President Biden Issues Executive Order Banning U.S. Imports of Russian Origin Oil, Gas, and Coal

On March 8, 2022, President Biden issued Executive Order 14066 which prohibits the following actions:

-The importation into the United States of any “crude oil; petroleum; petroleum fuels, oils, and products of their distillation; liquefied natural gas; coal; and coal products” of “Russian Federation origin”;

-New investment in the Russian energy sector by U.S. persons, wherever located; and

-Any approval, financing, facilitation, or guarantee by a U.S. person, wherever located, of any transaction conducted by a non-U.S. person that would be prohibited by Executive Order 14066 if performed by a U.S. person or within the United States.

The Executive Order further prohibits any transaction by anyone (whether a U.S. person or a non-U.S. person) that evades or avoids, has the purpose of evading or avoiding, causes a violation of, or attempts to violate any of Executive Order 14066’s prohibitions, as well as conspiracies to violate the prohibitions.

In a Fact Sheet, the Biden Administration stated that the Executive Order is intended to “further deprive President Putin of the economic resources he uses to continue his needless war of choice”. A press release from the U.S. Department of the Treasury also stated that “[t]he United States continues to take severe action to hold the Russian Federation accountable for its brutal, unprovoked invasion of Ukraine. Treasury has targeted the infrastructure supporting President Putin’s invasion of Ukraine”.

Executive Order 14066 is immediately effective. However, the U.S. Treasury Department’s Office of the Foreign Assets Control (“OFAC”) has issued General License 16 authorizing all transactions that are “ordinarily incident and necessary to the importation into the United States” of certain products of “Russian Federation Origin”, if performed pursuant to written contracts or written agreements entered into prior to March 8, 2022. The products of “Russian Federation Origin” authorized for import into the U.S. under General License 16 are:

-Crude oil;

-Petroleum;

-Petroleum fuels;

-Oils, and products of their distillation;

-Liquified natural gas; and

-Coal products.

General License 16 will remain effective until April 22, 2022, at which time all such transactions will be fully prohibited. General License 16 does not authorize any other actions that are prohibited under the existing Russian Harmful Foreign Activities Sanctions Regulations or transactions with persons who are otherwise subject to blocking sanctions unless such actions or transactions are separately authorized by OFAC.

OFAC also issued new Frequently Asked Questions (FAQ) guidance and updated existing FAQ guidance in order to clarify certain aspects of the Executive Order. Among other things, these FAQs establish definitions for the terms “Russian Federation origin”, “new investment in the energy sector in the Russian Federation” and “energy sector”. The FAQs also clarify that the Executive Order’s prohibitions do not extend to products that are not of Russian Federation origin “even if such products transit through or depart from the Russian Federation”.

Additionally, U.S. Customs and Border Protection (“CBP”) issued Cargo Systems Messaging Service Number 51260049 indicating that it will “be requiring filers of entries or admissions to Foreign Trade Zones for shipments of [the Russian Federation origin banned products] to provide purchase orders and/or executed contracts and/or any other documentation showing when the order and/or contract went into effect” through the expiration of General License 16 on April 22, 2022. CBP also stated it will require the documentation prior to unlading and it “should include conveyance information, bill of lading number(s) and entry number(s) or FTZ admission information.”

Anyone reviewing Executive Order 14066 should also be aware of the significant sanctions and export controls that the U.S. government imposed on Russia prior to Executive Order 14066.

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Grant Leach is an Omaha-based partner with the law firm Husch Blackwell LLP focusing on international trade, export controls, trade sanctions and anti-corruption compliance.

Cortney O’Toole Morgan is a Washington D.C.-based partner with the law firm Husch Blackwell LLP. She leads the firm’s International Trade & Supply Chain group.

Tony Busch is an attorney in Husch Blackwell LLP’s Washington, D.C. office and is a member of the firm’s International Trade & Supply Chain practice team.

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States Most Dependent on Coal for Electricity

December 16th, 2021 Commodity.com Leave a comment

At the recent UN Climate Change Conference in Glasgow, world leaders convened to negotiate new goals for reducing carbon emissions in the effort to slow the pace of global warming. Across two weeks of negotiations, one of the major issues under discussion was the use of coal as an energy source. Some coal-dependent nations including India and China argued for a “phase down” rather than a total “phase out” of coal power in the final agreement, while U.S. envoy John Kerry predicted in an interview that the U.S. would eliminate it by 2030.

It is one of the cheapest energy sources available in the U.S., in part because the U.S. houses a large portion of the world’s coal reserves. But coal also has other environmental and social downsides that have made it a less desirable fuel source. Mining and burning coal heavily emits greenhouse gases like carbon dioxide and methane and also poses risks of air and water pollution. Many policymakers and environmental advocates are now pushing for a transition away from coal for that reason.

