Energy Policy

Elon Musk’s Hail Mary In China

May 1, 2024

Tesla was once the undisputed global leader in electric vehicles. In the earlier part of this decade, Tesla’s  Tesla0.0% stock was a certain winner, reaching an all-time high on November 4, 2021. Those days are now distant as the company grapples with mounting competition from international and Chinese rivals, with companies such as BYD dominating the market and the phone maker Xiaomi entering the fray. Chinese-owned Polestar, Volvo, as well as Hyundai, Volkswagen, and others, are presenting tangible challenges to Tesla’s position globally. It is unclear whether Elon Musk’s efforts to reverse this trend appear to be successful.

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LNG Is Harm Reduction For Energy

April 30, 2024

Harm reduction is a helpful policy concept from the narcotics field that can be applied to energy and climate change. It recognizes that drug abuse occurs and seeks to minimize the negative consequences that drug use can bring, ideally improving (or saving) both the life of the user and of society. For example, making naloxone available to first responders helps save lives that would otherwise be lost to drug overdoses, saving families from the loss of a loved one and communities from otherwise being ravaged by multiple drug-related deaths. Across our lives, in medicine and government, sliding scales of harm are acknowledged and inform policy.

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New U.S. Solar Panel Tariff Intensifies Sino-American Green Tech War

April 23, 2024

The Sino-American trade war may be old news, but now a new battlefield is front and center: green tech. During her controversial visit to China, Secretary Janet Yellen made waves by criticizing China’s excess industrial capacity. Secretary Yellen warned the Chinese that retaliatory tariffs would be levied if this wasn’t addressed while simultaneously making the case to the rest of the world that Chinese production threatened nascent industries worldwide. These quarrels have been a hallmark of Sino-American relations for decades. What is novel is that the focus of these complaints isn’t cheap consumer goods but the cutting-edge technologies of the 21st century.

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Israel, Iran, And The Global Energy Tightrope

April 16, 2024

The long-simmering conflict between Iran and Israel erupted this weekend when Tehran launched a massive air strike against the Jewish state. Over 300 drones, cruise, and ballistic missiles were aimed at Israeli airspace on Saturday night, April 13, and early hours of Sunday the 14th. This attack was not a surprise. President Biden warned days before the attack it would likely occur, and Iran itself stated as much after Israel allegedly bombed Iran’s Islamic Revolutionary Guard Corps command building in Damascus, killing senior IRGC generals. Iran ignored and violated the diplomatic immunity of the U.S. Embassy in Tehran and conducted a terror attack on the Israeli Embassy in Buenos Aires, Argentina.

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Biden’s Waffling On LNG Can Hurt Mexico – And The US Too

March 12, 2024

With over half a dozen Liquefied Natural Gas  GAS-0.7%export projects underway in Mexico, stakeholders are watching anxiously to see if US politics will force them to stop. In January, President Joe Biden issued an executive order pausing the approval of new LNG export permits for countries that do not have a Free Trade Agreement with the US. This decision sparked outrage among industry stakeholders and politicians, who viewed it as a political ploy to appease environmentalists and gain their support in the 2024 Presidential election.

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Are Drones Putting Global Peace In Danger?

February 29, 2024

Three recent wars highlighted the use of drones in 21st-century warfare. Houthi and Iranian attacks on Saudi oil infrastructure and military in Yemen brought the war between Iranian proxies and the UAE-Saudi coalition to a stalemate by 2015. Azerbaijan used drones massively against Armenia in 2020 and 2023, and a deluge of drone-focused combat footage flooded the internet after Russia’s February 2022 re-invasion of Ukraine. Ukrainian songs cheering on the Turkish Baykar company’s Bayraktar drone went viral as drones devastated Russian armor. The Kremlin is playing catch-up quite successfully. The Russian military used swarms of drones, many of them Iranian-made, in attacks against Ukrainian civilian infrastructure targets.

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Can Europe Count On US LNG?

February 20, 2024

The US House of Representatives appears to be so dysfunctional that Mike Turner, the Chairman of the House Intelligence Committee, had to go public to respond to a major national security threat from new Russian anti-satellite weaponry. Meanwhile, the other Mike, Speaker of the House Mike Johnson, is delaying a vote on crucial foreign aid to provide means for Israel, Taiwan, and Ukraine to defend themselves.

Energy, specifically the Biden Administration’s liquified natural gas (LNG) future infrastructure development pause/ban, is also on the Congressional agenda. The recent White House decision is one of the worst in a string of failed energy decisions, including the cancellation of the Keystone XL pipeline from Canada’s oil sands to the Gulf of Mexico.

