Welcome back to Energy Source, your source for all things energy, coming to you from Houston today. Results season is in full swing, and Shell and TotalEnergies have both reported a sharp drop in quarterly earnings, signaling a potential end to the 18 months of bumper profits for Big Oil following Russia’s invasion of Ukraine. Chevron also reported a near 50% fall in earnings compared to the second quarter of 2022. We can expect ExxonMobil to report tomorrow and BP next Tuesday. In today’s newsletter, I will take a closer look at US President Joe Biden’s renewed efforts to reduce methane emissions and the latest clean energy project to move from Europe to the US. We will also explore the scorching summer temperatures and their impact. Thank you for reading. — Myles
**Much Ado About Methane**
The Biden administration is making strides in its campaign to eliminate methane leaks from the oil and gas industry with the launch of a White House methane “task force” aimed at reducing emissions. The task force, unveiled during the White House’s first methane summit, is tasked with coordinating efforts to detect and eliminate leaks at the federal and state level. Methane is a highly potent greenhouse gas, and the administration is intensifying its fight against it. However, despite the fanfare surrounding the launch of the task force, it remains to be seen whether it will have a significant impact on methane reduction.
The White House’s emphasis on tackling methane leaks underscores its commitment to addressing climate change as President Biden prepares for next year’s electoral showdown and the COP28 summit in Abu Dhabi in November. The Environmental Protection Agency (EPA) is leading the charge in the fight against methane leaks through the implementation of regulations to identify and address leaks in oil and gas infrastructure. Additionally, the Inflation Reduction Act includes a methane fee that will help reduce emissions, although it was weakened during the legislative process.
While environmental groups welcome the Biden administration’s renewed focus on methane reduction, they are calling for even greater action. They contend that declaring a climate emergency and halting the expansion of fossil fuel infrastructure are necessary steps to align with President Biden’s climate and justice goals. On the other hand, the oil industry is demanding a seat at the table and expressing disappointment at not being invited to participate in the methane summit.
The White House aims to leverage domestic action on methane to encourage other countries to take stronger measures. However, the US must demonstrate tangible progress at home before it can effectively push other nations to address methane leaks. (Myles McCormick)
**European Solar Manufacturer Chooses US over Germany**
President Joe Biden’s climate law, the Inflation Reduction Act, continues to attract high-profile manufacturing investments away from Europe. Swiss solar company Meyer Burger recently announced that it is postponing its expansion plans in Germany to establish a solar cell factory in Colorado Springs, thanks to subsidies provided by the IRA. European leaders have criticized the IRA’s tax credits for creating unfair competition and undermining their industry.
Meyer Burger’s decision to manufacture cells in Colorado was driven by the US Treasury’s announcement that developers sourcing both their solar modules and cells domestically would receive an additional 10% bonus tax credit. The company already produces solar panels in Arizona and expects to receive $1.4 billion in subsidies over the lifespan of the IRA. The US has limited solar cell production, only meeting half of its demand with domestically manufactured modules last year. Meyer Burger’s Colorado facility, scheduled to begin production in late 2024, will help fill this gap.
Foreign investors are playing a significant role in the US energy transition, with more than 60% of all cleantech manufacturing projects announced in the US since the passage of the IRA attributed to foreign investors. In response, the European Union has proposed a green industrial plan to allow member countries to match subsidies for projects at risk of leaving the bloc.
However, it remains uncertain whether western countries can compete with cheap imports from Southeast Asia and China in the clean energy industry. A recent report from BloombergNEF suggests that US cell factories may become functionally obsolete in the next five years due to advancements in Asia. Additionally, other parts of the supply chain face barriers such as high costs, equipment shortages, and long ramp-up timelines. Nevertheless, Meyer Burger remains optimistic about the US clean energy market. (Amanda Chu)
**Data Drill**
With extreme temperatures spreading across the US, more than 150 million Americans are under heat alerts. New York is experiencing its first heat advisory of the year, with heat indices reaching 105 degrees Fahrenheit (41°C) over the weekend. These oppressive heat conditions, which have been affecting parts of the southwest for weeks, have broken records in Phoenix, Arizona. The city has experienced a record 26 consecutive days above 110°F this month, surpassing the previous 18-day streak set in 1974. Stay cool and safe!
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