An explosion at a natural gas terminal last week is impacting the market and President Biden is preparing to visit Saudi Arabia.
This is Overnight Energy & Environment, your source for the latest news on energy, the environment and more. For The Hill we are Rachel Frazin and Zack Budryk. Someone forwarded this newsletter to you? Subscribe here.
Explosion rocks natural gas market
The explosion at Texas’ Freeport LNG natural gas terminal last week has brought further chaos to international energy markets as the US has stepped up to replace Russian gas exports to Europe.
- Experts said that while the facility is offline, it is likely to remain
1.33 billion cubic feet (bcf) of liquefied natural gas (LNG) per day from the market for the next three weeks.
- Before the explosion it had a daily capacity of about 2 bcf.
The new news: On Tuesday, the plant extended the projected shutdown time and said it is targeting a partial restart in 90 days, with full recovery not expected until late 2022.
Freeport, which said no one was injured in the incident, has attributed the blast to a fire caused by the rupture of an over-pressurized pipeline.
This “will contribute to a possible tightening of the market as it coincides with some Asian and South American buyers entering the market for volume,” said Eugene Kim, research director for American Gas at energy consultancy Wood Mackenzie.
The incident, which is still under investigation, comes at a crucial time for US natural gas production in the international market.
- The European Union sanctioned Russia’s gas industry in response to the Russian invasion of Ukraine.
- As a result, European nations are increasingly dependent on the US to make up the difference.
- And the EU’s final deal on an embargo on Russian oil, reached in early June, is likely to push demand further.
Natural gas prices collapsed Tuesday after the deadline was extended. American natural gas fell about 16 percent to $7.22 per million British thermal units.
Meanwhile, European gas prices rose about 21 percent.
Mike Sommers, president and CEO of the American Petroleum Institute, said at a press briefing Tuesday that other LNG producers may be able to fill the gap even without the Freehold terminal.
However, Frank Macchiarola, the American Petroleum Institute’s senior vice president of policy, economics and regulatory affairs, added that Freeport is “a significant location” for LNG production.
“That’s about 17 to 18 percent of our current capacity, so certainty is important in the tight market we’re currently facing,” he said.
Read more here.
INVITATION TO THE VIRTUAL EVENT
Principal Profit: ESG by The Hill Summit – Wednesday, June 15 at 1:00 p.m. ET
ESG investing is becoming increasingly popular among investors who want to make capital decisions based not only on likely financial returns, but also on investing in companies that are believed to create social wellbeing. Join The Hill to discuss the growing demand for ESG and how it is changing the business and investment landscape. Former SEC Chairman Harvey Pitt, Rep. John Rose (R-Tenn.), Savita Subramanian of Bank of America Merrill Lynch. Sign up now
Biden travels to Saudi Arabia amid high gas prices
President Biden will visit Saudi Arabia in July on a trip that includes a meeting with the Saudi crown prince Mohammed bin Salmana senior administration official told reporters Monday night.
- The announcement that the President would meet Mohammed had been awaited for weeks and was scrutinized by human rights activists and tacitly approved by Democratic allies in Congress.
- The meeting is part of a broader trip to the Middle East taking place July 13-16, where the president will also travel to Israel and the West Bank before flying to Jeddah for a meeting of the Gulf Cooperation Council.
The senior official said Biden’s meeting with the crown prince will come as part of an engagement with “over a dozen leaders,” including Saudi King Salman, the kingdom’s official leader.
The energy angle: The meeting comes as gasoline prices continue to rise, hitting a national average of $5 in the past few days. Though presidents typically have little leverage over gas prices, the situation has pressured the Biden administration as consumers feel pain at the pump.
During a White House news briefing Monday, ahead of the trip’s official announcement, White House Press Secretary Karine Jean-Pierre said a trip would be about “diplomacy” and “bring stability to the Middle East region.” .
- When asked more about energy, she said, “To view the engagement with Saudi Arabia on energy security as a request for oil is simply wrong and a misunderstanding of both the complexity of this issue and our multifaceted discussions with the Saudis.”
- But she also said that the government is in talks with the Saudis about oil. She said that given her role in OPEC+ and as a major exporter, “Of course we’re also discussing energy [the] The Saudi government as we do with oil producers around the world.”
The foreign policy contribution: The president’s encounter with Mohammed marks a stark reversal of Biden’s campaign promise to make the kingdom an “outcast” and make her “pay the price” for the dissident’s gruesome assassination
Saudi writer and Washington Post contributor Jamal Khashoggi in 2018.
Biden authorized the release of a US intelligence report concluding that Mohammed had approved a plot to “capture or kill” Khashoggi – who was lured to the Saudi consulate in Istanbul, where he was killed and dismembered. The President imposed bans on dozens of Saudi officials over the writer’s death.
The senior official said Monday night that while the government was demanding accountability for Khashoggi’s death, it was not attempting to “sever” ties with the kingdom entirely. The official called the crown prince “critical” of extending a ceasefire deal until at least August in Yemen’s disastrous seven-year civil war.
Read more from The Hill’s Laura Kelly here.
POLLUTION LOWERS GLOBAL LIFE EXPECTANCY, REPORT FIND
Particulate air pollution reduces life expectancy globally by 2.2 years compared to a hypothetical world that meets international health guidelines, a new report says.
- Global exposure to particulate matter patterns — PM 2.5, or particles 2.5 microns in diameter or less — has an impact equivalent to that of smoking, more than three times that of alcohol consumption and being unclean, according to 2022 by the University of Chicago water’s air quality index.
- The impact of this type of pollution on life expectancy is six times that of HIV/AIDS and 89 times that of conflict and terrorism, researchers observed.
“It would be a global emergency if Martians came to Earth and sprayed a substance that would cause the average person on the planet to lose more than two years of life expectancy,” says Michael Greenstone, Index co-founder and economics professor The University of Chicago’s Energy Policy Institute said so in a statement.
“This is similar to the situation that exists in many parts of the world, except that we are spraying the substance and not some space invaders,” Greenstone added.
Despite the fact that the economy suffered significantly in the first year of the coronavirus pandemic, average PM-2.5 levels remained largely unchanged compared to the previous year, the researchers pointed out. There is now mounting evidence that even low levels of air pollution can harm human health, the authors added.
Read more from The Hill’s Sharon Udasin here.
ON TAP TOMORROW
- The Senate Environment and Public Works Committee will hold a hearing to consider a number of bills aimed at protecting coastlines and habitats
- The House Agriculture Committee will hold a hearing entitled “The Role of Climate Research in Supporting Agricultural Resiliency.”
WHAT WE READ
- Wind and solar power ‘save’ Texas amid record heat and power demand (CNN)
- Wall Street Firms Face W.Va Boycott Over Alleged Fossil Fuel Bias (Politico)
- Exclusive: OPEC expects global oil demand growth to slow in 2023, sources say (Reuters)
On the frontlines of climate change, tough lives get tougher (The New York Times)
- “Insane”: UN chief criticizes new financing for fossil fuels and warns of climate chaos (CNBC)
And finally something unconventional but kind of on-beat: Elephants are apparently not people.
That’s it for today, thanks for reading. Visit The Hill’s energy and environment page for the latest news and reports. we will see you tomorrow
READ THE FULL VERSION HERE