After 18 Years, Transmission Line Breaks Ground
A transmission line that was stuck in permitting limbo for 18 years finally broke ground Tuesday, E&E News’ ENERGYWIRE (subscription) reports.
What’s going on: “Interior Secretary Deb Haaland and Energy Secretary Jennifer Granholm traveled to Wyoming for a ceremony to celebrate work on the 732-mile TransWest Express Transmission project. The line will add 3,000 megawatts of transmission capacity, sending electrons from what is set to be the country’s largest onshore wind project in Wyoming across four states for use in California, Arizona and Nevada.”
A milestone: The project—which was initiated by Arizona Public Service Co. in 2005—is a “‘momentous milestone’” that advances the Biden administration’s objective of constructing 25,000 megawatts of renewable, onshore power sources on public land by 2025, Haaland said.
Permitting reform needed: “It’s a milestone that came after nearly two decades of work, a reminder of how long it can take major grid projects to go through the federal permitting process even as the administration says construction is necessary. Granholm said the Biden administration is committed to making sure future transmission lines don’t face the same roadblocks as TransWest Express.”
- Because it crosses public and private land in multiple states, the TransWest Express project required green lights from federal, state and county governments, as well as private approvals.
- Added Granholm, “‘It took way too long to get this permitted.’”
Meeting goals: To meet “projected levels of renewables,” the U.S. will need to expand its high-voltage transmission network by more than 50% in the next 12 years, according to the Department of Energy.
- “The bipartisan infrastructure law of 2021 included $15.5 billion for DOE to spend on transmission infrastructure. The Biden administration has said future studies will identify key corridors where it can exercise backstop authority to sidestep state opposition to new power line routes.”
What’s next: The $3 billion TransWest Express line is expected to begin construction this year and be fully complete by the end of 2028.
EPA Deluged with Tailpipe Rule Comments
The Environmental Protection Agency has received tens of thousands of comments—including some from the NAM—on two proposed tailpipe rules for vehicles, setting up what could be “months of heated debate over the future of U.S. transportation,” E&E News’ CLIMATEWIRE (subscription) reports.
What’s going on: In April, the agency set forth two draft regulations—one for cars and another for trucks—which would “set strict enough limits on tailpipe pollution that manufacturers would be compelled to more quickly shift their production away from vehicles that run on fossil fuels and toward those that are powered by batteries, fuel cells and other … systems.”
- The regulations would apply to cars and trucks manufactured starting in model year 2027.
Why it’s important: The proposed mandates depend on a steep, imminent spike in the construction and availability of electric-vehicle charging stations, the NAM told the EPA this month in response to the truck proposal.
- The national electric transmission infrastructure would have to grow some 57% by 2035 to reach the EPA’s goals regarding light-, medium- and heavy-duty trucks, according to the Department of Energy’s draft National Transmission Needs Study from February 2023, NAM Vice President of Energy and Resources Policy Brandon Farris said.
- “[A]t the historical pace of approximately 1% annual growth for these projects, the transmission system would require more than half a century to achieve the goals the administration hopes to achieve in little more than a decade,” he continued.
What should be done: The draft rules should be revised so that they are technology-neutral, Farris added, “allowing market forces to determine which technologies work best for specific sectors.”
- The rules should also “recognize the realities and limitations of current infrastructure, even as manufacturers urge administration officials and congressional leaders to prioritize policies that would strengthen transmission systems and infrastructure, including critical permitting reforms,” Farris concluded.
What’s next: The EPA expects to receive upward of 100,000 comments on the proposed laws and said that processing them all will likely “take weeks.”
- The public comment period for the draft cars rule ends July 5.
Panama Canal Drought Hits Shippers
The Panama Canal—which “handles about one-third of Asia-to-Americas seaborne trade”—is at its lowest level in more than 100 years, a development that could jeopardize global supply chains, according to The Wall Street Journal (subscription).
What’s going on: “The government agency that manages the artificial waterway implemented travel restrictions in May to avoid ships running aground, and since then, some large vessels have had to reduce container loads by roughly one-quarter. Further restrictions could go into effect in late June, authorities say.”
- In the first five months of 2023, rainfall in the canal area was 47% below the historical average.
- The canal, which opened in 1914, depends heavily on rainfall to replenish the tens of millions of gallons of water that flow into the sea each time a ship goes through the canal’s locks.
Why it’s important: “Disruptions in the canal’s operations would hurt Southern Hemisphere exporters and importers in the north. Brazilian meat, Chilean wines and bananas from Ecuador are routinely shipped across the canal, along with copper from Chile and liquefied natural gas from the U.S. Gulf Coast.”
- Panamanian officials are trying to avoid a repeat of the problems that afflicted the Suez Canal in March 2021, when a large containership blocked that waterway for nearly a week, costing billions of trade dollars.
