| | | | |  | | By Matthew Choi | Presented by ExxonMobil | With help from Catherine Morehouse and Ben Lefebvre. Editor's Note: Morning Energy is a free version of POLITICO Pro Energy's morning newsletter, which is delivered to our subscribers each morning at 6 a.m. The POLITICO Pro platform combines the news you need with tools you can use to take action on the day's biggest stories. Act on the news with POLITICO Pro.
| | | — The U.S. and its allies are largely sparing Russian energy from sanctions as they try to prevent the invasion of Ukraine from rupturing global energy security. — The world's top scientists warn developing countries will face escalating challenges in dealing with climate change. — The Supreme Court is taking on its biggest climate case in 15 years today, with the scope of EPA's climate authority at stake. WELCOME TO MONDAY! I'm your host, Matthew Choi. Khary Cauthen of Cheniere gets the trivia for knowing Sally Rooney attended Trinity College Dublin . For today: How many operas did Antonin Dvorak compose? Send your tips and trivia answers to mchoi@politico.com. Find me on Twitter @matthewchoi2018. Check out the POLITICO Energy podcast — all the energy and environmental politics and policy news you need to start your day, in just five minutes. Listen and subscribe for free at politico.com/energy-podcast. On today's episode: A big week for SCOTUS.
| | | | TREAD CAREFULLY: This is a critical moment in global energy policy, where the still-evolving response to Russia's invasion of Ukraine aims to prevent a full blown energy, economic and humanitarian crisis. So far, Russia's energy sector has largely been spared from the West's sanctions, though it is one of the country's most important industries. Sanctioning Russian energy would impact greater shares of the world's energy supply than when the U.S. imposed punitive measures on other petrostates like Iran and Venezuela. Russia is the world's third largest crude producer, providing roughly 10 percent of the world's oil, and the second largest natural gas producer. Though the Biden administration has been rallying around its rolodex to find energy alternatives for Western Europe from Russian gas, both sides would suffer major losses if they turned off the taps.
| | | | A message from ExxonMobil: ExxonMobil is committed to playing a leading role in the energy transition. We're advancing climate solutions, including carbon capture and storage, hydrogen and advanced biofuels. And, by 2050, we aim to achieve net-zero emissions (Scope 1 and 2) from our operated assets. We're working with partners to achieve similar results from non-operated assets and advocating for supportive policies to accelerate the deployment of lower-emission technologies needed to support a net-zero future. Learn more at ExxonMobil.com/Solutions | | | But Russia's energy sector has still been reeling under other sanctions by association. After days of hand wringing, the U.S. and Europe agreed to block several Russian banks from the SWIFT payments system Saturday. Though the West offered some exemptions to keep global energy markets stable, uncertainty about those exemptions is already leading traders to avoid Russian commodities all together to avoid running afoul of the new rules. BP also announced Sunday that it would drop its nearly 20 percent share in Russian national oil company Rosneft in a massive blow to the country's oil sector. While none of these market moves were mandated by Washington or Brussels, they highlight the chilling effect on energy and the delicate balance the West faces to protect markets from getting too spooked. U.S. WTI crude futures shot up when trading opened Sunday night from just under $92 Friday to nearly $99 Sunday. President Joe Biden has repeatedly said he will do whatever in his power to save Americans from rising prices, and a spike in energy prices goes far beyond just dollars and cents in investor pockets or consumer prices at the pump. The U.S. is already dealing with some of its highest inflation in decades coming out of the pandemic, and higher fuel costs mean higher prices all along the supply chain, leading to food insecurity, economic stagnation, you name it. Biden entertained the possibility of a third release from the Strategic Petroleum Reserve (which is getting Congressional backing) last week, and said he would be working with other high consuming and producing nations on solutions. But that hasn't stopped Republicans from cudgeling the president over the specter of rising gas prices. Sen. Rick Scott (R-Fla.) tweeted that Biden's "radical Green New Deal policies, like killing Keystone XL, have pushed America to a dangerous dependence on Russian & other foreign energy." But despite the economic and political risks, the U.S. is by and large in a far better position than Europe, with lower energy prices and dependence on Russian energy. The U.S. gets less than 10 percent of its crude from Russia — a proportion that grew to replace Venezuelan imports now under sanctions, not in response to actions like the shutdown of the never-operational Keystone XL. DWS, a private equity firm with $1 trillion in management, is forecasting oil production in the United States to grow a whopping 800,000 barrels a day this year, higher than what the official U.S. forecasts calls for. "The amount of oil coming out of the U.S. is going to exceed what people were thinking even a month ago," DWS commodity portfolio manager Darwei Kung told ME. "Once we start to see more security about supply, it won't be a surprise to see oil and European natural gas prices reverse." For a bird's eye view of Biden's tricky path forward, POLITICO's Ben Lefebvre and Josh Siegel have you covered. RELATED: "Putin's threat of 'consequences' heightens worries about Americans' electricity," via POLITICO's Maggie Miller.
