| | | | |  | | By Matthew Choi | With help from Kelsey Tamborrino and 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 warned consumers are going to feel some pain from the new ban on Russian energy imports, which came as gasoline prices climbed to a new record high. — Those high prices at the pump could spur greater interest in alternative energy and longer-term economic harm for fossil fuel interests. — The head of Ukraine's natural gas company warned the country needs more support than punitive financial measures. WELCOME TO WEDNESDAY! I'm your host, Matthew Choi. Congrats to EPRI's Rachel Gantz for knowing Highclere Castle, setting of " Downton Abbey," is the seat of the Earls of Carnarvon. For today's trivia: Who created the oldest extant violin? 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: Biden bans Russian oil imports. What should we expect next?
| | | | | 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 | | | | | | PUTIN'S PRICE HIKE: Now that President Joe Biden put to rest the will-he-won't-he game over banning Russian energy imports yesterday, the question is, just how much is it going to hurt? Quite a bit, the president acknowledged when he announced the import ban, and the direct impacts on consumers are already visible. Average retail gasoline prices broke the 2008 record, surpassing $4.17 Tuesday, according to AAA. While the 2008 record near $4.10 adjusted for inflation is closer to $5.35 in today's dollars, some states are already seeing numbers surpassing even that. California's average reached $5.44 on Tuesday, and signs indicate the rest of the country may see prices keep climbing. U.S. benchmark WTI futures flirted with $130 a barrel Tuesday before settling at $123.70, up more than $4 from the day before.
| The White House isn't sugar coating the message. "They're going to go up," Biden said bluntly when asked about gas prices. "Can't do much right now … Russia is responsible." During his Tuesday speech revealing the import ban, Biden highlighted the latest release from the Strategic Petroleum Reserve coordinated with allies as an avenue for some immediate relief. And more supplies could be on the way, with International Energy Agency head Fatih Birol saying the 60-million-barrel release was only an "initial response," the Financial Times reports. But many of the solutions the White House is highlighting to address the pain — from transitioning toward renewable energy to encouraging U.S. fossil fuel companies to take advantage of their leases and drill away — take a long time, and they won't be able to immediately gloss over the loss of a country that supplies about 10 percent of the world's crude. And though the U.S.' position as an energy powerhouse puts it in a far better position to wean off Russian energy than its European and Asian allies, U.S. resources are still beholden to market forces driven globally — especially if less energy-independent countries also turn off Russian imports. "These are all terrible trade offs that have to be made and terrible challenges," said Sheila Hollis, acting executive director of the United States Energy Association. "It's a short-term sacrifice for long-term plans." While he did offer some praise to companies that have increased output and abandoned Russian operations because of Vladimir Putin's invasion of Ukraine, Biden did also warn U.S. producers not to engage in "excessive price increases or padding profits or any kind of effort to exploit this situation." And he rejected criticism that he had held back the industry, highlighting the fact that the overwhelming majority of onshore oil production takes place on private land, not federal property, and that companies "have 9000 [permits] to drill onshore" that are sitting idle. "So let me be clear. Let me be clear, they are not using them for production now. That's their decision," he said. For a break down on how the administration settled on an import ban, POLITICO's Andrew Desiderio, Jonathan Lemire, Josh Siegel and Steven Overly have got you covered. WHEN PRICES HURT TOO MUCH FOR INDUSTRY: Fossil fuels are relatively inelastic, but energy executives at CERAWeek fretted there could come a point where a high price ends up killing demand. Josu Jon Imaz, CEO of Spanish energy firm Repsol, told attendees that "we can't sustain this level prices. We need an (energy) transition, not a destruction," according to Reuters. Analysts say that could end up pushing consumers toward alternative energy sources, greater efficiency and electric vehicles, POLITICO's Ben Lefebvre reports. Biden and environmentalists were certainly enthusiastic to push in that direction Tuesday. "Loosening environmental regulations and pulling back clean energy investment won't …lower energy prices for families. But transforming our economy to run on electric vehicles powered by clean energy with tax credits to help American families winterize their homes and use less energy — that will," Biden said. "If we do what we can, it will mean that no one has to worry about the price at the gas pump in the future."
