| | | | |  | | By Matthew Choi | With help from Alex Guillén 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 may be closer to taking action to stop Russian oil imports, but the issue is raising questions about just how far the administration will go to court alternative oil supplies. — A suspiciously timed cyberattack was launched against the biggest U.S. suppliers of liquefied natural gas. — Laura Daniel-Davis' nomination to oversee oil and gas leasing is facing fresh hurdles, this time from Sen. Joe Manchin. HAPPY TUESDAY! I'm your host, Matthew Choi, back from vacation. Thanks to my colleagues Zack Colman and Josh Siegel for covering for me. If you sent me an email while I was gone, please feel free to re-up it. And now for some trivia! Congrats to Kyle Oliver of BlueWater Strategies for knowing Demar DeRozan of the Chicago Bulls broke Wilt Chamberlain's record by scoring at least 35 points and making at least half his shots in eight straight games. For today: "Downton Abbey" is filmed at Highclere Castle, the family seat of which British peer? 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: The environmental impact of Russia's invasion.
| | | | | 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 | | | | | | THE RUSSIAN GORDIAN ENERGY KNOT: The White House is getting twisted up over how to react to surging prices for oil and gasoline, defend its climate change priorities and address the uncomfortable compromises it appears to be considering with unfriendly nations to tackle the global energy squeeze. With prices at the pump likely to reach new records any day now, the Biden administration has lots at stake as it seeks to ease the inflationary pain from rising energy costs while keeping the maximum pressure on Vladimir Putin for his invasion of Ukraine. White House Press Secretary Jen Psaki stuck to the facts at Monday's briefing: U.S. oil production is rising and Biden is committed to shielding consumers from the high energy costs. But even though Americans have told pollsters they favor banning Russian petroleum imports, pressure is mounting for Biden to take some action. The White House is having an "an active discussion" on how to cut consumption of Russian energy, Psaki said, but no decisions have been made. Meanwhile, scrutiny is rising about the U.S.' talks with Venezuela, Iran and Saudi Arabia — none of which are ostensibly about crude oil supplies, even though the topic of those countries boosting their output to make up for the potential loss of millions of barrels of Russian crude seems to be a common theme. Asked about Venezuela, which has been subjected to U.S. sanctions since 2019, Psaki said the purpose of a recent diplomatic trip there was "certainly, energy security — but also to discuss the health and welfare of detained U.S. citizens." With Iran, the talks about reinstating a freeze on nuclear activities had been advancing (but which Moscow may have complicated ), opening up the potential for a couple million barrels of crude to return to the market. But again, Psaki said "the discussion of oil is a part of that, but the most important reason is to prevent them from acquiring a nuclear weapon." And likewise with the No. 1 oil exporter, Saudi Arabia, a recent visit by administration officials was to "discuss a range of issues — including the war in Yemen, including security in the region, and certainly including energy security," she said. Meanwhile on the Hill, lawmakers are zeroing in on legislation to hit the Russian fossil fuel industry on the Hill. Top trade policy makers came to a bipartisan agreement on punitive measures on imports from Russia and Belarus, POLITICO's Steven Overly reports. That comes after Sen.Joe Manchin (D-W.Va.) released his own bipartisan legislation to block Russian energy imports alongside Republican Sen. Lisa Murkowski (R-Alaska) and a group of bipartisan lawmakers last week. "I'd love for President Biden to do it on his own. I think he's looking at it very seriously," Manchin said on Monday. But the White House is still tied to its fears that import ban could cause already spiking gasoline prices to go haywire (always unwelcome during an election year). The national average for retail gasoline prices already breached $4 over the weekend. Still, it's hard to ignore a cause with massive congressional support on both sides of the aisle — and even within the administration itself, POLITICO's Andrew Desiderio, Burgess Everett and Jonathan Lemire report. That sentiment isn't share by some key allies in Europe, who depend on Russian energy deliveries. German Chancellor Olaf Scholz rejected an import ban, arguing the continent has no other energy alternatives to meet its current needs (still, Reuters reported the EU is making longer term plans to eventually phase out Russia gas, oil and coal imports). And while the U.S. has been herding allies to send over liquefied natural gas to Europe in order to lessen reliance on Russian energy, focusing on LNG will not be enough to get Europe off of Russian energy within the year, said Julian Popov, fellow at the European Climate Foundation and former Bulgarian Environment Minister. "Each gas export