The fallout: “In addition to cutting cargo loads, shipowners are adjusting to Panama Canal restrictions by moving containers to trains to ensure safe passage through locks. In some instances, boxes are unloaded from ships on the Pacific Ocean side of the canal, moved by rail and returned to ships before they continue their voyage through the Atlantic Ocean.”
- The Panama Canal Railway has seen a 20% increase in cargo volume as a result of the drought.
- Shipowners are responding by charging an average of $600 more per box on vessels that cross the canal.
- The daily Asia–U.S. East Coast freight rate was $2,400 per container in May, according to Freightos Baltic Index, but it is expected to rise this month partly due to the drought surcharge.
What’s next: Large container shipping companies “have no plans to divert ships away from Panama”—for now. “[E]xecutives said it could happen if drought conditions persist.”
U.S., China Restart High-Level Discussions
During meetings this week, the U.S. and China attempted to restore high-level bilateral interactions and reverse the tension growing between the two nations, according to The Wall Street Journal (subscription).
What’s going on: “During two days of meetings in Beijing, [U.S. Secretary of State Antony] Blinken and senior Chinese foreign-policy officials agreed to more high-level talks, continuing a thaw after months of near-frozen contacts.”
- “They also promised to find common ground on increasing flights between the two countries and combating the flow of fentanyl into the U.S.”
The background: In recent months, U.S.–China relations have been on a downward trend, following U.S. detection of what the Biden administration said was a Chinese spy balloon.
- Last year, the U.S. imposed restrictions on the export of certain advanced technology to China and is expected to issue new limits on U.S. investments overseas.
- China has taken issue with these moves, as well as with U.S. support for ally Taiwan.
- Some 67% of Americans say China is a “major threat” to the U.S., according to a Pew Research Center questionnaire. That’s up from 43% in 2015.
Topics discussed: During his visit, Blinken raised a number of issues, including tensions over Taiwan and North Korean aggression. He also discussed China’s trade-distorting practices, human rights violations, imprisonment of U.S. citizens and position on Russia’s war against Ukraine, according to POLITICO.
- The meetings also touched on areas of mutual interest, including climate, macroeconomic stability, food security and public health.
What didn’t happen: Blinken’s visit to China—the first by a U.S. cabinet member in more than four years—did not produce substantive advancement on the above issues. However, the meeting served as a starting point for future high-level communications.
- Officials did not address Chinese intelligence movements in Cuba or the establishment of “a military communication channel between the countries to address frequent incidents around Taiwan … a key goal of the Biden administration.”
Business with China: “Blinken said he also met with members of the U.S. business community on Monday, many of whom expressed a desire to continue to grow their operations in China,” according to POLITICO.
- “He said a full decoupling of the American and Chinese economies would be disastrous, pointing to record trade between the two last year, but said the U.S. would continue to take steps to make American supply chains more resilient and deny China technologies that threaten U.S. national security.”
A Tentative Labor Deal for West Coast Ports
Unions and their employers at 29 West Coast ports have reached a tentative deal resolving a labor crisis that has lasted almost a year, reports CNBC.
No details yet: While the deal will last six years and cover all 29 ports, no details have been released yet.
- “We are pleased to have reached an agreement that recognizes the heroic efforts and personal sacrifices of the ILWU workforce in keeping our ports operating,” said Pacific Maritime Association President James McKenna and International Longshore and Warehouse Union President Willie Adams in a joint statement.
Ramping back up: Workers at several ports had engaged in slowdowns or had not shown up for shifts over the course of the past two weeks, leading to delays and congestion.
- “The ports, which are currently running at 70% capacity, will need several days to clear out the containers once a full labor force is back to work.”
The NAM says: “Manufacturers welcome last night’s announcement of a long-term deal between the #ILWU and #PMA. Certainty at America’s West Coast ports ensures reliability in domestic shipping lanes and keeps manufacturing in America competitive and thriving,” tweeted NAM President and CEO Jay Timmons.
- “@POTUS understands that manufacturing is the backbone of our economy, and @ShopfloorNAM thanks President Biden for his leadership in bringing these parties back together to reach a final agreement that eliminates the threat of additional supply chain disruptions.”
Manufacturing Production Inches Up
Manufacturing production crept up 0.1% in May, following a gain of 0.9% in April, according to new data from the Federal Reserve.
Durable vs. nondurable: While durable goods production rose 0.3%, the nondurable goods sector declined 0.1%.
Economic context: Since April of last year, when manufacturing posted its highest production numbers since the end of 2018, output in the sector has declined 0.7% due to geopolitical tensions and a shakier economy.
What’s next? Production is forecasted to fall 0.6% in 2023 but expand 1.2% in 2024.
Mixed data: About half of the manufacturing sectors measured saw a decline in production, and half saw an increase. Those on the upswing included:
- Aerospace and miscellaneous transportation equipment (up 2.5%);
- Petroleum and coal products (up 1.7%);
- Electrical equipment, appliances and components (up 1.4%); and
- Nonmetallic mineral products (up 0.9%).
