Energy & Environment — How Russian sanctions could hasten energy switch

Today we’re looking at how the Ukraine conflict could accelerate the transition to clean energy, five things you should know about the liquified natural gas industry and why the price of gas has dropped after climbing for weeks. 

This is Overnight Energy & Environment, your source for the latest news focused on energy, the environment and beyond. For The Hill, we’re Rachel Frazin and Zack Budryk. Someone forward you this newsletter? Subscribe here.

Push against Russian fuel may speed transition

Efforts to cut off Russian fuels after the country’s invasion of Ukraine have the potential to speed up the global clean energy transition.   

While nations have been trying in the short term to figure out where to buy oil and natural gas from other than Russia, the invasion could in the long term lead nations, particularly in Europe, to move toward other sources of energy entirely.  

“This is a real chance for Europe in particular to accelerate some things that they have already been thinking about that would be climate-friendly,” said Nathan Hultman, a professor at the University of Maryland who has worked on international climate issues in the Biden and Obama administrations. 

Russia is a major exporter of fossil fuels, and accounts for 40 percent of the European Union’s natural gas supplies and more than a quarter of its oil.   

The story so far: In March, the European Union (EU) released a plan to reduce its dependence on Russia’s natural gas by two-thirds this year and to cut off Russian fuels entirely by the end of the decade. The bloc this week separately proposed a ban on Russian coal imports.   

The plan for reducing reliance on Russian natural gas included a range of policies to promote clean energy rather than climate-warming fossil fuels, though the plan also calls for finding alternate sources of natural gas.   

Specifically, it pushes for more rooftop solar panels and energy efficient heat pumps, calls to speed up permitting for renewable energy projects and promotes the import and domestic production of renewable hydrogen energy.  

What could that mean? “Some of what the Europeans do like more offshore wind, more hydrogen, all of that’s going to lower the cost of those technologies, and that’s going to be a global benefit,” said David Victor, a professor of innovation and public policy at the University of California, San Diego.   

Victor said there is a potential for new energies spurred by the Russian invasion to be jumpstarted, much as solar energy sprang up globally after investments in the United States.  

The EU’s plan calls for replacing about 16 to 32 percent of the amount of gas that it imported from Russia last year with hydrogen by 2030.   

“I think it will have climate ramifications worldwide as we think about a lot of new technologies coming online,” said Joseph Majkut, director of the Center for International Studies Energy Security and Climate Change Program. 

Read more about the situation here.

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5 things to know about LNG and the Ukraine crisis 

The Russian invasion of Ukraine has put a spotlight on the production and trade of liquefied natural gas (LNG), a key part of Russia’s energy leverage in Europe.    

Before the invasion, Russia was Europe’s third largest supplier of LNG after the U.S. and Qatar, accounting for 20 percent of imports, according to the U.S. Energy Information Administration.   

In March, following the invasion, the Biden administration announced a deal to increase LNG exports to the EU to cover about one-third of imports from Russia.    

Here are five things to know about the LNG industry and its significance in the Ukraine crisis.    

It puts the U.S. in a position of strength    

The U.S. already led in LNG exports to Europe in 2021, providing 26 percent of its imports. The U.S. export of these resources to Europe were on the rise even before the Russian invasion. They saw an increase of 3.4 billion to 6.5 billion cubic feet a day between November 2021 and January 2022.    

Russia was set to expand its own LNG footprint before the invasion    

Russia is “a fairly new player” in the LNG industry, Cahill said, but already has two major projects. The first, the Yamal LNG project, is set to carry 16.5 million metric tons of LNG from the port of Sabetta on Russia’s Yamal Peninsula.       

U.S. export capacity is nearly maxed out    

Despite the U.S. stepping up LNG imports to Europe, experts said at a certain point there’s not much more that can be done on the supply side. 

Increased exports to Europe means less for other markets    

In 2020, Asia became the top destination for U.S. LNG exports. The continent saw a 67 percent increase in imports from 2019, according to the EIA.   

Environmental groups aren’t happy    

Advocates for renewable energy have called the Ukraine crisis, and the corresponding spike in gas prices, a further incentive to transition off of fossil fuels.

However, many of them have been dissatisfied with the emphasis on natural gas, which is predominantly methane, one of the most damaging greenhouse gases.    

Read more about the industry here.

Gasoline prices drop eight cents in one week: AAA

The country’s average gasoline price has dropped about eight cents over the past week, and about 13 cents over the last two weeks, according to figures from the American Automobile Association (AAA).  

AAA listed the country’s average price at $4.11 per gallon on Monday, down from $4.19 a week ago and $4.24 two weeks ago.  

The recent drop comes after several countries, including the U.S., announced they would release additional oil from their reserves. 

After the U.S. announced late last month that it would add one million barrels per day to the market over six months — the largest-ever release from its Strategic Petroleum Reserve — analysts told The Hill that the move could result in modest price drops. 

Meanwhile, the recent drops in price come amid increased coronavirus cases in China and subsequent lockdowns, which is decreasing demand.  

Prices for crude oil, from which gasoline is made, have also dropped in recent days. U.S. crude stood at around $95 per barrel on Monday morning, down from as high as $103 per barrel a week ago and even higher in late March. 

Gasoline and oil prices soared following Russia’s invasion of Ukraine, as many buyers rejected Russian barrels, cutting the supply of oil on the market. Prior to that, prices had already been relatively high since production has not recovered to pre-pandemic levels.  

Read more about the drop here.

WHAT WE’RE READING

• Chemours Claims PFAS Chemical GenX Protects Climate (The Intercept) 
• CA utility PG&E avoids wildfire prosecution, pays millions (The Sacramento Bee) 
• Va. House Dems propose $50 payments to drivers in lieu of gas tax suspension (The Richmond Times-Dispatch) 
• HGTV’s ‘Good Bones’ Settles U.S. EPA Action, Accepts $40K Fines For Lead Paint Violations (Deadline) 
• How Texas’ Energy Woes Are Derailing Life In This Houston Neighborhood (HuffPost) 

And finally, something offbeat and off-beat: Happy accidents.

That’s it for today, thanks for reading. Check out The Hill’s Energy & Environment page for the latest news and coverage. We’ll see you tomorrow.

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