| | | | SUBSCRIBE TO NATIONAL SECURITY DAILY : Keep up with the latest critical developments from Ukraine and across Europe in our daily newsletter, National Security Daily. The Russian invasion of Ukraine could disrupt the established world order and result in a refugee crisis, increased cyberattacks, rising energy costs and additional disruption to global supply chains. Go inside the top national security and foreign-policymaking shops for insight on the global threats faced by the U.S. and its allies and what actions world leaders are taking to address them. Subscribe today. | | | | | | | | IPCC: A WORLD OF HAVES AND HAVE NOTS: The world's top scientists warn that climate change is furthering the divide between the rich and the poor. While the richest countries will have better odds weathering the food insecurity, natural disasters and altered temperatures of a warming world, lower income countries will be left defenseless, according to the Intergovernmental Panel on Climate Change report released today. And "whether that is worsened or not depends on how fast we draw down" greenhouse gas emissions, said Timon McPhearson, director of the Urban Systems Lab at The New School in New York City and a report author. "As recent climate tragedies demonstrate, mitigation alone cannot protect our families, cities, and economies from harm," U.S. climate envoy John Kerry said in a statement. "That is why adaptation is so critical—our ability to thrive in the face of changing climate requires us to do more than lower emissions. It also requires us to redouble efforts to address adaptation—building the climate resilient homes, bridges, roads, health systems, and food systems that we depend on." The report gives greater weight to legal and political challenges from both citizen groups and the developing world that rich countries' contributions to climate change constitute a violation of their rights. Climate inequality was a major point of contention at last year's U.N. climate summit in Scotland, where many of the countries least responsible for yet most vulnerable to climate change demanded financial assistance from richer countries. It's sure to be a major theme of this year's conference in Sharm el-Sheikh, Egypt. Read more from POLITICO's Karl Mathiesen.
| | | HIGH COURT'S CLIMATE SHOWDOWN: The Supreme Court will be taking on its biggest climate case in 15 years today, tackling the extent of EPA's ability to regulate power plants' planet-warming emissions. The case, West Virginia vs. EPA, appeals a lower court decision that found that Trump's EPA erred in repealing the Obama-era Clean Power Plan and that deemed unlawful the Trump administration's playbook of considering emissions reductions strategies on an individual plant basis. The Biden administration doesn't have a replacement regulation for the conservative attorneys general to challenge, and environmentalists question why the Supreme Court would take on what they say amounts to a hypothetical. But the challengers say the court needs to clarify the extent of agencies' power to act outside of what is explicitly enumerated in legislation. Read more from POLITICO's Alex Guillén. SCOTUS NOM: Biden tapped D.C. Judge Ketanji Brown Jackson to replace Justice Stephen Breyer on the Supreme Court last week, and environmentalists are likely to rally around her nomination as she faces a Senate confirmation. Though best known for her work in criminal law, Jackson also has a notable record in the environmental sphere. As a Miami high school student in 1987, she "grilled" then-Interior Secretary Donald Hodel on offshore oil drilling's impacts on Florida's reefs, the Miami Herald reported at the time. "Oil and water don't mix," she said. But she has also ruled against environmentalists, including in a challenge against the Enbridge-owned Flanagan South Pipeline and over an Obama-era designation over the Riverside fairy shrimp habitat under the Endangered Species Act. Read more from Alex, who takes a deep dive on her environment record for Pros.