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Joe Biden’s LNG Policy Fiasco

February 8, 2024

Congressional hearings scheduled for February 6 and 8 expose the Biden administration’s massive energy policy blunder. This misstep will impede American energy production, undermine economic growth, endanger the hard-earned U.S. status as the world’s largest liquefied natural gas (LNG) exporter, and threaten Washington’s strategic credibility among friends and foes. The hearings are set to unite a strange assortment of political bedfellows, including liberal democrats determined to support Ukraine and conservative Republicans determined to expand LNG exports. In late January, Energy Secretary Jennifer Granholm announced a series of new measures aimed at the U.S. LNG sector. Projects already completed or near completion, including several large export terminals in Texas and Louisiana, will be put on hold indefinitely.

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The World Is Going Into The Red From The Red Sea Crisis

February 7, 2024

The Houthis, an Iranian-backed proxy terrorist group in Yemen, trained and equipped by the theocratic dictatorship in Tehran, have unleashed chaos on the global supply chain and sent shockwaves through international markets. Now that the US is attacking Iranian targets proxies in Syria and Iraq while the UK and US are bombing Houthis in the Red Sea targets. The cost to the global economy is ticking upwards.

Nearly 30 percent of global container shipping navigates through the Suez Canal via the Red Sea, with 15 percent of global trade passing through the Red Sea, mostly destined for Asia. This traffic includes not only strategic resources like oil and gas but also everyday goods and commodities that keep the global economic engine humming.

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Xi And The Red Sea: Protect Iran Or China’s Economy?

February 2, 2024

A US bombing campaign against Iranian proxies, which hit more than 85 targets in response to a recent drone attack in Jordan that killed three Americans and injured dozens, threatens a regional conflagration. This crisis began after the Houthi attacks out of Yemen on commercial shipping in the Red Sea disrupted the supply chain, raised maritime insurance and transport costs, and threatened a global recession.

Amidst the deluge of international condemnation, one actor’s silence speaks volumes: China’s. Outwardly, China and President Xi Jinping are putting on an excellent poker face. However, this cannot hide China’s unenviable dilemma: its ambitions for global leadership require expanding influence in the Middle East, while simultaneously China’s economy and the legitimacy of the Chinese Communist Party are threatened by Iran’s truculence.

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The U.S. Is Losing the Nuclear Energy Race to Russia and China

January 25, 2024

Even as Russia remains under unprecedented Western economic sanctions, the U.S. finds itself dependent on one Russian vital import: enriched uranium. The U.S. is the largest producer of nuclear energy in the world, but it has allowed its civilian nuclear infrastructure to languish since Jimmy Carter and Ronald Reagan’s presidencies in the 1970s and 1980s.

While the U.S. has coasted on its laurels, with nuclear energy production not changing much in over 30 years, Russia continues its gradual climb upward and exports many reactors, while China is investing heavily in civilian nuclear tech and boosting its atomic power generation at home. Beijing plans to build 24 new nuclear power plants by 2030, bringing the total up to 60, overtaking the U.S. with its old reactor fleet. For comparison, the U.S. has 93 operational nuclear power plants in total, and in the same period as China’s building spree, the U.S. added 2 with none under development now.

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U.S. And China Vie For Copper As Demand And Prices Soar

January 23, 2024

The world is running short of copper, and companies and countries are scrambling. This essential metal, a staple of civilization going back to the bronze age, is the lifeblood of existing energy infrastructure and cutting-edge technology. Unfortunately, it faces a projected supply shortfall by 2025 with projections showing a 20% price jump by May 2027. Annual demand will surge to 36.6 million metric tons by 2031, up from 25.3 million in 2021.

This vulnerability isn’t merely an economic inconvenience; it’s a geopolitical powder keg. The U.S. finds itself in an increasingly high-stakes scramble for global copper supplies against China. If this competition isn’t managed the same way the competition for crude oil is, competition for copper could further destabilize the already rocky international system.

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Electric Vehicles 2024 Tax Changes Are Not Enough For Global Leadership

January 18, 2024

Considering an electric vehicle in 2024? Be aware of policy changes that could negatively affect your purchase. Starting in January, new rules will allow car dealers to give EV buyers their tax credit upfront. However, many EV models, batteries and components from China will no longer be eligible as the Sino-American competition goes green.

