| | | | |  | | By Matthew Choi | | | With help from Ben Lefebvre and Zack Colman. 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.
| | | — President Joe Biden and European Commission President Ursula von der Leyen announced an agreement to direct additional LNG shipments to Europe to push along its divorce from Russian energy. — Russian spies targeted the Nuclear Regulatory Commission and other critical energy targets in cyberattacks, the Justice Department alleges. — FERC reversed course on its natural gas policy statement citing fierce backlash from industry. HAPPY FRIDAY! I'm your host, Matthew Choi. Heath Knakmuhs of the U.S. Chamber of Commerce gets the trivia for knowing John Jacob Astor IV was the richest passenger aboard the Titanic. For today: Germans generally sing which stanza of their national anthem? 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: FERC's gas policy reset.
| | | | | A message from The American Beverage Association: At America's beverage companies our plastic bottles are made to be remade. We're carefully designing them to be 100% recyclable, including the caps—so every bottle can become a new one. That means less plastic waste in our environment. Please help us get Every Bottle Back. EveryBottleBack.org | | | | | | TURNING UP THE TAPS FOR EUROPE: The U.S. will work to ensure 15 billion cubic meters of liquefied natural gas shipments are directed to Europe this year to help the continent quit Russian energy imports, the White House and EU announced this morning. The U.S. will collaborate with "international partners" to amp up the shipments and with the EU to build out LNG infrastructure, which they pledged will be developed in ways that reduce their greenhouse gas intensity. The U.S. will also work with the EU to reduce its natural gas demand via energy efficiency measures and greater clean energy use in line with both Brussels' and Washington's climate goals. A joint task force chaired by representatives from the White House and European Commission will oversee the effort, focusing on Ukraine and Europe's energy security ahead of next winter. Speaking alongside European Commission President Ursula von der Leyen in Brussels this morning, Biden acknowledged "eliminating Russian gas will have costs for Europe. But it's not only the right thing to do from a moral standpoint. It's going to put us on a much stronger strategic footing." The announcement came just before Biden's planned trip to Poland to visit Ukrainian refugees. The president also announced a raft of new sanctions targeting Russian lawmakers and other elites on Thursday. Russia accounts for a quarter of Europe's crude oil supplies and 40 percent of its natural gas. That reliance on Russian energy has hamstrung its efforts to punish Moscow for its war against Ukraine, preventing it from taking actions like the ban on energy purchase that Biden ordered for the U.S. The EU recently set a target to shrink its gas purchases from Russia by two thirds by the end of the year, an ambitious goal that analysts say it's unlikely to meet. But if Europe were to cut the energy ties with Moscow, the impact could be devastating, since European OECD countries bought nearly 50 percent of Russia's crude oil and condensate and three-quarters of its natural gas last year, according to EIA. Russian President Vladimir Putin also tried to leverage the relationship to salvage the ruble as its value plummets, saying Europe should pay for gas in the Russian currency. Von der Leyen rebuffed those demands, saying Thursday it would be a "clear breach of contract." "It would be an attempt to circumvent the sanctions. We will not allow our sanctions to be circumvented. The time when energy could be used to blackmail us is over," Von der Leyen said, according to Reuters. THE RUSSIANS ARE HACKING: Russian nationals, including three FSB officers, spent years trying to hack into global energy targets including American power plants, according to indictments unsealed Thursday. The FSB officers were involved in hacking operations from 2012 to 2017, hitting more than 500 different targets, including the Nuclear Regulatory Commission, the Justice Department alleged. They were successful in compromising the business network of Kansas' Wolf Creek Nuclear Operating Corp., according to DOJ, though a department official said the control systems network wasn't breached, POLITICO's Betsy Woodruff Swan and Maggie Miller report. Another Russian national, Evgeny Viktorovich Gladkikh, along with unnamed co-conspirators, also targeted an American energy company in 2018 after viewing a Defense Department document detailing vulnerabilities in U.S. refineries, Maggie reports. Biden warned the private sector to brace for possible Russian cyberattacks, citing "evolving intelligence" this week. The FBI also warned energy companies to prepare for Russian hacks. A DOJ official said more federal action would be announced in the coming days.
