MDN’s Energy Stories of Interest: Thu, May 15, 2025 [FREE ACCESS]
MARCELLUS/UTICA REGION: Cleveland-Cliffs shifts away from hydrogen project at Ohio steel mill; NATIONAL: U.S. electricity prices continue steady increase; Bearish storage build, weak demand weigh on market as natural gas futures crater; As hydrogen market evolves, best uses will focus on cost, sustainability; Liability for climate change – an inequitable economic disaster; US to speed up oil and gas land parcel reviews for federal leasing; Why the proposed “phaseout” of IRA subsidies is unacceptable; INTERNATIONAL: Crude slips after inventory surge; Aramco pens $90B deals with US companies; OPEC+ makes careful start to supply revival; Europe will struggle to wean itself off Russian gas; BP’s chief U.S. economist worries China is winning the global energy war; GALACTIC: Webb’s Titan forecast – partly cloudy with occasional methane showers.
MARCELLUS/UTICA REGION
Cleveland-Cliffs shifts away from hydrogen project at Ohio steel mill
RBN Energy
Cleveland-Cliffs, a steelmaker, is significantly modifying a decarbonization project at its Middletown, Ohio plant, initially supported by a $500 million Department of Energy grant under the Biden administration, due to shifting energy priorities under the Trump administration, according to CEO Lourenco Goncalves. The original plan involved replacing a blast furnace with a 2.5 million tons per annum hydrogen-ready direct reduced iron plant and two 120-MW electric melting furnaces, requiring approximately 135 million kg of hydrogen annually, equivalent to the output of a 700 MW green hydrogen facility. However, Goncalves announced that the project’s scope will change to a lower-cost initiative, relying on more economical fossil fuels instead of large-scale hydrogen use, with the existing blast furnace being relined rather than replaced. This shift follows a reported quarterly loss exceeding expectations, leading to a 15.9% drop in Cleveland-Cliffs’ shares, alongside plans to idle some facilities and reduce hours at others. [MDN: As we have said for months (maybe over a year), we don’t see the demand materializing for large new volumes of hydrogen. This story proves our point.]
NATIONAL
U.S. electricity prices continue steady increase
U.S. Energy Information Administration – Today in Energy
Since 2022, U.S. retail electricity prices have risen faster than inflation and are projected to continue increasing through 2026, according to the Short-Term Energy Outlook. Unlike other fuels like gasoline and heating oil, which saw price declines after peaking in 2022 due to global crude oil market dynamics, electricity prices have steadily climbed. Regions with already high electricity costs, such as the Pacific, Middle Atlantic, and New England, may face larger price hikes—potentially exceeding the national average of a 13% increase from 2022 to 2025—while areas with lower prices may see smaller increases. Retail electricity prices reflect costs beyond generation, including transmission, delivery, taxes, and utility investments in aging infrastructure. In 2023, U.S. consumers spent an average of $1,760 on electricity, second only to gasoline at $2,450, with electricity expenditures showing more stability than gasoline prices, which fluctuate with global oil markets. [MDN: The regions that block new gas-fired power are the regions with the highest electricity prices.]
Bearish storage build, weak demand weigh on market as natural gas futures crater
NGI’s Daily Gas Price Index
Natural gas futures prices dropped midweek to $3.492/MMBtu for the June Nymex contract, a 15.5-cent decline, driven by mild shoulder season weather, reduced LNG feed gas deliveries, and expectations of growing supply despite lower production. Spot gas prices fell 11.0 cents to $2.625, reflecting soft demand. Analysts predict a potential slide to $3.00 if prices break below the critical $3.40 threshold, though this could attract bullish interest. Demand in the Lower 48 rose slightly to 73.0 Bcf/d, boosted by power sector needs, with record-breaking heat in Texas signaling rising cooling demand. However, national demand remains moderate due to comfortable temperatures elsewhere. Storage is expected to grow significantly, with projections of a 114 Bcf injection for the week ending May 9, far above last year’s 73 Bcf. Future price movements may hinge on summer weather, producer responses, and LNG export facility operations, while regional spot prices showed mixed trends. [MDN: Here we go, riding the roller coaster down again. Hold on so you don’t toss your cookies! We think (hope) this slide downward is temporary and that prices will soon increase again.]