The 2022 Inflation Reduction Act, which includes the Clean Vehicle Tax Credit, offers up to $7,500 to new EV buyers. As part of the U.S. strategy to reduce greenhouse gas emissions and bring industries back to the country, this initiative has boosted EV sales, benefiting manufacturers like Tesla and General Motors GM +1.2%. Since 2021, EV sales have tripled, with over 3 million vehicles currently on the roads.

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Houthis & Red Sea Crisis Threaten Global Energy Markets

January 17, 2024

The crisis in the Red Sea is spreading rapidly and is now set to threaten global energy flows unless decisive action is taken. What started with the Houthis, a Shi’a Islamic rebel group in control of large portions of northern Yemen trained and equipped by Iran, attacking shipping in the Red Sea to “support Hamas,” is rapidly turning into a regional conflagration. This emerging conflict is set not only to ignite tensions in the Middle East but also to ravage the world’s oil market.

Already ships from forty-four countries have been attacked by the Houthis in the open sea, prompting the United States and 12 other countries to sign a statement condemning these attacks against commercial vessels. The U.S. and U.K. have begun a joint operation dubbed Prosperity Guardian, aptly named for the consequences of failure, to stop these attacks. This operation is currently striking Houthi targets across Yemen, while the Houthis’ patron, Iran, has escalated by striking at targets in Iraq, including an alleged “Israeli spy base.” The strike killed a well-known Kurdish businessman and his 1-year-old daughter, and seriously wounded his wife and two sons.

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Lithium: Price Collapse Secures Green Transition, Causes Headaches

December 27, 2023

Lithium is earning its current moniker, “white gold,” and all the geopolitical contention that comes with it. When Argentina’s new libertarian president, Javier Milei, announced sweeping reforms, a prominent one was making it easier to export lithium. The U.S. subsequently announced financial support to make that happen. When Namibia conflicted with a Chinese mining company, it was over the export of lithium. After the fall of Kabul to the Taliban, one of the few economic opportunities that emerged was for the export of lithium from the Taliban-ruled Emirate. Worldwide, the scramble for lithium is already happening.

Lithium is vital because of its indispensability in modern green technologies, especially advanced batteries. This scramble for white gold has had enormous benefits. Countries in the developing world have been able to tap into vital new revenue streams even as the price of lithium was pushed downwards. The result should have been a virtuous cycle of cheap and stable commodities for the producers of green technologies, especially electric vehicles (EVs), able to count on cheaper inputs and thus sell at lower prices to supplant the internal combustion engine (ICE).

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Back To Nature At COP28: Restoration Strategies To Combat Climate Change

December 21, 2023

COP 28 was a roller coaster for environmentalists. Going into the conference, despite tensions, breakthrough climate agreements between the U.S. and China gave the forum a sense of hope – if geopolitical rivals could unite behind going green, perhaps the future would be bright after all.

However, a lack of real progress on Article 6 of the Paris Agreement, which should have established the framework and infrastructure for a global carbon market, tempered the optimism. It ended in total disagreement as countries failed to align their views on these fundamental issues.

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The Overlooked National Innovators At COP28

December 6, 2023

COP28, the United Nations climate change conference, has convened under an atmosphere of scandal. The conference, aimed at curbing manmade climate change, has been marred by controversies. Hosted by the UAE, the conference raised eyebrows by dismissing the necessity of eventually transitioning away from fossil fuels while it simultaneously sought oil deals with multiple nations during this environmental summit.

Beyond the media scandals lies a flawed assumption at the heart of the otherwise noble COP28 and the UN’s climate strategy. The UN and COP28 largely hold that the path toward carbon neutrality requires uniform policies and coordination to avoid free-rider problems. This belief that the path toward green energy follows a uniform ladder, traversable only through synchronized steps, overlooks reality.

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Undersea Strategic Minerals Mining : Huge Upside, Environmental Peril

October 30, 2023

Environmental advocates made an impassioned plea to the UN for a novel request: a moratorium on deep-sea mining. This call comes amid both forthcoming international meetings on the subject scheduled for 2024 and the rapid, albeit quiet, explosion of interest in deep-sea mining. Once a topic for science fiction, the International Seabed Authority (ISA) has already issued 30 seabed exploration licenses (with the most – 6 – going to China). This is only the beginning of a race that will upend the energy market and geopolitics.

The seabed contains most of the periodic table, including nickel, cobalt, gold, silver, zinc, lithium, and copper, in potato-sized, polymetallic nodules that sit on the sea floor. These nodules contain many Rare Earth Elements (REEs), which are crucial for emerging green energy production and cutting-edge technology such as semiconductors and AI. These strategic metals are seeing an exponential rise in demand due to the green transition, generating geopolitical competition and financial interests in them just as fierce as oil in the 20th century.