| | | | 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. | | | | | | | | FERC 180: After a whole lot of uproar over its new natural gas policy statements, FERC changed course and unanimously agreed to withdraw them and downgrade the plans to draft status — conceding to the concerns of the industry, Republicans and Senate Energy Chair Joe Manchin . The commissioners also agreed not to apply the statements ex post facto to projects that had applied for FERC approval before the policies are finalized. The policy statements the Democratic commissioners had approved would have increased the weight of environmental justice and climate considerations in gas project permitting, measures that were in line with the Biden administration's priorities. But industry interest groups decried them as adding needless bureaucratic hurdles to permitting when the country is trying to amp up its gas capacity to supplant Russian gas. Senate Republicans, including Energy ranking member John Barrasso and Minority Leader Mitch McConnell, as well as Democrat Manchin had pilloried the policy statements as federal overreach. During FERC's monthly open meeting Thursday, Chair Rich Glick said he changed his stance after discussions with pipeline and LNG companies, conceding that "the policy statements raise additional questions that could benefit from further clarification." But he said outcry from the Hill did not sway him, saying "I'm not going to do anything for political purposes." The Interstate Natural Gas Association of America, which protested the policy statements, expressed relief at Thursday's decision, saying it "will hopefully provide further clarity and predictability for a timely natural gas infrastructure certification process." POLITICO's Catherine Morehouse has more from the meeting. SOLAR STANDOFF: The solar industry is on tenterhooks as the Commerce Department hits a deadline today to determine whether to initiate an investigation into expanding existing tariffs on solar equipment imports from China to include cells and panels assembled in four Southeast Asian nations. A decision to launch a probe sought by California-based manufacturer Auxin Solar has many in the industry worried about disrupting the industry critical to achieving Biden's goal of decarbonizing the power sector by 2035. And with prices for components rising, they say the investigation could ensure the landscape for solar is worse off under Biden than it was under industry critic Donald Trump, who frequently attacked the sector and whose administration implemented tariffs against solar imports. "It's like a nuclear bomb going off," said one renewable energy company executive, adding it would have an "immediate chilling effect." Read more from Kelsey Tamborrino and Josh Siegel here. THE SCOTUS CARBON FACTOR: EPA Administrator Michael Regan offered a cloudy outlook on the future of the Biden administration's forthcoming greenhouse gas regulation, saying the upcoming Supreme Court ruling on EPA's authority makes doing so "a tough call." "I think we're watching very closely and weighing all of our options," he told the American Council on Renewable Energy's policy forum. "Obviously, it's our hope that the decision will stay on that more narrow side." The high court is considering a case challenging EPA's authority on regulating power plants' greenhouse gas pollution argued last month, with Republican states contending EPA had no authority to enact the kinds of wide-ranging carbon cuts that Democrats have sought. The court halted the Obama-era Clean Power Plan in 2016, and the Biden administration is aware it will likely not be able to pursue a replacement proposal with the same reach. Still, Regan said he would propose a number of regulations in the coming months on conventional pollutants, wastewater discharge, coal ash and other power-generation-related pollution. Read more from POLITICO's Alex Guillén and Kelsey Tamborrino. A JUICY READ: " The Dept. of Energy's #NeverTweet moment," from ME's colleagues at West Wing Playbook.