| | | | 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. | | | | | | | | GOOD BUT NOT ENOUGH: Yuriy Vitrenko, CEO of Ukraine's state-owned gas company Naftogaz, praised the ban on Russian energy imports but pushed for further assistance — including direct defense aid. "It's better when you combine sanctions with some defense help, at least some kind of air defense systems, some kind of modern air-defense systems, fighter jets, stuff like that — or ideally even no-fly zones, for example, over some critical infrastructure or parts of Ukraine," he told POLITICO's Betsy Woodruff Swan shortly before Biden announced the import ban. "A combination works the best," he added, "because purely economic sanctions — it's also an option, but it's a very expensive option and sometimes it's not the fastest." Meanwhile, the European Union agreed in principle to further sanction Russia, with ambassadors expected to finalize the punitive measures today, Barbara Moens and Jacopo Barigazzi report for Pros. The EU is also eyeing a long-term strategy to quit Russian fossil fuels potentially by 2030. The strategy includes reducing overall fossil fuel consumption while diversifying overseas gas sources.
| | | FOUR TO THE FLOOR: Four energy nominees are headed to the full Senate for confirmation after advancing out of the Senate Energy Committee on Tuesday. The nominees include: Shalanda Baker, for director of DOE's Office of Minority Economic Impact; Joseph DeCarolis, for administrator of the Energy Information Administration; Asmeret Asefaw Berhe, for director of DOE's Office of Science; and Sara Bronin to be chair of the Advisory Council on Historic Preservation. Maria Robinson, the nominee to lead DOE's Office of Electricity, did not advance out of the committee. Robinson faced stiff GOP opposition, including from ranking member John Barrasso, and her nomination vote got pushed until there could be enough supporters present to move her forward. Robinson was rumored to be under consideration for the FERC seat vacated by Neil Chatterjee, which was ultimately filled by Willie Phillips. Kelsey Tamborrino has more from the mark up. WYDEN INTRODUCES CRITICAL MINERALS BILL: Senate Finance Chair Ron Wyden (D-Ore.) introduced legislation Tuesday that would establish a $50 million critical mineral environmental processing and mining cleanup grant program at the Interior Department. An eligible grant recipient would need to have an interest in constructing, expanding or modernizing critical mineral facilities, and demonstrate strong labor protections like prevailing wage requirements. In announcing the Critical Mineral Environmental Processing and Mining Clean Up Program, Wyden pointed to the United States' reliance on China and Russia for imports of the critical minerals used in domestic manufacturing of everything from electric vehicle batteries to smartphones. "It's past time the United States became a competitive producer of critical minerals and weans itself off of both foreign oil and gas imports and the critical minerals that are essential to building the next generation of clean energy products like batteries," he said in a statement. GOP PRESSURES EPA TO PAUSE WOTUS RULEMAKING: Over 200 House Republicans sent a letter urging the Biden administration against continuing with its Waters of the U.S. rulemaking until after the Supreme Court rules in the Sackett case — something that likely won't happen until 2023. The Sackett ruling could impose a "more limiting test" on federal authority, which would in turn require yet another rulemaking. EPA and the Army Corps of Engineers "should instead use this time to continue meaningful engagement with stakeholders," said the letter led by Transportation and Infrastructure ranking member Sam Graves(R-Mo.). GOP SC-GHG PROBE: Senate Environment and Public Works ranking member Shelley Moore Capito and House Energy ranking member Cathy McMorris Rodgers want to know how the Biden administration is getting on developing a social cost of greenhouse gas — particularly after a federal judged blocked Biden's social cost of carbon last month. In a Tuesday letter to EPA administrator Michael Regan, the two Republicans requested details in how the agency was creating the metrics, citing transparency concerns with how they were developed under the Obama administration. Tagged in the letter is Joseph Goffman, whom the White House said Biden would nominate to lead the Office of Air and Radiation (more on that later). He was included in the Tuesday letter in his capacity as principal deputy assistant administrator in the office. Read the GOP letter 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. | | | | | | | | BEHIND CLOSED DOORS? New England's grid operator had an eyebrow-raising change of course over a controversial market rule last month, and it wasn't just the policy that had folks chatting, POLITICO's Catherine Morehouse reports. The process around the decision alarmed some outside observers as undermining