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NEW PRESSURE FROM THE LEFT: With Democrats’ climate deal teetering on collapse, President Joe Biden is under increasing pressure from his left to crack down more heavily on fossil fuels.
The thinking: The motivation behind the kinds of green energy incentives for electric vehicles and renewable energy technologies that passed the House last year is to enable more emissions-free sources to displace oil and gas.
But now it appears that those measures won’t clear the Senate. At the same time, the Biden administration has been asking for added production from the oil industry to lower prices.
That’s not a tenable situation for liberal Democrats and environmental activists. Accordingly, Biden will face growing calls to use executive powers to slow and stop new oil and gas development.
What they’re looking for: Biden is promising to take it upon himself to act on climate change, and he’s been getting his share of recommendations.
Sen. Jeff Merkley said this week that acting on climate for Biden should involve actions like a climate emergency declaration but also “an end to greenlighting new fossil fuel projects.”
“They have approved a lot of fossil fuel projects,” Merkley said this week of the administration.
The Biden administration has signed off on higher liquefied natural gas export volumes for several existing and pending export terminals and has promised to help the Europeans acquire more gas in lieu of volatile Russian supplies.
Merkley suggested that the administration’s actions had been conditioned on Congress reaching a green energy spending deal, but now that justification is falling through.
“They proceeded to say, ‘Hey, we’re open to doing a bunch of these things but we also need this climate package,’ and now they have been stumped on the climate package,” Merkley said.
Merkley and several of his Senate colleagues are trying to do some of this work to inhibit more fossil fuel projects themselves. He and five other Democratic senators are asking the Army Corps of Engineers to end a permitting program that allows project developers to avoid individual project reviews so long as the Corps determines the environmental impact to be minimal.
“Given the state of our climate crisis there is no new fossil fuel project that can have a 'minimal adverse impact' on the environment,” the senators told Corps leadership.
Leasing authority: The White House maintains that restricting oil and gas leasing on federal lands remains Biden’s objective, despite a court ruling against Biden’s unilateral pause on new leasing.
The Biden administration is appealing that ruling and has argued in court that Congress has granted agencies broad discretion on leasing, including the ability to pause sales.
The Interior Department’s carrying forward with multiple oil and gas lease sales has been perhaps the biggest issue Biden’s environmental constituencies have had with his presidency.
Collin Rees, U.S. program manager for Oil Change International, said Biden must move forward with “stopping the fossil expansion where he can” now with Sen. Joe Manchin holding out. He urged the administration not to make additional leases available when it finalizes its five-year offshore program.
“No new leases is an obvious part of that,” Rees told Jeremy. “It's a campaign promise that he's sort of already broken.”
Welcome to Daily on Energy, written by Washington Examiner Energy and Environment Writers Jeremy Beaman (@jeremywbeaman) and Breanne Deppisch (@breanne_dep). Email jbeaman@washingtonexaminer.com or bdeppisch@washingtonexaminer.com for tips, suggestions, calendar items, and anything else. If a friend sent this to you and you’d like to sign up, click here. If signing up doesn’t work, shoot us an email, and we’ll add you to our list.
MEXICO EYEING ‘MUTUALLY SATISFACTORY’ SOLUTION ON TRADE DISPUTE: Mexico Deputy Economic Minister Luz Maria de la Mora said her country is eyeing a “mutually satisfactory” solution to the trade talks requested by the U.S. and Canada, following accusations that Mexican President Andrés Manuel López Obrador’s government is favoring its state-owned utility and oil companies in a possible violation of the United States-Mexico-Canada Agreement.
Even as De la Mora told Reuters that the government planned to argue its energy policies were not in breach of the trade deal—the same position as Obrador—her tone was much more conciliatory than that of the president, and she stressed that Mexico did not plan to use a separate trade deal with the U.S. auto industry over proposed tax breaks for EV manufacturers as a “bargaining chip” in the 30-day dispute.
NORD STREAM 1 LEVELS STABILIZE: Nord Stream 1 gas flow remained stable today, according to data from the pipeline operators’ website, with gas flow climbing slightly to 29,191,527 kWh/h compared to the previous day, when levels stood around 29,000,000 kWh/h.
Nord Stream 1, the key gas pipeline linking Russia to the EU, resumed operations yesterday after a 10-day planned period of maintenance.
Still, flows remain at just 40% capacity—the same as pre-maintenance levels. Officials have cautioned that that level would not be sufficient to fill EU gas storage tanks to necessary levels ahead of the winter season.
The decision to only return to pre-maintenance levels also touched off criticism from some leaders, including German Vice Chancellor Robert Habeck, who told reporters yesterday: "Technically, there would be nothing to prevent Nord Stream ... from returning to full capacity.”
"The lower utilization rate of roughly 40 percent is clearly political and confirms that we cannot rely on supplies,” he added.
RUSSIA, UKRAINE SIGN GRAIN EXPORT DEAL IN BID TO AVERT FOOD CRISIS: Meanwhile, Russia and Ukraine signed separate deals with the U.N. and Turkey today to export grain from Black Sea ports, easing a wartime standoff that has left millions of people at risk of hunger.
The agreement, which is slated to be implemented over the next several weeks, is the first major deal signed between the two countries since Russia’s unprovoked invasion of Ukraine in late February.
The accord, which leaders signed at separate tables in Istanbul, was praised by U.N. Secretary General Antonio Guterres as a “beacon of hope” towards easing the global food crisis.
Leaders said the agreement will clear the way to export “significant” volumes of food through three Ukrainian exports— Odessa, Chernomorsk and Yuzhny— and will also ease shipments of Russian grain and fertilizer.