Until recently, however, cost won out, and inexpensive coal was the predominant fuel source in the U.S., accounting for more than half of electricity generation in the U.S. up until 2003. Since then, dependence on coal has plummeted and currently accounts for only 19.3% of total U.S. generation. The swift decline in coal has been made possible as other cleaner energy sources have become less expensive. Natural gas has seen a major boom over the last two decades as techniques like hydraulic fracturing and horizontal drilling made it easier to extract. Renewable sources like wind and solar have also become less expensive and more widely adopted in recent years thanks to government investment and technological advances. As a result, the share of electricity generated from renewables has risen by two-thirds since 1990.

Some states that have traditionally relied on coal both as an economic driver and as an energy source have been slower to make the transition. The majority of coal production in the U.S. is contained to a handful of states, including Wyoming and West Virginia, and because coal is cheap and plentiful, these heavy coal producers are also among the states that generate the greatest share of electricity from coal and a lower share from renewables. In contrast, the states that depend more heavily on renewables either have governments that have prioritized clean energy and emissions reductions or geographic features that make them well-suited to wind, solar, or hydropower installations.

The data used in this analysis is from the U.S. Energy Information Administration. To determine the states most dependent on coal for electricity, researchers at Commodity.com calculated the share of total electricity generated from coal. In the event of a tie, the state with the greater total electricity generated from coal was ranked higher. Researchers also calculated the total and proportion of electricity generated from renewable sources. Renewable sources include solar, wind, geothermal, biomass, and hydroelectric.

Here are the states most dependent on coal for electricity.

State	Rank	Share of electricity generated from coal	5-year change in electricity generated from coal	Total electricity generated from coal (MWh)	Share of electricity generated from renewables	Total electricity generated from renewables (MWh)
West Virginia	1	88.6%	-26.2%	50,216,398	6.2%	3,496,285
Wyoming	2	79.4%	-22.6%	33,359,104	16.1%	6,763,997
Missouri	3	71.3%	-20.8%	51,755,690	7.5%	5,450,572
Kentucky	4	68.7%	-39.9%	43,638,313	8.5%	5,395,636
Utah	5	61.5%	-28.0%	22,806,021	12.5%	4,644,687
North Dakota	6	58.1%	-11.7%	24,496,807	38.1%	16,084,768
Indiana	7	53.1%	-38.9%	47,772,885	8.2%	7,364,544
Nebraska	8	51.0%	-22.3%	18,788,647	28.9%	10,648,740
Wisconsin	9	38.7%	-36.1%	23,761,097	9.4%	5,779,793
New Mexico	10	37.5%	-37.4%	12,788,184	27.2%	9,253,738
Ohio	11	37.2%	-37.2%	45,008,596	2.9%	3,500,737
Montana	12	36.4%	-47.0%	8,490,284	59.4%	13,872,119
Colorado	13	36.0%	-38.2%	19,478,405	30.9%	16,724,964
Kansas	14	31.1%	-31.0%	16,959,839	44.2%	24,117,519
Arkansas	15	28.2%	-29.1%	15,420,998	10.5%	5,735,702
United States	–	19.3%	-42.8%	773,392,897	19.5%	783,003,365

For more information, a detailed methodology, and complete results, you can find the original report on Commodity.com’s website.

Archives, Global Trade Daily, Utilities

U.S. States that Export the Most Energy

March 25th, 2021 Commodity.com Leave a comment

The energy economy in the United States has been transformed over the last 15 to 20 years, reducing reliance on some traditional fuel sources while bringing others to the forefront.

The main factors driving this shift have been the increased use of natural gas and renewable energy. The emergence of fracking has reduced the costs of natural gas extraction and led to a boom in domestic production over the past couple of decades. Simultaneously, new innovations in renewable energy sources like solar and wind power have reduced costs and made these alternatives more viable at scale. With the adoption of natural gas and renewables, production and consumption of formerly predominant sources like oil and coal have leveled off or declined.

This transition has also shifted the U.S. political economy around energy. Nationally, political figures have called for U.S. energy independence from imported foreign fuel resources for years, hoping to reduce reliance on other nations in the event of geopolitical conflicts. Because of the U.S.’s increased production of domestic energy sources, the country has made rapid progress toward that goal in recent years.

In 2019, the United States was a net exporter of energy for the first time since 1957, meaning that it produced more energy than it consumed. With a sharp increase in production over the past twenty years, production has begun to catch up with consumption and exports with imports. The nation’s net imports of coal and coke, natural gas, and petroleum have all fallen below zero, leaving only crude oil as a major fuel import—and even imports in that category are showing a decline.