China’s Cyberattacks Are “Defining Threat”
China’s cyber-spying capabilities are “an epoch-defining threat,” the top U.S. cybersecurity official warned this week, according to CNBC.
What’s going on: Aggressive cyber actions by China are “‘the real threat that we need to be prepared for,’ Cybersecurity and Infrastructure Security Agency Director Jen Easterly said at an appearance Monday at the Aspen Institute in Washington, D.C.”
- Easterly was answering a question about the recent discovery of Chinese cyberattacks on the U.S. military and the private sector, by a group dubbed “Volt Typhoon.”
Why it’s important: The U.S. should expect groups like Volt Typhoon to try to target pipelines and railways, Easterly said, adding, “It’s going to be very, very difficult for us to prevent disruptions from happening.”
The backdrop: Tensions have escalated between China and the U.S., leading to greater concern about attacks.
- “Fending off cyber threats from China and Asia has become a top priority for the U.S. government, which has begun to describe in clearer and blunter terms the links between the Chinese government and myriad hacking groups.”
ILWU Canada Workers Vote for Strike
More than 99% of International Longshore and Warehouse Union Canada workers whose jobs are critical to West Coast port operations voted in favor of a labor strike, according to CNBC.
What’s going on: “The vote, which took place on June 9–June 10, occurred during a 21-day cooling-off period between the British Maritime Employers Association and ILWU Canada. Negotiations with the Federal Maritime Conciliation Service started on March 28. Two mediators appointed by the Canadian government were overseeing the discussions that ran through the end of May.”
- June 24 is the soonest a strike would occur.
In the U.S.: The Canadian development—which threatens the Port of Vancouver, the largest port in Canada—comes as tensions rise in the U.S. between the ILWU and the Pacific Maritime Association, which have been negotiating a labor contract since May 2022.
Why it’s a problem: About 15% of container trade that comes through the Port of Vancouver is destined for or coming from the U.S.
- “Canadian shippers could shift trade to the neighboring Port of Seattle, but the Port of Seattle has been significantly impacted by labor slowdowns and work stoppages which led to its closure on Saturday as the ILWU in the U.S. continues to negotiate with the Pacific Maritime Association for a new contract, with wages and automation proving to be sticking points.”
Why it’s important: The events in Canada are “a significant blow to operations on the West Coast,” ITS Logistics Vice President of Drayage and Intermodal Paul Brashier told the Journal.
- “These ports are vital to Midwest manufacturers and the auto industry, as most transpacific freight enters at these points prior to interlining to rail and going to inland rail ramps in Chicago and other major markets. More significant is that these ports were used as relief valves to avoid ILWU activity.”
Our view: The NAM has been recommending White House intervention in the U.S. labor dispute for many months.
- “[With] the dramatic impact of port closures, your leadership and intervention are needed,” NAM President and CEO Jay Timmons told President Biden last week. “Manufacturers respectfully encourage you to bring the parties back together and reach a final agreement that reopens our West Coast ports and eliminates the threat of additional supply chain disruptions.”
Could Rail Help Solve the Grid Problem?
The U.S. railway system may be a solution to serious energy problems, according to ENERGYWIRE’s E&E News (subscription).
What’s going on: During extreme weather events, “trains could dispatch batteries across the country, preventing blackouts without expensive new energy infrastructure,” according to a new Department of Energy study cited by the news source.
- The fix would be less expensive than constructing either new transmission infrastructure or standalone battery storage for extreme-weather occurrences, researchers found.
Why it’s important: Approximately two-thirds of the U.S. is at risk of blackouts this summer, the North American Electric Reliability Corporation warned recently.
Power by rail: Just one train could carry enough battery storage to supply 50,000 households with energy for 12 hours, researchers found.
- “The reach of the country’s 140,000-mile rail network also makes it attractive from a grid perspective, since it extends into dense population centers and transmission-congested regions. That reach has already prompted DOE to identify rail rights-of-way as potential hot spots for a transmission buildout.”
However … While mobile battery storage looks promising, it needs further exploration on a larger scale, one source told E&E News.
Energy Department Invests in Battery Manufacturing Plant
The Department of Energy will give an $850 million loan to battery cell developer KORE Power for the construction of a domestic battery manufacturing plant, The Hill reports.
What’s going on: The DOE on Friday announced the conditional loan to build “KOREPlex” in Buckeye, Arizona, as part of a broader strategy to “strengthen the U.S.’s supply chain for batteries for electric vehicles as well as for energy storage,” according to The Hill.
- It’s a milestone in the Biden administration’s objective to make half of all new vehicles sold in the U.S. in 2030 zero-emissions, according to the DOE.
Why it’s important: Once operational, the facility is expected to produce enough battery-cell storage to power more than 28,000 electric vehicles annually, the DOE said.
- The project is slated to create as many as 700 temporary construction jobs and 1,250 permanent operations positions.