As hydrogen market evolves, best uses will focus on cost, sustainability
RBN Energy
The article from RBN Energy discusses the evolving hydrogen market, emphasizing its established role in refining and ammonia production while highlighting its potential for broader applications as cost and sustainability become focal points. Hydrogen’s high production and transportation costs, coupled with inefficiencies in electrolysis (70% efficiency) and methane reforming (75-85% efficiency), pose challenges, particularly when compared to direct electricity use for applications like heating or electric vehicles. The article suggests hydrogen’s best uses lie in hard-to-electrify sectors like heavy industry, aviation, and maritime transport, where low-carbon “green” or “blue” hydrogen can replace fossil fuels. Policy incentives, such as the U.S. Inflation Reduction Act’s tax credits, are driving investment, but economic viability depends on reducing costs and scaling low-carbon production. As the market matures, prioritizing cost-effective, sustainable applications will shape hydrogen’s role in the energy transition, balancing its potential against practical limitations. [MDN: A realistic look at how hydrogen energy may get used. None of this pie-in-the-sky bullcrapus about hydrogen replacing natural gas. That market simply does not exist. There are some industries where it could be used. It remains to be seen if those industries willingly adopt hydrogen energy.]
Liability for climate change – an inequitable economic disaster
RealClearEnergy
The article from RealClearEnergy critiques climate change litigation as an inequitable economic burden, arguing that lawsuits targeting fossil fuel companies for environmental damages are flawed and counterproductive. It highlights how these legal actions, often driven by activist groups and sympathetic courts, seek massive financial penalties based on tenuous causal links between emissions and specific climate impacts, ignoring the complex, global nature of climate change. The author contends that such litigation unfairly punishes energy companies for meeting consumer demand, risking higher energy costs and economic disruption, particularly for low-income households. Furthermore, the article warns that the liability framework could deter innovation and investment in energy solutions, while failing to address emissions from other major contributors like China and India. It advocates for market-driven technological advancements and global cooperation over litigation, which it views as a divisive, inefficient approach that exacerbates economic inequality without effectively mitigating climate change. [MDN: These lawsuits MUST STOP and stop now. Suing oil and gas companies for supplying a legal product that the public demanded, suing companies that made our lives better, is insane. It’s graft. It’s lawyers looking to get rich.]
US to speed up oil and gas land parcel reviews for federal leasing
Reuters
The Trump administration plans to halve the review time for oil and gas land parcels on federal lands to about six months, as announced by the U.S. Department of the Interior on May 13, 2025. The Bureau of Land Management (BLM) will streamline the leasing process by conducting parcel reviews concurrently with National Environmental Policy Act assessments, aiming to boost U.S. energy production efficiently. This policy shift reverses Biden-era restrictions, aligning with Trump’s campaign promise to expand fossil fuel development on public lands. The initiative has raised concerns among environmental groups, who argue it prioritizes industry profits over environmental protection and may lead to increased greenhouse gas emissions. The BLM manages 245 million acres of federal land, primarily in western states, with significant oil and gas resources. The administration expects this change to enhance energy security and economic growth while navigating legal and environmental challenges. [MDN: None of these actions are extreme or harmful for the environment. Trump is simply restoring sanity, what used to happen, back into the process. It was Biden (the people pulling his strings) who turned BLM leasing into a nightmare taking years. Trump is restoring it to its previous status.]
