| | | | |  | | By Matthew Choi | With help from 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.
| | | — The Biden administration is encouraging the oil and gas industry to produce more, but industry executives are staying skeptical. — Progressives want a tax on oil companies' added profits amid white-hot global energy prices. Meanwhile, some of their peers are proposing using the Defense Production Act to help spur on more domestic oil and gas output. — Florida Republicans are irate over the Biden administration's reported overtures to Venezuela for its oil, casting the move as a betrayal of its human rights stance. WELCOME TO THURSDAY! I'm your host, Matthew Choi. Congrats to USEA's Nicole Buckley for knowing Bomb Voyage made a cameo in " Ratatouille." For today's trivia: What is the sixth most populous city in Bolivia? 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: Dems, GOP are united on energy policy – for now.
| | | | | 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 | | | | | | WITH US OR AGAINST US? The Biden administration has been pushing the oil and gas industry to drive up production in order to help offset the loss of Russian energy imports, with Energy Secretary Jennifer Granholm telling executives: "In this moment of crisis, we need more supply." But industry executives aren't letting their guard down, and are still wary of the administration's long-term goals, POLITICO's Ben Lefebvre reports. The war in Ukraine has been putting energy prices through the mixer this week. Oil prices shot up to $130 before settling at $106 Thursday. Retail gasoline prices hit new all-time records three days in a row. It's prompted the administration to look for new energy sources and issue assurances that its policies aren't targeting fossil fuels in a bid to calm the markets and consumers. President Joe Biden firmly said this week that it's "simply not true that my administration or policies are holding back domestic energy production." That doesn't mean the industry is buying it. Some executives and representatives argue the administration's pause on new federal oil and gas leases caused them real harm, if not in direct opportunity losses, then in chilling investor confidence. The administration also isn't abandoning hope on reducing the nation's planet warming emissions and transitioning toward cleaner energy. The country has to ensure that "as we move to renewables and green and clean technologies, we are not developing a new dependency that is repeating the mistakes of the 20th century," Amos Hochstein, White House special envoy and coordinator for international energy affairs, said at CERAWeek in Houston. "The global energy crisis has been hit by the tragic situation unfolding in Ukraine," Amin Nasser, head of Saudi Aramco said at the conference. "It has exposed the limitations of current energy policies and is a bleak reminder of the impact that geopolitics can have on fragile energy transition plans ... Mixed signals have only added to the chaos." Read more from Ben, who's on the ground in Houston this week.
| | | | 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. | | | | | | | | I WON'T WINDFALL FOR YOU: Sen. Sheldon Whitehouse(D-R.I.) and Rep. Ro Khanna (D-Calif.) released legislation Thursday to tax large oil companies for windfall profits made during the recent surge in crude prices from tight supplies and disruptions related to Russia's invasion of Ukraine. The bill, backed by a handful of Democrats, would charge a 50 percent tax on profits oil companies earn above a $66 per barrel price — the average price from 2015 through 2019 — and send half of that revenue to taxpayers. Whitehouse estimates a single filer would get a $240 rebate, while joint filers would get $360 per year if crude remains at $120 per barrel. "Setting aside climate just from a point of view of economics and national security, we need to get off this damn stuff," he told reporters. The tax would apply to companies that produced or imported at least 300,000 barrels of crude per day in 2019. Whitehouse said he hasn't talked to his whole caucus about the legislation, and while passing it on its own wasn't particularly realistic, he hoped it could hitch a ride on larger packages that aim to strengthen Europe's energy security or as a consumer relief measure to counter rising commodity prices. Khanna told POLITICO's Zack Colman that it's "not a unique proposal," given similar ideas are floating around in the European Union and United Kingdom. He noted oil and gas companies would still be profiting under the tax, but he also said it could incentivize more drilling to bring down the price and resulting tax burden. "You could either just reduce the price, or you could increase drilling," he said. Of course, Khanna is no drilling advocate — he's hammered oil and gas companies for producing too much, given fossil fuels drive climate change. WARTIME PRODUCTION: On the other side of the coin, at least a handful of lawmakers are toying with using the Defense Production Act to increase domestic oil and gas output following the Russian energy import ban. Reps.Jared Golden(D-Maine), Dusty Johnson (R-S.D.),Jim Baird (R-Ind.) and Don Bacon (R-Neb.) pitched it in a letter to Biden on Thursday, saying the president could use the emergency measure "to provide financial incentives to the private sector at a large scale through subsidies and loans to ensure that industry is able to access the raw materials and implement refinery enhancements needed to boost production." Senate Energy Chair Joe Manchin also brought up the DPA during a hearing on the weaponization of energy resources Thursday. Citing the need to replace Russian energy imports with U.S. produced energy, Manchin said the DPA was "the only thing I know that we can use to have the urgency that we need." Read more from your host. MAD ABOUT MADURO: Florida Republicans are outraged the Biden administration spoke to the Maduro regime in Venezuela in its quest to find additional crude oil supplies as it prepared to impose a ban on Russian petroleum imports. And they want to know just what the administration is willing to trade with Caracas. Reps. Carlos Gimenez, Mario Diaz-Balart and Maria Elvira Salazar, as well as Sens. Marco Rubio and Rick Scott wrote to Biden, Secretary of State Antony Blinken and Energy Secretary Jennifer Granholm denouncing any dealing with President Nicolás Maduro "or his henchmen." "By negotiating with the Maduro dictatorship, your administration is undermining American foreign policy towards Venezuela and is neglecting the U.S. commitment to the Venezuelan exile community," the lawmakers write. Thousands of Venezuelans fleeing the Maduro regime have settled in South Florida in recent years. The U.S. formally recognizes Juan Guaidó as the country's legitimate president. The White House didn't respond to ME's request for comment, but when White House Press Secretary Jen Psaki was asked this week about the administration's forays with Caracas, she stressed it was focused on returning U.S. citizens and ensuring their well being in the country. She acknowledged that energy issues came up in the discussions and "there are a range of issues to discuss moving forward." ICYMI: POLITICO's Sabrina Rodriguez went into the tense reaction in Florida to the administration's overtures to the Maduro government earlier this week. EJ IN THE 718: House Oversight Chair Carolyn Maloney and Natural Resources Chair Raúl Grijalva will be in Queens, New York, today to meet with advocates and Borough President Donovan Richards to discuss environmental justice priorities for the area. They will talk about legislative priorities and the implementation of the Biden administration's Justice40 initiative. WATER YOU DOING NEXT WEEK? The Senate Environment and Public Works Committee will have an oversight hearing on the Clean Water State Revolving Fund program on Wednesday.