transparency, and the closed-door sessions are a standard feature designed to foster frank discussion. But the majority of market participants in the New England Independent System Operator's stakeholder group, the New England Power Pool, find the rules helpful in brainstorming ideas without too much formality or the glare of the spotlight. But last month's meeting over the controversial market rule highlighted tension over the organization's processes. The operator's decision could effectively prolong a raised floor price for state-subsidized resources bidding into the wholesale market — which renewables backers say comes at the detriment of their industry. Read more from Catherine here. A NEW AIR CHIEF: Goffman is getting the tap to serve as the next air chief for EPA — a critical position for the administration's climate and pollution agenda as the agency faces a Supreme Court challenge on its pollution-curbing authority. Goffman is no stranger to the job, serving as acting head of the air office since the start of the Biden administration. He is also a veteran of the office from the Obama years, when he was a key player in the creation of the Clean Power Plan. Goffman's nomination came unusually late into Biden's term — 412 days — which Capito noted in a statement Tuesday. Meanwhile, Chair Tom Carper welcomed the nomination of Goffman, a former staffer, as someone with "the heart of a public servant," though Carper acknowledged "that his nomination will likely face opposition by some in the Senate." Other nominees: Biden also intends to nominate Evelyn Wang as director of the Advanced Research Project Agency-Energy at the Energy Department, which focuses on developing technologies that are not yet ready for private sector investment — a key agency as the Biden administration seeks to develop and deploy advanced clean energy technologies. Wang is the head of the Mechanical Engineering Department at the Massachusetts Institute of Technology and the Ford Professor of Engineering. A leading researcher in phase-change heat transfer, she also served as associate director of the Solid State Solar Thermal Energy Conversion Center. The White House also said Tuesday it will nominate David Applegate as director of the U.S. Geological Survey. Applegate is currently the associate director for natural hazards, exercising the delegated authority of the director. SRF MEMO FOCUSES ON EQUITY TARGETS: EPA on Tuesday issued a 56-page memo with requirements and recommendations for how states must use the $43 billion flowing into the twin state revolving funds for clean water and drinking water from last year's big infrastructure package. It's a little dry (ba-dum-TISH) unless you're a state program administrator, but the overarching message is that the law specified significant portions of the money should be targeted to disadvantaged communities, a designation states will have to navigate. And it highlights other requirements, including that $15 billion targeted for lead service line replacements must cover the entire line, "not just a portion."
| | | | A message from ExxonMobil:   | | | | | | ME FIRST – GREENS, LABOR PUSH FOR FORCED LABOR LAW IMPLEMENTATION: Labor and environmental groups are pressing the Department of Homeland Security to swiftly implement the recently enacted Uyghur Forced Labor Prevention Act, H.R. 6256 (117) , including a focus not only on goods manufactured in Xinjiang, but also raw materials such as polysilicon that are mined or refined in China's Xinjiang Uyghur Autonomous Region, but may be manufactured elsewhere. "Given the lack of transparency in the supply chains of China, such a presumption of illegality is necessary in order to help ensure that the U.S. is not complicit in importing solar panels and other goods made with forced labor," the groups — including the BlueGreen Alliance, Sierra Club, United Steelworkers and National Wildlife Federation — wrote in comments to DHS. The department is seeking public comments on implementing the UFLPA until March 10.
| | | — Amanda Aguirre is joining the White House Council on Environmental Quality as senior adviser to Chair Brenda Mallory. Aguirre will focus on recruiting staffers for CEQ's environmental justice team and work across the White House on environmental justice issues. Aguirre is a veteran of the Obama EPA and the Biden-Harris Transition Team.
| | | — "Saudi, Emirati Leaders Decline Calls With Biden During Ukraine Crisis," via The Wall Street Journal. — "Dairyland Power Cooperative considers adding nuclear power to its energy portfolio," via Wisconsin Public Radio. — "U.S. ban on Russian energy imports does not include uranium," via Reuters. — "Climate change, nuclear war occupy Jerry Brown in retirement," via The Associated Press. — " Shareholders asked oil giant Chevron to cut emissions. Now some want the chairman ousted," via The Washington Post. 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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