terminal takes four to six years to build, meaning enough US gas to power businesses and heat homes will never reach Europe in time for next winter," Popov told reporters Monday. Meanwhile at CERAWeek in Houston, industry leaders also warned their efforts to boost production won't spare consumers from ballooning gasoline prices any time soon. Exxon Mobil is working to increase production in the Permian Basin by 100,000 barrels per day, and Chevron has plans to boost its Permian production by 60,000 barrels per day. Read more from POLITICO's Ben Lefebvre on the ground at the conference. GAS HACK ATTACK: Just as Europe's demand for natural gas soared, some of the U.S.' largest natural gas firms were targeted in an attack suspiciously timed with Russia' invasion into Ukraine, Bloomberg reports . The cyberattack occurred the day before Russia's incursion and was directed at nearly two dozen major suppliers and exporters, including Chevron, Kinder Morgan and Cheniere Energy (who said the attack breached employee accounts but didn't get into the company's operations network). Almost two thirds of U.S. LNG shipments have been going to Europe as demand ballooned amid the winter energy crunch, and Germany is building out its LNG infrastructure to accommodate more imports. Several analysts say Russia has artificially contributed to the supply pinch by holding back natural gas, and Europe has been further scrambling for alternative gas sources since Russia's invasion. Germany also turned its back on the Nord Stream 2 pipeline that would have carried gas from Russia directly to its shores following Russia's advances into Ukraine. Gene Yoo — chief executive officer of Resecurity Inc., the firm that discovered the attack — told Bloomberg he believed the attack was by state-sponsored hackers, but wouldn't elaborate.
| | | | HAPPENING TODAY, INTERNATIONAL WOMEN'S DAY, AN IMPORTANT CONVERSATION ON THE WOMEN IN AFGHANISTAN: Join Women Rule editor Elizabeth Ralph for a panel discussion on the future for Afghan women. Guests include Hawa Haidari, a member of the Female Tactical Platoon; Cindy McCain, U.S. ambassador to the United Nations Agencies for Food and Agriculture; Roya Rahmani, Afghanistan's first female ambassador to the U.S.; and Sen. Jeanne Shaheen (D-N.H.). Learn how female Afghan veterans are planning their futures, what the women still in Afghanistan face, and what the U.S. can do to help. REGISTER HERE. | | | | | | | | DANIEL-DAVIS DELAYED: The Senate Energy Committee will vote on a spate of nominations today. But absent on today's docket is a critical appointee for the administration's oil and gas leasing program. Laura Daniel-Davis, Biden's pick for assistant Interior Secretary for Land and Minerals Management, got left off the meeting agenda, and Chair Joe Manchin's office said he isn't ready to decide on her nomination just yet. Citing Daniel-Davis' would-be role in overseeing federal energy leasing, the West Virginian "would like to see more from the Department that it intends to get back to the business of leasing and production on federal lands and waters in a robust and responsible way," Manchin spokesperson Sam Runyon told ME. Funny thing is, Daniel-Davis already had a committee vote last November, and Manchin did vote to confirm her then, saying she was a competent and experienced civil servant through multiple administrations. That vote was a 10-10 tie on party lines, with Republicans on the committee in stiff opposition for her role in the administration's federal oil and gas leasing policy. She was put through the ringer again after the full Senate failed to take up her confirmation by the end of last year, and she was brought back to the committee to face another round of questioning from the committee last month. But conditions have changed since that November vote. Notably, the Biden administration got a court order vacating its latest sale of offshore oil and gas leases — and opted last week not to appeal it. "As we continue to watch energy being used as a weapon of war by Vladimir Putin, the need for increased American energy production is clear to ensure domestic supplies and help our allies," Runyon said. Neither the White House nor the Interior Department offered comment. Folks who are up for a vote today: Shalanda Baker, tapped to lead DOE's Office of Minority Economic Impact, and Asmeret Berhe, nominated to head DOE's Office of Science, are both facing committee votes for a second time today after advancing out of committee without a floor confirmation last year. The committee will also vote on Joseph DeCarolis to lead the Energy Information Administration, Maria Duaime Robinson to be assistant secretary of Energy for the Office of Electricity and Sara Bronin to be chair of the Advisory Council on Historic Preservation. Elsewhere in committee: The House Energy and Commerce Committee's energy subpanel will also have a hearing today on beefing up domestic electric vehicle deployment and manufacturing. The bipartisan infrastructure package allocated $7.5 billion for EV charging infrastructure, and the Biden administration hopes to have half of all new EVs sold in 2030 be zero-emission