Within the U.S., states have different levels of production and consumption affecting their import and export levels as well. While some states—especially those who produce coal in large numbers—have suffered in the transition between fuels, others have dramatically increased their energy production. As a result, these states are now producing far more energy on a per capita basis than peer states are.

This is particularly true for two of the states at the front of the natural gas boom, Wyoming and North Dakota. These states lead the nation in both total energy production on a per capita basis, a function of both their high levels of production and their low populations.

Interestingly, Wyoming and North Dakota are among the nation’s leaders in per capita energy consumption levels as well. One of the reasons is that extracting and refining fuel is itself an energy-intensive process—which is why some of the other leading states for energy consumption per capita are also major fuel producers, like Alaska and Louisiana.

Despite their high consumption levels, leading states Wyoming and North Dakota nonetheless have the highest net energy exports per capita, followed by other major energy producers like West Virginia, New Mexico, and Alaska. To find these locations, researchers at Commodity.com used data from the U.S. Energy Information Administration’s Electric Power Annual Report and ranked states based on their net energy exports per capita—calculated as the difference between per capita production and consumption.

Here are the states that export the most energy.

State	Rank	Net energy exports per capita (million Btu)	Total energy production per capita (million Btu)	Total energy consumption per capita (million Btu)	Net energy exports (trillion Btu)	Total energy production (trillion Btu)	Total energy consumption (trillion Btu)
Wyoming	1	12,368.3	13,335.4	967.1	7,158.3	7,718.0	559.7
North Dakota	2	4,677.5	5,549.4	871.9	3,564.6	4,229.0	664.4
West Virginia	3	2,200.0	2,661.6	461.6	3,942.7	4,770.0	827.3
New Mexico	4	1,301.0	1,636.8	335.8	2,727.9	3,432.0	704.1
Alaska	5	1,099.3	1,928.8	829.5	804.2	1,411.0	606.8
Oklahoma	6	800.4	1,233.5	433.1	3,167.2	4,881.0	1,713.8
Montana	7	522.5	932.8	410.3	558.5	997.0	438.5
Pennsylvania	8	392.5	702.0	309.5	5,024.8	8,987.0	3,962.2
Colorado	9	370.0	635.9	265.9	2,130.8	3,662.0	1,531.2
Texas	10	206.2	704.3	498.1	5,978.2	20,421.0	14,442.8
United States*	–	2.7	307.8	305.2	873.0	101,038.0	100,165.0

For more information, a detailed methodology, and complete results, you can find the original report on Commodity.com’s website: https://commodity.com/blog/states-export-most-energy/

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US Coal Exports Decline on Lower EU Demand

October 6th, 2014 Haylle Sok Leave a comment

Washington, DC – US coal exports have continued to decline from their record volumes in 2012 with exports during the first half of this year totaling 52.3 million short tons (MMst), 16 percent below the same period in 2013.

Most of these exports go to countries in Europe and Asia, according to the US Department of Energy.

The decline, the agency said, reflects both lower European demand for steam coal and increased steam coal supply from Australia and Indonesia.

Metallurgical coal supply from Australia, Canada, and Russia has also increased. These factors have led to a cumulative decline of 9.0 MMst in coal exports to Europe and Asia during the first half of 2014.

Coal exports fall into two categories: metallurgical coal, which is used in the production of steel, and steam coal, which is commonly used to fuel boilers that generate steam used to produce electricity. With relatively minor coal imports, the US has been a net exporter of coal since 1949, the earliest year of data collection.

Metallurgical coal production, primarily from the Illinois and Appalachian coal basins, represented less than 8 percent of production but 56 percent of total US coal exports in 2013.

Europe is the leading destination for metallurgical coal exports, followed by Asia. Together, these two regions accounted for nearly 80 percent of US metallurgical coal exports in the first half of 2014.

Steam coal is mainly used to generate electricity, but also has applications at combined heat and power plants to produce steam used in industrial processes.

Steam coal generally has lower heat content than metallurgical coal and can be found at most coal-producing basins in the US. In recent years, steam coal accounted for more than 90 percent of domestic coal production.

During the first half of 2014, Europe received 8.8 MMst of US steam coal exports, a drop of 7.4 MMst from the same period in 2013. Asia’s share of US steam coal exports increased in 2014, but export tonnage to Asia decreased 2.4 percent from the first half of 2013.

In 2013, six US ports shipped 89 percent of US coal exports. Among them, Baltimore and Norfolk represent 55 percent, while Houston, Mobile, and New Orleans make up 30 percent. Seattle accounted for 5 MMst, or 4 percent, all of which was comprised of steam coal exports.

Eastern and southern ports are used to export metallurgical coal because it is produced in the Illinois and Appalachian Basins.

10/06/2014

President Biden Issues Executive Order Banning U.S. Imports of Russian Origin Oil, Gas, and Coal

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