Daily on Energy: Russian oil exports fall, gas stove politics, and a geothermal breakthrough

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A busy Tuesday morning: We have been keeping an eye on multiple interesting hearings on Capitol Hill this morning as well as noteworthy news from Russia and Germany. Read on for the latest…

Welcome to Daily on Energy, written by Washington Examiner Energy and Environment Writer Breanne Deppisch (@breanne_dep). Email [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.

RUSSIAN SEABORNE CRUDE EXPORTS SLUMPS TO SIX-MONTH LOW: Russia’s seaborne crude exports dropped over the last four weeks to the lowest point in six months, down to just 3.1 million barrels per day, according to ship-tracking data. That’s a 270,000 bpd reduction from its baseline month in February, and a whopping 780,000 bpd compared to Russia’s peak export flows in May.

Russian seaborne crude shipments to Asia—as well as vessels with no final listed destination— also dropped to 2.77 million bpd in the same four-week period, down to their lowest point in six months. (As Bloomberg notes, most of the vessels with no final listed destination often end up in India.)

The reduction comes after Russia announced it would cut oil exports by 500,000 bpd beginning in August, joining fellow OPEC+ member Saudi Arabia, which extended its own oil export cut of one million bpd. It is unclear whether Russia will cut oil production alongside the reduction in exports, though its limited storage capacity makes that a possibility.

…Meanwhile, Germany added 60% more onshore wind power in the first six months of the year: Germany added 60% more onshore wind capacity in the first half of 2023 compared to the same point last year, wind industry officials said this week, even as they warned that the country must must add far more capacity to reach its 2030 renewable energy target.

Germany installed 1,565 MW of wind capacity between January and June 2023, according to wind industry associations BWE and VDMA Power Systems, compared to 977 MW added in the first half of last year.

The groups anticipate that Germany can reach between 2,700 MW and 3,200 MW of total capacity added this year if the pace of current installations continues.

Still, the groups warned that the growth does not put the country on track to achieve its ambitious wind energy targets by the end of the decade. Germany is hoping to generate at least 80% of its energy mix by 2030 from renewable energy sources, including wind, and the pressure has only increased in wake of Russia’s invasion of Ukraine last year.

Industry officials said today that in order to add new renewable energy resources at a faster pace, Germany must “streamline and tighten” the approval and permitting process for new projects to come online.

IEA WARNS OF ONGOING WINTER RISKS FOR EU GAS SECTOR: The International Energy Agency warned in a new report today that European gas markets are still prone to high prices and supply shocks this winter, as the bloc continues its effort to secure more LNG supplies for the 2023-2024 heating season.

In its latest Gas Market Report, the IEA warned that “key uncertainties remain” for European customers ahead of the coming heating season. “A cold winter, together with a full halt in Russia piped gas supplies to Europe early in the heating season, could easily renew market tensions,” the Paris-based group said.

Should the EU face a colder winter season this year, demand could rise by 30 bcm compared to the 2022-2023 heating season, the IEA said. Uncertainty over demand from Asian buyers also persists, threatening to exacerbate the shortfall.

In the report, the IEA modeled for several different scenarios, including one where the EU manages to secure high LNG imports to make up for lost Russian supplies. Even in that scenario, the report said, much depends on LNG exports to Asia, which prior to Russia’s war in Ukraine received the bulk of chilled gas exports.

Because LNG contracts are secured on a long-term basis—often between 20 and 25 years—the EU has had difficulty competing with other buyers for the fuel and has instead been forced to buy supplies on the spot market for higher prices.

HOUSE REPUBLICANS LAUNCH ENDANGERED SPECIES WORKING GROUP: A group of Republicans led by House Natural Resources Committee Chairman Bruce Westerman of Arkansas and Congressional Western Caucus Chairman Dan Newhouse of Washington are launching a working group aimed at “modernizing” the Endangered Species Act, the 1973 law that many blame for stifling activity on public lands, including mining and drilling efforts.

“There’s no reason we shouldn’t go back and revisit the Endangered Species Act like we do other bills,” Westerman said yesterday, adding that the law essentially “hasn’t been touched since the 1980s” when it was first passed.

Democrats have strongly opposed any efforts to weaken the Endangered Species Act, including a Trump-led effort that was overturned by the Biden administration earlier this year, and any legislative push would likely face significant opposition in the Senate.

NUCLEAR EXPERTS TESTIFY BEFORE HOUSE REPUBLICANS: A group of top U.S. nuclear officials testified this morning before members of the House Energy and Commerce Committee, as lawmakers on the panel are slated to consider a host of new bills aimed at increasing U.S. nuclear power and meeting the Biden administration's goal of reaching net-zero carbon emissions by 2050.

Witnesses include Daniel Dorman, the head of the Nuclear Regulatory Committee; Dr. Michael Goff, the principal deputy assistant secretary for the Energy Department's Office of Nuclear Energy; and Jeffrey Merrifield, the chairman of the Advanced Nuclear Working Group at the U.S. Nuclear Industry Council.

The panel is weighing more than a dozen bills aimed at streamlining U.S. nuclear technology permitting and licensing, requiring the NRC to report regularly on its ability to facilitate efficient, timely environmental reviews on nuclear reactors and applications, and to address the “insufficient compensation and recruitment of employees and other personnel” of the NRC, among other things.

"Nuclear is poised to play a pivotal role in meeting U.S. energy security and carbon reduction goals via the long-term operation of our existing large light-water reactors and deployment of new, advanced plants," Maria Korsnick, the president and CEO of the Nuclear Energy Institute, said in her opening remarks.

"China and Russia are aggressively broadening their geopolitical leverage with nuclear technology export sales. For U.S. companies to succeed abroad, international customers expect U.S. technologies to be deployed here at home," she added. Read more from Breanne here.

GOP LINE OF ATTACK ON GAS STOVES: Rep. Pat Fallon of Texas went on the offensive over DOE’s proposed gas stove rules this morning, arguing that the agency’s recent kitchen appliance regulations are a violation of its authorities under the Energy Policy and Conservation Act. Read more on the hearing here.

STARTUP CLAIMS BREAKTHROUGH IN ENHANCED GEOTHERMAL: Fervo Energy said this morning that it has achieved a major breakthrough in next-generation geothermal technology.

CEO Tim Latimer said the startup has successfully tested a full-scale commercial pilot at its site in Northern Nevada.

“There were dozens of technology challenges that we were able to overcome years ahead of schedule by leveraging advanced technology from the oil and gas industry,” he tweeted.

The company said that the system was able to generate 3.5 megawatts of electricity production, a record for enhanced geothermal power.

It works by drilling horizontal wells deep underground, using technology developed in fracking, and using the natural heat to raise liquid to 191 degrees centigrade.

The energy from the site will help power Google servers in Nevada, under an agreement the tech company signed as part of its efforts to lower reliance on fossil fuels.

The company has also partnered with the DOE and has received $200 million in investments, including recently from Devon Energy.

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