MDN’s Energy Stories of Interest: Wed, Jan 7, 2026 [FREE ACCESS]

OTHER U.S. REGIONS: New York State 2026 RGGI Operating Plan Amendment comments; NATIONAL: Strategists forecast USA crude inventory drop; Should LCOE finally be retired from energy policy?; Energy Transfer to spend up to $5.5 billion on natgas pipelines in 2026; More U.S. LNG growth expected after record-breaking year; INTERNATIONAL: Crude price falls as market refocuses on glut; Venezuela’s oil industry could be poised for a rebound, but it will take time; Renewables turn LNG glut into a sinkhole.

OTHER U.S. REGIONS

New York State 2026 RGGI Operating Plan Amendment comments
Pragmatic Environmentalist of New York
In his comments on New York’s 2026 RGGI Operating Plan Amendment, Roger Caiazza argues that NYSERDA treats auction proceeds as a political “slush fund” instead of prioritizing electric sector compliance. He notes that past emission reductions resulted from fuel switching, an exhausted strategy, and critiques the high $583-per-ton cost of current investments. Caiazza warns that upcoming, more stringent emission caps will far exceed projected power sector emissions, potentially forcing operational limits on generators. Consequently, he urges NYSERDA to shift funding from administrative and unrelated programs toward initiatives that directly reduce electric sector emissions to prevent a major, looming compliance crisis. [MDN: We are so screwed here in the Communist State of New York. There really isn’t much hope left, sorry to say. PA has dumped the RGGI carbon tax. NY has doubled down on it. Guess where people are moving to?]

NATIONAL

Strategists forecast USA crude inventory drop
Rigzone
Macquarie strategists, led by Walt Chancellor, forecast a 3.5 million barrel decrease in U.S. crude inventories for the week ending January 2, following a previous 1.9 million barrel draw. Despite expecting slightly higher refinery runs and increased imports, experts warn of potential volatility due to cargo timing and year-end effects. While crude stocks are declining, Macquarie anticipates significant builds in refined products, including an 8.1 million barrel increase in gasoline and 4.5 million barrels in distillates. This analysis comes as the EIA prepares to release official data, highlighting a complex balance between tightening crude supplies and rising product inventories. [MDN: It’s been nice paying under $3 per gallon for gasoline. However, those lower prices will not continue if crude inventories continue to fall. Less supply with the same (or increasing) demand equals higher prices.]

Should LCOE finally be retired from energy policy?
MasterResource
Robert Bradley Jr. argues that the Levelized Cost of Energy (LCOE) metric is an obsolete and misleading tool for modern energy policy. While reports from agencies like IRENA claim renewables are cheaper than fossil fuels, these studies ignore the systemic costs inherent to variable energy sources, such as backup reserves and grid reliability. Jonas Kristiansen Nøland notes that despite low LCOE figures, electricity prices are rising and fossil fuel use continues to grow. Consequently, experts advocate for replacing LCOE with Full System Cost of Electricity (FSCOE) to accurately reflect the economic realities and physical requirements of weather-dependent power systems. [MDN: In other words, all of those “studies” that purport to show unreliable renewable energy is cheaper than fossil energy are faulty. They compare apples with oranges (LCOE). It’s time to compare apples to apples (FSCOE).]

Energy Transfer to spend up to $5.5 billion on natgas pipelines in 2026
World Pipelines
Energy Transfer has announced a 2026 capital investment plan of $5 billion to $5.5 billion, focusing heavily on its natural gas network and infrastructure serving Texas data centers. The company forecasts 2026 adjusted EBITDA between $17.3 billion and $17.7 billion, exceeding analyst expectations and surpassing its 2025 projections. This outlook reflects a strategic pivot toward high-return natural gas pipeline projects and away from LNG, resulting in the suspension of the Lake Charles LNG facility. Instead, the firm is prioritizing domestic expansions, such as the Transwestern pipeline, to meet growing customer demand for gas transportation. [MDN: Maybe ET will throw a little money in the direction of the M-U this year?]

More U.S. LNG growth expected after record-breaking year
RBN Energy
U.S. LNG feedgas demand reached record highs at the end of 2025 and has maintained that momentum into early 2026, averaging 19.3 Bcf/d. This represents a significant 5 Bcf/d increase over the previous year, with most terminals currently operating at or above nameplate capacity. Notably, the Plaquemines facility has returned to peak levels, with Venture Global handling cargo marketing until mid-year. Analysts expect further record-breaking growth throughout 2026 as Corpus Christi increases intake and the Golden Pass terminal transitions from minimal testing to significant feedgas volumes during its anticipated startup later this month. [MDN: Full speed ahead! The more LNG we export, the more gas we can produce and sell, which is good for landowners and producers.]

INTERNATIONAL

Crude price falls as market refocuses on glut
Bloomberg
Oil prices dropped as West Texas Intermediate fell 2% to $57.13, driven by progress toward ending the Russia-Ukraine war and a looming global supply glut. The potential cessation of conflict threatens to increase Russian output in an already oversupplied market, while the ouster of Nicolas Maduro in Venezuela and protests in Iran added further complexity. Despite geopolitical tensions, analysts remain focused on bearish fundamentals, noting that Saudi Arabia is cutting prices and Morgan Stanley is lowering forecasts. With President Trump advocating for increased domestic drilling and major oil companies eyeing Venezuelan infrastructure, the market anticipates a growing surplus through mid-2026. [MDN: Brent for March settlement fell 1.7% to settle at $60.70 a barrel.]

Venezuela’s oil industry could be poised for a rebound, but it will take time
RBN Energy
Following the removal of Nicolás Maduro, Venezuela’s oil sector faces profound uncertainty and potential transformation. Short-term chaos persists as exports stall and storage fills, while the country’s dilapidated refining system remains largely offline, with initial capital expected to favor upstream extraction over refinery repairs. Medium-term prospects involve rerouting heavy crude from Asia to the U.S. Gulf Coast and an increased reliance on U.S. fuel imports to meet domestic demand. Long-term recovery of Venezuela’s massive reserves requires hundreds of billions in capital and resolving complex legal disputes over previously nationalized assets to attract cautious international investors. [MDN: An insightful and thoughtful look at what may lie ahead for Venezuela now that we’ve deposed the murdering drug lord who ran the country.]

Renewables turn LNG glut into a sinkhole
Reuters
The global LNG market faces a looming crash as a planned 50% production increase by 2030 creates a massive supply bubble. Despite rising demand from AI and Europe, industry leaders warn of “irrational exuberance” as falling battery costs make renewables significantly cheaper than gas. This shift is already impacting top importer China, which is prioritizing domestic green energy. Furthermore, severe equipment backlogs mean gas plants now take years longer to build than solar or wind projects. Ultimately, the combination of excess fuel supply and more competitive, faster-to-install renewable alternatives signals an inevitable and painful downturn for fossil fuel incumbents. [MDN: A totally incorrect commentary appearing on the Reuters website. If we had a nickel for every prediction that natgas and LNG are about to crash and burn, we’d be a billionaire. Unreliable renewables cannot compete with natural gas in a fair and free marketplace.]