| | | | A message from ExxonMobil:   | | | | | | REGAN READIES CROSS-STATE NOX UPDATE: EPA will release new interstate ozone requirements today to update the Cross-State Air Pollution Rule, Administrator Michael Regan told energy executives at CERAWeek Thursday. The rule will require states to limit their NOx emissions — a precursor for ozone — depending on their contributions to downwind issues and "help states fully resolve their Clean Air Act 'good neighbor' obligations for the 2015 ozone national ambient air quality standard." Regan made the announcement while pitching the agency's suite of regulations on power plants' air, waste water and solid waste emissions. Other regulations coming down the pipeline include ones targeting natural gas turbine emissions and coal ash, Regan said. "We can move forward with our health-based regulations, complementing revisiting our greenhouse gas regulations of the future and really provide a pathway for industry to give us safe, affordable and reliable electricity options for the future," he said. Alex Guillén has more for Pros. HIT THE GAS, JENNIFER: French Minister for the Ecological Transition Barbara Pompili said she asked Granholm to boost natural gas production to help Europe diversify its energy supplies as the EU moves to slash imports from Russian by two-thirds. The EU currently imports roughly 40 percent of its gas and 30 percent of its oil from Russia. "'You have to increase your production if you're going to help us,'" Pompili said, relaying her conversation with Granholm to reporters. "She told me she will try to do that." The comments come after Granholm told the CERAWeek conference that the U.S. is on "war footing," and implored oil and gas companies to up their drilling. Pompili added that Granholm informed her the Biden administration would ban Russian energy imports "a few days" before the White House publicly announced the measure. "She told me, 'We don't ask you to do the same, we totally understand that you are in a different situation. We want to send a signal.'" Speaking of signals — the one the EU is sending on gas is, well, a little complicated. U.S. drillers use fracking to extract most of its gas, but that practice is banned in France. Pompili demurred when asked if she understood she was asking the U.S. to employ a practice that's prohibited at home. "This dependency we have to Russian oil and gas has consequences, and of course in France we ban this technology," she said. "The only thing I can say is that in this period of emergencies we need to find solutions." FOR YOUR RADAR: POLITICO's The Recast has named the 40 power players of 2021. From strategists to politicians, activists to influencers, they undeniably impacted the intersection of race, politics and policy. Explore the full list here. And don't forget to post about the list on your socials — you can use #TheRecast40 — or in your group chats. Among the power players is Interior Secretary Deb Haaland for "taking charge of the very governmental agency that oppressed her people."
| | | | 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. | | | | | | | | GAS TAX CUT GETS STATE SUPPORT: Though it has tepid support on Capitol Hill, a gas tax holiday is gaining some steam in the states. Maryland Gov. Larry Hogan and his state's legislative leaders announced they planned to pause the state's gas tax to offer temporary relief for surging gasoline prices, The Washington Post reports . In New Jersey, State Sen. Ed Durr plans to introduce a bill that would give $1.5 billion in gas tax rebates for households making less than $250,000 a year, Ry Rivard reports for Pros. Georgia Gov. Brian Kemp announced Wednesday he would suspend the state's gas tax through the end of May. Thursday was the third day in a row national average retail gasoline prices set new records, breaking $4.31. In California, that jumps up to a whopping $5.69. Gov. Gavin Newsom also suggested a break from the gas tax Tuesday. Lawmakers in Congress have pitched a gas tax holiday through the end of the year — and notably beyond the midterm elections — in a bid to ease inflation at the pump. High retail gasoline costs are a considerable political thorn in Democrats' side, and that is particularly unwelcome as the party braces for an expected shellacking at the polls. But a gas tax holiday doesn't have universal backing in the party, with House Speaker Nancy Pelosi questioning how it would prevent oil companies from simply pocketing the benefits while continuing to charge consumers higher prices. "If we can have a holiday that guarantees the consumer benefits rather than more profits for the oil companies, that would be a path that we could take," Pelosi said last week (POLITICO's Oriana Pawlyk has more).
| | | — "Canada looking at boosting oil pipeline flows to U.S.," via Reuters. — "Orsted Says BP Seeks to Block Part of U.K. Offshore Wind Farm," via Bloomberg. — " U.S. push to export LNG amid Ukraine crisis slowed by climate concerns," via Reuters. — "Rising metals prices threaten U.S. green energy push," via E&E News. 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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