vehicles. Democrats are pushing for electric vehicles as a way to lessen dependence on foreign fossil fuels, but the crisis in Ukraine could create issues for electric vehicles as well. Russia is a major supplier of raw materials crucial of EV manufacturing, including palladium and nickel. Ukraine is also a producer of neon, needed in semiconductors (The New York Times goes into the issue here). BBB HERE WE GO AGAIN: Senate Majority Leader Chuck Schumer offered an overture to Democrats' renewed effort at a social spending plan Monday. In a "Dear Colleague" letter, Schumer said the caucus was focused on addressing rising costs in "energy, prescription drugs and health care, and the costs of raising a family." The letter emphasized working across the aisle on "a number of bipartisan legislative efforts." Manchin offered a rough outline of what he'd be down for in a renewed BBB last week, with revenues coming in on the tax and drug front and new spending directed to address climate change, POLITICO's Burgess Everett and Nicholas Wu reported . But while he was largely on board with Democrats' clean energy tax credits last year, he indicated the Russian invasion of Ukraine marked a shift in the nation's energy needs. In addition to a ban on Russian energy imports, Manchin called for shoring up domestic energy production, including in fossil fuels. But the original clean energy provisions under BBB would bring about major relief from Russian fossil fuels, Robbie Orvis, senior director of energy policy design at Energy Innovation, argues in an analysis today . Orvis writes that BBB's incentives for zero-emission vehicles would reduce U.S. oil demand by 2027 by a greater quantity than the U.S.'s 2021 Russian oil demand. It would also reduce U.S. demand for natural gas by 2030 by an amount about 85 percent of all Russian natural gas to the EU.
| | | | A message from ExxonMobil:   | | | | | | CLOSER TO DISCLOSURE: The Securities and Exchange Commission is expected to begin the process of rolling out its long-awaited rule governing how publicly traded companies must disclose their risks from climate change as soon as Wednesday, two people familiar with the discussions tell POLITICO's Zack Colman. While the date could slip — it already has multiple times — whatever rule the SEC issues could profoundly alter how companies and investors assess their exposure to the effects of climate change and policies to rein in emissions. "This is the biggest rule I think the SEC has done in quite some time," said Tim Doyle, a senior adviser at Bipartisan Policy Center's ESG and corporate governance program. Two major issues have bedeviled the SEC decision. One is how to handle "Scope 3" emissions — meaning those associated with the end-use of a product, such as emissions from gasoline rather than emissions from extracting oil. The other is how to assess materiality, which roughly refers to issues a reasonable investor would want to know that could affect a company's bottom line. One person familiar with the commission's thinking said Scope 3 is likely to be phased in at a later date given concerns about accounting methodology. That's a sizable blow for climate advocates who contend omitting disclosure of those emissions would let some of the biggest contributors to climate change, like oil companies and banks, off the hook for a majority of the planet-heating pollution attributed to them. CLEAN TRUCKING: EPA proposed a new regulation Monday that would curb nitrogen oxide emissions from big trucks and other heavy-duty vehicles, such as buses. The rule would amp up NOx emissions standards in two steps, one for model year 2027 vehicles and one for 2031. EPA estimates the rule would reduce truck emissions of NOx by 61 percent in 2045. POLITICO's Alex Guillén and Tanya Snyder have more details on the rule. Environmentalists and public health advocates were pleased with the direction EPA is heading — but some weren't thrilled with the agency's speed, with multiple critics arguing EPA must do more to promote electric trucks. California and other states already require more electric trucks, and sooner, argued Union of Concerned Scientists President Johanna Chao Kreilick. "Even the most stringent alternative in the proposed federal NOx standards lags state-level standards, delivering insufficient pollution emission reductions and failing to require zero-emission truck adoption," she said. "We will be urging the Biden administration to rethink its approach and set an ambitious course, especially for communities breathing in dangerous levels of diesel pollution along freight corridors," said Paul Cort of Earthjustice.
| | | | 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. | | | | | | | | — "Amazon Is Less Able to Recover From Droughts and Logging, Study Finds," via The New York Times. — "Lawmakers approve path to end net metering for solar energy," via Florida Politics. — " Hawaii lawmakers stir debate over controversial wood-fueled energy project," via The Honolulu Star-Advertiser. — "How the Letter Z Became a Russian Pro-War Symbol," 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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