would protect jobs and the “economic engine” that is Bristol Bay, which he said is the world’s most productive wild salmon ecosystem. It’s only the third time in 30 years that EPA has used this particular Clean Water Act authority to block a project, Regan said.

Developers behind the project could submit a new mine plan to the Army Corps of Engineers for approval, Fox said, so long as its impacts wouldn’t be “similar” to its 2020 mine plan or cover the same area.

Pebble Mine was unable to secure final permitting for the project during the Trump administration. The Corps similarly determined that the project’s plan to discharge material couldn’t fly and denied its permit but did not pursue a permanent block against the project.

The other Alaska project: The Bureau of Land Management is expected to announce a supplemental environmental impact statement today for ConocoPhillips’ Willow Project.

The Rundown

Washington Post This group is sharpening the GOP attack on ‘woke’ Wall Street

E&E News ‘SCOTUS bait’: Legal battle over Calif. waiver begins

New York Times ‘Recession resilient’ climate start-ups shine in tech downturn

Calendar

WEDNESDAY | FEBRUARY 1 

9:30 a.m. 2167 Rayburn. The House Transportation and Infrastructure Committee will hold a hearing on supply chain challenges facing the U.S. transportation sector as it seeks to accelerate investments in EV battery production, manufacturing, and build out charging infrastructure. Learn more here.

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