The White House announced a tentative deal Thursday morning to avert a national strike by railroad workers that threatened to further disrupt the already struggling U.S. economy. In a statement, President Joe Biden said the deal would give workers “better pay, better working conditions and peace of mind about their health care costs.” The tentative deal has yet to go to a union vote, but so far it appears the strike has at least been postponed.
On the energy front, the announcement will come as particularly good news for residents in New England states, for whom a prolonged rail strike could prove disastrous. Today, almost everyone is aware of the energy shortages Europe is facing as winter approaches, but fewer are as aware of the problems facing the Northeastern United States stemming from a lack of proper energy infrastructure caused by pipeline politics.
The lack of necessary infrastructure defies common sense
Reuters announced on Wednesday that a looming rail strike could worsen energy shortages in the Northeast by disrupting rail supplies of not only natural gas but also crude oil and refined products. Reuters cites US Energy Information Administration data “showing that heating oil and diesel inventories hit their lowest levels in at least three decades in July.” While pipelines from the Gulf Coast supply much of New England’s oil needs, these volumes must be supplemented by rail to fully meet demand.
The New England region also suffers from a lack of critical pipeline infrastructure. The port of Boston, roughly 300 miles from the fertile Marcellus Shale natural gas region, hosts the annual spectacle of gigantic incoming tankers carrying liquefied natural gas (LNG) produced in other countries, sometimes in Russia.
Northeast states are prevented from importing cheaper U.S.-made LNG by arcane Civil War-era provisions of the Jones Act, which prohibit foreign-flagged vessels — which are virtually all LNG tankers — from transporting cargo between U.S. ports. These states are also unable to bring cheap Marcellus gas to their region for power generation due to the refusal of both the federal government and the state of New York to allow pipelines from Pennsylvania to the Northeast, making New York essentially a land barrier to gas transportation. and frankly common sense.
According to ISO New England, the region generated 46% of its electricity using natural gas during 2021. But during extreme winter freezes, when renewables tend to lose much of their capacity, the grid operator admits it has to resort to using significant amounts of heating oil to generate power. In January of this year, I wrote that heating oil accounted for 24% of the region’s electricity generation on one particularly cold day.
This is a situation that exists for nothing but pure politics. It is completely irrational and unnecessary. So irrational isn’t it Reuters notes that “in July, New England governors wrote a letter to U.S. Energy Secretary Jennifer Granholm warning her that the region faces rising winter heating bills due to a lack of natural gas connections.” If Sec. Granholm has taken any action in response to the letter , two months later it is not obvious.
But then approving and building pipelines doesn’t fit the Biden administration’s Green New Deal agenda and the overarching narrative associated with it, which Sec. Granholm and other Biden officials recite endlessly in response to any question posed to them. If the people of New England need to suffer through the winter for this story to continue, it doesn’t seem like much of a concern.
Friedman lectures Western politicians
It’s a situation so unnecessary and irrational, in fact, that it drew the attention of Thomas Friedman on Tuesday at New York Times
. In the op/ed, Friedman takes the US government and its counterparts in other Western governments to task for “living in a green fantasy world that says we can go from dirty fossil fuels to clean renewable energy with the flip of a switch.”
Friedman further notes that his writings in Times the past 27 years have been dedicated to promoting green energy and mitigating climate change and that it is still “all in — all in — at those ends. But you can’t achieve the goals if you didn’t also want the means.” He then rightly points out that despite all the billions, if not trillions, of dollars invested in renewables in recent years, fossil fuels still accounted for 82% of the global energy mix in 2021, and that it is wrong because the Biden administration is trying to prematurely prevent the production and distribution of fossil fuels in the US when these renewables are unable to adequately replace them.
Mr. Friedman published this article on the very day the White House was holding an ill-timed celebration of the Orwellianly named “Inflation Reduction Act” (IRA) on the South Lawn. The timing was poor given that Tuesday was also the day it was revealed that year-on-year inflation was 8.3% during August, despite a steep fall in petrol and diesel prices over the month. The news sent stock market indexes down about 4% that day, with the Dow Jones falling more than 1,200 points.
Simplified founders of the permit law
The celebration also came amid growing uncertainty over the prospects for congressional approval of a side deal struck between Chuck Schumer, Nancy Pelosi and Joe Manchin on legislation to streamline energy infrastructure approvals. Manchin says the language would address permitting for critical infrastructure, such as pipelines that would transport Marcellus Shale natural gas to New England, rather than compressing or liquefying it and shipping it on rail cars.
But it will not be limited to oil and gas. The language would also be designed to speed permitting for renewable energy infrastructure, such as the thousands of miles of new high-capacity transmission lines that must be built over the coming decade to carry electricity generated from wind farms located on the Great Plains to industry and consumers. markets hundreds of kilometers away. It would also address permits to approve dozens of new hard rock mining operations for a range of critical minerals that enable the renewable energy and electric vehicle industries, which will need to start operating quickly if such an “energy transition” is at all feasible. .
Last week, more than 70 House Democrats signed their opposition to the bill, which has not yet been released. The situation is just as dire in the Senate, where 60 votes will be needed to break any filibuster, and Vermont’s Bernie Sanders has already made it clear he will oppose the language as well. During an interview Sunday, Wyoming Republican Sen. John Barrasso warned Manchin and Schumer not to count on having enough Republican votes to secure passage.
Schumer has promised to attach the language — if it ever materializes — to the omnibus continuing resolution bill, which Congress must pass by Sept. 30 to keep the federal government fully open. But keeping that promise becomes problematic if he and Manchin in the Senate and Speaker Pelosi in the House can’t find enough GOP support for permissive language to offset Democratic defections and overcome a filibuster.
We cannot have adequate and affordable energy without the ability to move it from where it must be produced to where it must be consumed. We cannot move this energy without the right infrastructure to facilitate it. And we can’t have the right kind of infrastructure until and unless the federal government gets out of the way and issues the necessary permits.
None of these pieces are in place right now, there is little prospect that they will be in place anytime soon, and it remains unclear whether anyone in the Biden administration really cares much as long as their preferred narrative remains intact.