It is “a beacon of hope [and] possibility ... and relief in a world that needs it more than ever,” Guterres added of the deal. Read more from Breanne here.
GERMANY BAILS OUT UNIPER: German Chancellor Olaf Scholz said today that his country will bail out gas importer Uniper, vowing to do “what is necessary” for “as long as necessary” to help avert a gas crisis amid fears of an abrupt cutoff in Russian supplies.
Speaking to reporters in Berlin today, Scholz said the government will acquire 30% of Uniper, Germany's largest gas importer, as well as provide some $7.7 billion in government support to the company.
Scholz stressed to reporters that the bailout of Uniper was "a joint decision of the government,” on which he had “full agreement with the minister of economy and the minister of finance,” and was necessary due to Russia’s recent actions to cut gas supplies to the bloc, Politico EU reports.
He also stressed that Russia was to blame for the crisis, telling reporters the “argument[s] put forward” by Russian state-owned gas giant Gazprom for cutting gas delivery to the bloc by 60%, as well as its claims about turbine maintenance, “are not true.”
LAS VEGAS CAPS HOME SWIMMING POOL SIZES: Officials in Clark County, Nevada, voted this week to cap the size of swimming pools at single-family homes to 600 square feet of surface area, citing drought concerns and dwindling drinking water allocations from Lake Mead reservoir, where water levels have fallen to a record-low this year.
Clark County is home to an estimated 200,000 residential pools, according to city figures, with roughly 1,300 more built annually. “Having a pool in Las Vegas is like having a second car. It’s that common,” Kevin Kraft, the owner of a family custom pool design company, told the Associated Press.
But officials say too much is at stake for pool construction to continue at current levels: “If the trends continue and the lake continues to decline, then this may be one of the least of the tough decisions that we’ll be making over the course of time,” Clark County Commission Chairman Jim Gibson said of the new effort.
D.C. DECLARES HEAT EMERGENCY, WITH FORECAST THREATENING TO SURPASS 100 DEGREES: Meanwhile, temperatures in Washington, D.C. threaten to surpass 100 degrees Sunday for the first time in six years, and climbed above 95 degrees for the fourth day in a row yesterday, according to the Washington Post’s Capital Weather Gang. The high temperatures also prompted D.C. Mayor Muriel Bowser to declare a city-wide heat emergency lasting until Monday.
People prone to heat-related illnesses, including older adults and other vulnerable groups, were urged to stick to the air conditioning or take frequent breaks from being outside.
HIGH EARNINGS AND HIGH EXPENSES FOR ENERGY FIRMS: Oil and gas companies have been making a whole lot of cash this year, but they’re also having to spend at higher rates, according to the Energy Information Administration.
EIA analyzed the financial reports of 53 American exploration and production companies to find that they earned more than $25 billion in the first quarter of the year — 86% more than in the first quarter of 2021 (but 9% lower than Q421).
At the same time, supply chain issues and hedging-related losses have pushed expenses higher. Per-barrel production expenses rose to $28.06 during the first quarter, which is higher than any quarter for the past five years.
EIA emphasized that its analysis does not represent the industry as a whole.
SENATE ENERGY TIES IN DANIEL-DAVIS VOTE: The Senate Energy and Natural Resources Committee deadlocked in its vote yesterday for the nomination of Laura Daniel-Davis, Biden’s choice for assistant secretary of the Interior.
All of the committee’s Republicans opposed Daniel-Davis, who currently serves as the department’s principal deputy assistant secretary for Land and Mineral Management.
Ranking Member John Barrasso criticized Daniel-Davis for being part of an administration that is putting restrictions on oil and gas leasing on federal lands and “making us more dependent on foreign energy.”
Chairman Manchin’s office emphasized that “while he is not satisfied with the state of leasing” on federal lands and waters under the Biden administration that he voted in favor of Daniel-Davis.
Other committee activities: The committee also considered 37 public lands and waters bills yesterday, and 34 of them were approved in bipartisan votes.
OIL EXPORT BAN WARNING: A new analysis charts out some potential consequences of a ban on U.S. petroleum exports, something a number of Democrats and activists have promoted as a way to lower energy prices at home.
The study from the American Council for Capital Formation, a nonpartisan economic policy organization that advocates for free trade, projects that an export ban would result in refinery closures because refined products would effectively become “trapped” where they would otherwise be exported. Limited pipeline takeaway capacity and Jones Act restrictions on shipping would limit the redistribution of trapped products, according to the study.
The Gulf Coast region, which is currently driving record diesel export volumes, would be especially affected.
ACCF found that refinery closures could then drive prices up globally as prospective buyers of U.S. product bid elsewhere on lower available volumes.
The export ban play: Calls for an export ban to be reinstituted have cropped up intermittently since the ban was lifted in 2015.
More recently, Democrats have been lobbying the administration to impose bans on everything from crude oil, to both oil and refined products, as well as natural gas, in response to high and in some cases record energy prices — all of which the oil and gas industry have opposed.
House Energy and Commerce Chairman Frank Pallone asked Biden last month to ban oil exports on the grounds that it “would increase the domestic supply of oil available to U.S. refiners and would consequently help reduce prices at the pump here at home.”
This calendar year, U.S. crude oil exports averaged more than 3.3 million barrels per day through April, the latest month for which EIA data is available.
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Energy Intel How Germany sleepwalked into an energy crisis
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2:30 p.m. 628 Dirksen The Senate Indian Affairs Committee will hold a hearing on "Select Provisions of the 1866 Reconstruction Treaties between the United States and Oklahoma Tribes."