| | | | A message from ExxonMobil:   | | | | | | IN COMMITTEE: Both chambers are back this week. Here's what's going on in committee. The Senate Energy Committee will grill FERC at a hearing Thursday on the commission's new pipeline policy statement. The commission voted to take greater account of environmental justice and climate concerns when approving projects — a move that got pushback from both Republicans and Democratic Senate Energy Chair Joe Manchin. All five FERC commissioners will be at the hearing, which POLITICO's Catherine Morehouse previews here. Senate Energy will also have a legislative hearing Tuesday on a spate of bills tackling research and reorganization at the Energy Department. The House Natural Resources National Parks, Forests and Public lands subcommittee will also have a legislative hearing Tuesday on five bills largely focusing on specific local public land priorities. Finally, the Senate Environment and Public Works Committee will have a hearing Wednesday on the Department of Transportation's implementation of the bipartisan infrastructure package, including testimony from Secretary Pete Buttigieg.
| | | | STEP INSIDE THE WEST WING: What's really happening in West Wing offices? Find out who's up, who's down, and who really has the president's ear in our West Wing Playbook newsletter, the insider's guide to the Biden White House and Cabinet. For buzzy nuggets and details that you won't find anywhere else, subscribe today. | | | | | | | | VA LAWMAKERS PRESS FERC TO END MVP BUILD: A group of Democratic Virginia lawmakers urged FERC to issue a stop-work order for the Mountain Valley Pipeline, in a letter sent Friday, given numerous federal permitting setbacks. Earlier this month, the U.S. Court of Appeals for the Fourth Circuit invalidated an environmental review from the U.S. Fish and Wildlife Service, and the U.S. Army Corps of Engineers subsequently signaled it would not be able to move forward with its own analysis until a "valid" biological review is issued. But lawmakers are concerned that without FERC intervention project developers will continue to build — risking potential environmental harm. "We have no confidence that MVP, LLC would perform construction procedures without jeopardizing Virginia's water resources, and our constituents are very concerned that any new ground-disturbing activities may negatively impact their communities," the 13 lawmakers wrote. "We look for agency assurance that construction efforts will cease until all required federal authorizations have been duly reissued." One of the pipeline's developers last week indicated it was skeptical about the project's odds of completion. In an SEC filing, co-developer NextEra Energy said the pipeline had a "very low probability" of being completed, citing "continued legal and regulatory challenges."
| | | BIGHT BRINGS BIG BUCKS: The Biden administration's first offshore wind lease sale will bring in a record-shattering $4.4 billion. The lease sale in waters off the coast of New York and New Jersey is the first since 2018 and is expected to support 5,600 megawatts, according to the Bureau of Ocean Energy Management. The increase in the region's renewable generation comes as both New York and New Jersey face stringent clean energy targets for 2035. POLITICO's Marie French has more.
| | | — "Pentagon wants Moscow back channels to prevent nuclear escalation," via POLITICO. — "Australian mining billionaire to invest $2.2 bln in renewable energy project," via Reuters. — "Exxon's Bank in Russia Among Those Hit by Sanctions Over Ukraine," via Bloomberg. — "U.S. Bets on Faster-Charging Battery in Race to Catch Energy Rivals," via The Wall Street Journal. THAT'S ALL FOR ME!
| | | | A message from ExxonMobil: ExxonMobil is committed to playing a leading role in the energy transition and advancing climate solutions while continuing to power economies around the world. We're investing $15 billion in lower-emission technologies, including carbon capture and storage, hydrogen and advanced biofuels, through 2027. By 2050, we aim to achieve net-zero emissions (Scope 1 and 2) from our operated assets, backed by a comprehensive approach with detailed emission-reduction roadmaps. And where we are not the operator, we're also working with partners to achieve similar results and help them reach their emission reduction goals. We're advocating for supportive policies, such as a price on carbon, which can help reduce costs and drive new markets to accelerate deployment of key lower-emission technologies needed to support a net-zero future. Learn more about our plans and how our strategy is resilient under the International Energy Agency's Net Zero Emissions by 2050 Scenario at ExxonMobil.com/Solutions | | | | | | | Follow us on Twitter | | | | Follow us | | | | |
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