| | | | A message from The American Beverage Association:   | | | | | | MCCARTHY STILL PUSHES BBB: National Climate Adviser Gina McCarthy isn't giving up hope on clean energy legislation this year and doesn't want the war in Ukraine to sidetrack measures to address climate change. Speaking at the ACORE policy forum Thursday, McCarthy said Biden is going to "double down" on salvaging as much as possible of the clean energy package included in the stalled BBB bill. "Are we stopping? No. Is the president going to worry so much about Ukraine that he can't focus on domestic? No," McCarthy said. It's a sentiment echoed by U.S. Climate Envoy John Kerry, who told CNN's Ella Nilsen Thursday that Congressional action on climate change was "absolutely imperative," though he conceded the obvious, saying "it's not going to be Build Back Better; it's going to be something different." Kerry also told Ella he plans to remain with the Biden administration through COP27 this November in Egypt, indicating the former secretary of state wants to cement progress on the goals he and others laid out in last year's climate talks held in Glasgow, Scotland. "We hope to go to Sharm el-Sheikh with a clear roadmap of what has been accomplished with respect to those promises made, and what has been done to raise the level of ambition and commitment from those who haven't yet done that," Kerry said. Kerry spoke to Ella from Paris where he is attending the International Energy Agency ministerial. Manchin, whose opposition tanked BBB in December, is also attending and sat down for dinner with Kerry. The two "had a nice conversation about it all," Kerry said without elaborating. Bobby Andres, senior policy adviser for the Senate Finance Committee, said at the ACORE forum that lawmakers will need to make "hard decisions" in finding a solution that can sit with everyone, including Manchin. But he added "we're still optimistic about the path forward for passing this package and preserving the bulk of what we had in December." Read more from Kelsey on the ACORE forum. THE SENATE SCHOOL OF MINES: Manchin and Barrasso are teaming up on a bill boosting mining education. The pair introduced the Mining Schools Act, which would create a grant program for mining schools to recruit students and develop research and demonstration projects. It would also create a Mining Professional Development Advisory Board to advise the Energy secretary on grant use and to sift through applications. "A strong and skilled mining workforce is critical to reducing our reliance on foreign supply chains, increasing our deployment of renewable energy technologies and maintaining our energy security," Manchin said in a statement. "In the last few years, however, this workforce has decreased as universities across the country struggle to enroll students in their mining and geological engineering programs." Republicans frequently cite foreign control over minerals needed for electric vehicles and the clean energy transition as a hole in Democrats' arguments that clean energy would lead to independence from foreign suppliers. Read the bill text here. DUCKWORTH GOES AFTER PRICE GOUGING: Sen. Tammy Duckworth (D-Ill.) introduced a bill Thursday that would make it illegal under the Federal Trade Commission Act to sell gasoline during an international crisis impacting oil markets at prices that are "unconscionably excessive" and "indicates the seller is taking unfair advantage of the circumstances related to an international crisis." The bill, dubbed the Gas Price Gouging Prevention Act, gives the president the power to determine what constitutes an applicable international crisis for a period of at most 30 days, though that period can be renewed. Read the bill text here.
| | | | 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. | | | | | | | | FINK ON TOUR: Blackrock Chief Executive Larry Fink met with oil and gas executives and at least two Republican senators while in D.C., multiple people told ME. Fink was invited several months ago to talk at a regular board meeting of the American Petroleum Institute, and he got some face time with Sens. John Thune (R-S.D.) and Dan Sullivan (R-Alaska). Executives who talked with Fink mainly wanted to hear the investor's take on the state of the industry and also offer him a chance to expound on his belief, laid out in his letter to shareholders released Thursday , that Russia's invasion of Ukraine "has put an end to the globalization we have experienced over the last three decades," said one of the sources, who requested anonymity given that the talks were private. Fink's visit was considered particularly timely given that Wall Street is considered the biggest factor in whether U.S. oil companies are going to grow production.
| | | — Shuchi Talati is leaving her post as chief of staff at the Energy Department's Office of Fossil Energy and Carbon Management. — Kevin Sligh will be the Interior department's new director of the Bureau of Safety and Environmental Enforcement. He previously served a number of roles at FEMA, including Individual Assistance Division Director, Senior Adviser on Equity and Deputy Regional Administrator. — The National Rural Electric Cooperative Association announced Angela Strickland to lead its Business and Technology Strategies Group, Scott Barash to be senior vice president and general counsel, and Digna Louis as chief financial officer.
| | | — "ConocoPhillips plans sale of Texas, Oklahoma gas assets," via Reuters. — "Germany sets out €16bn aid package to counter soaring energy costs," via The Financial Times. — " Total Vows to Slash Methane as Investors Demand Big Oil Do More," via Bloomberg. — "G-7 leaders pledge action to address food shortages caused by war," via POLITICO. THAT'S ALL FOR ME!
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