Why the proposed “phaseout” of IRA subsidies is unacceptable
Energy Talking Points by Alex Epstein
In his Substack article, Alex Epstein argues that the proposed Republican budget, which claims to phase out Inflation Reduction Act (IRA) subsidies, is inadequate and deceptive. He contends that the plan retains nearly all IRA subsidies, including those for solar, wind, biofuels, and carbon capture, with only minor, easily reversible reductions starting after 2029. Epstein highlights three fatal flaws: the budget’s “savings” rely on future promises rather than immediate cuts, it preserves the most harmful subsidies through Trump’s presidency, and it fails to eliminate any major subsidy categories. He asserts that these subsidies increase energy costs, destabilize the grid, inflate debt, and promote inefficient energy sources without reducing CO2 emissions. Epstein urges a complete repeal of IRA subsidies or, at minimum, a compromise that ends most subsidies immediately while grandfathering existing projects to avoid economic disruption. [MDN: Republicans need to grow some courage and eliminate the IRA funds not already distributed. Quit whimping out!]
INTERNATIONAL
Crude slips after inventory surge
Bloomberg/Rigzone
Oil prices fell after a U.S. government report revealed a significant increase in crude inventories, the largest in two months, dampening optimism from a recent U.S.-China trade truce. West Texas Intermediate dropped 0.8% to around $63 per barrel, ending a four-session rally, while Brent closed near $66. The Energy Information Administration reported a 3.45 million-barrel rise in U.S. crude stockpiles, prompting a corrective phase in futures, with the 50-day moving average of $63.90 acting as a resistance level. This bearish data overshadowed market gains driven by U.S.-China trade détente and President Trump’s aggressive stance on Iran, including threats to eliminate its oil exports and new sanctions on its shipping networks. Despite a recent rally from a four-year low, oil prices remain down over 10% this year. Meanwhile, OPEC’s cautious output increase and potential further boosts in June raise concerns about a global surplus. [MDN: WTI for June delivery declined 0.8% to settle at $63.15 a barrel in New York. Brent for July settlement slipped 0.8% to settle at $66.09 a barrel. These prices are PERFECT. Keep them right there.]
Aramco pens $90B deals with US companies
Rigzone
Saudi Arabian Oil Co. (Aramco) announced 34 agreements and MOUs with U.S. companies, valued at approximately $90 billion, covering refining, liquefied natural gas (LNG), artificial intelligence, and more, as part of a strategic push for growth and diversification. Key deals include a 20-year, 1.2 MMtpa LNG purchase from NextDecade’s Rio Grande LNG project and a potential 5 MMtpa LNG offtake with a 25% stake in Sempra’s Port Arthur LNG 2. Aramco also signed an MOU with Exxon Mobil to upgrade their SAMREF refinery into a petrochemical complex and collaborated with NVIDIA on AI infrastructure and with Amazon on digital transformation. Additional agreements with suppliers like Baker Hughes and financial firms like BlackRock support Aramco’s operations and innovation. These deals, announced during President Trump’s visit alongside $600 billion in Saudi investments and $142 billion in U.S. arms sales, aim to enhance Aramco’s global portfolio and industrial capabilities. [MDN: We’re ambivalent. We’re happy to take the Saudis’ money, but not so crazy about them getting more access to our key infrastructure in this country.]
OPEC+ makes careful start to supply revival
Bloomberg/Rigzone
In April, OPEC+ nations cautiously began reviving oil production, adding only 25,000 barrels per day compared to the planned 138,000, marking the start of restoring supplies idled since 2022. Saudi Arabia met its target, but declines in countries like Kazakhstan and Iraq, meant to offset prior overproduction, limited the increase. Saudi Arabia’s push for quota compliance, frustrated by violations, led to plans for tripled supply hikes in May and June, contributing to a drop in Brent crude prices to a four-year low below $60 per barrel, though prices later recovered to around $66. Iraq and Kazakhstan made partial cuts, but Kazakhstan still exceeded its quota significantly. OPEC+ plans to add 411,000 barrels daily in May and June, with July’s output to be decided on June 1. OPEC’s optimistic 2025-2026 demand growth forecasts remain unchanged, projecting a 1.3 million barrel daily increase this year, far above other industry estimates. [MDN: OPEC+ is a group of murdering thug dictator regimes. Does it surprise anyone that there is no honor among thieves? Does it surprise anyone that historically, the group has NEVER been able to keep its members in line with their oil production quotas? It certainly doesn’t surprise anyone who has been in the O&G industry for any length of time.]