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Germany’s Infrastructure Spending Spree Won’t Solve Its Energy Problems

October 12, 2023

In one of the most important energy deals in its history, Germany is purchasing its single largest power grid thus far. It plans to acquire Dutch state-owned operator TenneT Holding BV for $20 billion Euros. In doing so, it hopes that this will help it realize its goal of 100% renewable energy by 2045 through the nationalization of its power grid and utility system. However, local politics and an inflexible energy policy may turn out to be Germany’s worst enemies.

Germany is still recovering from a self-inflicted crisis which spurs its spending spree. After it halted Gazprom’s gas deliveries in September 2022 due to Russia’s invasion of Ukraine, the largest economy in Europe was forced to scramble for coal and ad-hoc energy arrangements from around the globe to buttress its energy baseload. Electricity prices went up over 500% in 2022 before dropping. GDP is also stagnant, with 2022’s GDP growth lagging at 1.8%. One may think that in the midst of the worst energy crisis since the 1974 Arab oil embargo, Germany would be happy with all of the energy it could get. It was not.

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Earth’s Greener Cities: The Next Frontier Of Geoengineering

September 30, 2023

In the quest to go green, geoengineering has long been an attractive idea at the periphery of climate policy discussion. The tempting notion of engineering humanity’s way out of a putative environmental catastrophe using the same tools that helped generate our global climate crisis, is attractive to many. These proposals also often conveniently sidestep notions of policy reform or responsibility, and involve seemingly outlandish suggestions such as massive mirrors in space or spraying the atmosphere with silver particulates may result in a captivating, although often unhelpful, discussion.

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Nuclear Fusion: Energy Breakthrough or Ballyhoo?

August 16, 2023

After scientists worldwide dispelled the false promises surrounding the purported superconductor LK-99, another scientific breakthrough in nuclear fusion naturally drew scrutiny. Nuclear fusion has been “10 years away” for decades – why should this be any different? This narrative and accompanying headlines mean fusion advances are sometimes lost in technobabble. The latest developments in nuclear fusion may not herald an age of limitless emission-free energy just yet. Still, they represent a concrete step forward for the greenest energy source known to humanity.

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The LK-99 Discovery May Fail, But Hopes of Superconductivity Persist

August 8, 2023

A team of South Korean scientists claims they discovered the first room temperature and ambient pressure superconductor that could revolutionize energy policy. Room-temperature semiconductors under normal pressure would not just enable cheap advanced computing but it would also enable the unlimited transmission of energy without any losses.

The policy and business implications of this are massive. Fields of solar panels in the Sahara could power entire continents, transmission problems made trivial, and climate change rendered far easier to combat.

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Electric Reliability Council Of Texas (ERCOT) Ruling Dims Energy Prospects

July 27, 2023

In February 2021, the Lone Star State’s standalone energy grid buckled under the pressure of unprecedented blizzards. The deregulated Electric Reliability Council of Texas (ERCOT) proved unequal to distributing energy under extreme pressure, resulting in widespread blackouts and wholesale electricity prices going from $25 per megawatt-hour (MWh) to $9,000 per MWh. In June 2023, the Texas Supreme Court revived memories of the storm and courted controversy when it overturned previous rulings and ruled that ERCOT was entitled to the sovereign immunity enjoyed by government actors and thus could not be sued for damages.

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Putin’s Threats To Zaporizhhia Nuclear Power Plant Endangers Energy Transition

July 16, 2023

Carl Sagan once said, “The nuclear arms race is like two sworn enemies standing waist-deep in gasoline, one with three matches, the other with five.” The near-universal recognition of the futility of an all-out nuclear war led to widespread cuts in nuclear armaments since Gorbachev’s perestroika and the Soviet collapse in 1991. Even anti-communist hawks like former President Ronald Reagan pragmatically cut nuclear arms. The US and the USSR cut strategic arsenals from over 30,000 warheads each to approximately 1550 by 2011.

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Russia’s War & China’s Ambition Remake Eurasian Energy Routes

July 12, 2023

Putin’s chef and international villain par excellence, Yevgeny Prigozhin’s half-baked coup against Russia’s Vladimir Putin highlighted just how toxic Russia has become as a global business partner. While Prigozhin ostensibly failed and his power base is being purged, his failed coup revealed the fragility of the Russian state.

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