Europe will struggle to wean itself off Russian gas
Reuters
Europe is making strides to reduce its reliance on Russian gas, with plans to replenish its depleted natural gas storage network using minimal Russian pipeline supplies for the first time, as outlined in a Reuters article by Ron Bousso. Despite progress in boosting LNG imports from the U.S. and Qatar and increasing Norwegian piped gas, challenges persist. High global LNG demand, limited new supply, and potential disruptions like hurricanes or Middle Eastern conflicts could hinder Europe’s efforts. Gas prices, though lower than 2022 peaks, remain volatile, and a cold winter or reduced Russian flows via Ukraine could spike costs. Europe’s storage is currently at 65% capacity, expected to reach 90% by autumn, but long-term energy security requires sustained investment in renewables and infrastructure. Completely phasing out Russian gas, which still accounts for about 14% of Europe’s supply, remains a complex and ongoing struggle. [MDN: The simple fact is that Europe isn’t even trying to wean itself completely off Russian natural gas. To pretend otherwise is dishonest.]
BP’s chief U.S. economist worries China is winning the global energy war
Fortune
BP’s chief U.S. economist, Michael Cohen, warns that China is outpacing the U.S. in the global energy race, despite America’s tripled crude oil production. Speaking at the Columbia Global Energy Summit, Cohen highlighted China’s dominance in clean technology supply chains, particularly in solar, wind, batteries, and electric vehicles, positioning it as a short-term winner in the energy transition. China’s focus on manufacturing and exporting these technologies, coupled with its control over critical minerals like rare earths, gives it a strategic edge. While the U.S. leads in fossil fuel production, its slower adoption of renewables and reliance on imports for clean tech components hinder its competitiveness. Cohen noted that U.S. tariffs and trade barriers may further complicate efforts to catch up, as China’s investments in green infrastructure and global energy markets continue to grow, potentially reshaping the geopolitical energy landscape. [MDN: There IS NO “energy transition”—so if China is “winning” in that nonexistent race, so what? Let them! Of course, Mr. Cohen doesn’t bother to mention that China continues to build about one new coal plant PER WEEK. Meaning they aren’t really serious about a “transition” to unreliable renewables. The Chinese are not stupid like Europe and the left in America.]
GALACTIC
Webb’s Titan forecast – partly cloudy with occasional methane showers
NASA
NASA’s James Webb Space Telescope, in collaboration with the Keck II telescope, has provided new insights into the atmosphere of Saturn’s moon Titan, revealing a dynamic weather system characterized by partly cloudy skies and occasional methane showers. Observations from November 2022 show clouds rising to higher altitudes in Titan’s northern hemisphere, where most of its methane and ethane lakes are located, suggesting active cloud convection that likely replenishes these liquid bodies through precipitation. While direct rainfall wasn’t observed, the data indicate a cycle where methane evaporates, forms clouds, and potentially rains back down, similar to Earth’s water cycle. Additionally, Webb’s findings clarified the formation of ethane in Titan’s atmosphere, identifying a previously missing chemical pathway involving acetylene and hydrogen. These discoveries enhance our understanding of Titan’s complex climate and its unique status as the only known moon with a substantial atmosphere, denser than Earth’s. [MDN: Wait, what? Titan has methane and ethane “lakes” (fossil fuels!), and there have been no dinosaurs on Titan to die to create those fossil fuels?! Apparently, Titan didn’t get the memo that fossil fuels are evil and not allowed anywhere in the galaxy. How rude of the Titanians! Which is our rude and sarcastic way of pointing out that methane (and ethane, and other carbon-based fuels) are NATURAL in the universe and not something to be shunned, but something to be embraced and used. And our way of pointing out how brain-dead the left is for their irrational hatred of naturally occurring carbon energy.]