| | | | |  | | By Matthew Choi | Presented by Chevron | With help from Alex Daugherty, Josh Siegel and Kelsey Tamborrino 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.
| | | — Interior Secretary Deb Haaland is in for an icy reception from Senate Energy Chair Joe Manchin today over the cancellation of offshore oil lease sales. — The House is slated to vote on Democrats' price gouging bill, though it has little political chance of becoming law and its critics say its just for show. — FERC will vote on permits for three natural gas projects at its open meeting. HAPPY THURSDAY! I'm your host, Matthew Choi. USEA's Nicole Buckley gets the trivia for knowing Camille sang Le Festin in "Ratatouille." For today: Who was Aristotle's father? 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: Promoting Canadian energy to America.
| | | | | A message from Chevron: At Chevron, we believe the fuels of the future can help power a brighter future. Find out how we're working to increase our hydrogen fuel production to help make heavy-duty transport lower carbon. | | | | | | HAALAND IN THE HOT SEAT: Interior Secretary Deb Haaland may be going to the Senate Energy Committee today to talk about her department's $18 billion fiscal 2023 budget request, but Chair Joe Manchin plans to grill her on the agency's decision to cancel offshore oil and gas lease sales. The agency said last week a planned sale off the Alaska coast was canceled due to a lack of industry interest and two others were scuttled because of ongoing court cases — but Manchin sees it as a sign the administration is neglecting American fossil fuels even as oil prices remain high. "When you were before the committee early last year, I told you that I supported the administration taking a brief pause to review the oil and gas program before resuming lease sales. In July, while you were here during last year's budget hearing, I made clear that the time for a pause had come and gone," Manchin will say, according to a draft opening statement shared with ME. "I'm sorry to say it has become crystal clear that the 'pause' is in fact a 'ban'." Manchin plans to counter administration talking points blaming the oil and gas industry for not using 9,000 federal drilling permits to boost supply. DOI has the power to press oil and gas companies to make use of their leases by raising rental rates gradually to disincentivize sitting on cheaper rates, he will say. And while Manchin supports increasing federal royalty rates to make federal leases more competitive with state and private markets, he plans to argue that the Bureau of Land Management went too far by raising onshore rates to 18.75 percent for the June 2022 sale (BLM has said it was matching state and private rates). And he will say his frustration is "at an all-time high" over the Biden administration's steps hinting at overtures with Iran, Venezuela and other OPEC members to replace Russian oil. DOI's budget request includes $51.7 million for the Bureau of Ocean Energy Management's Renewable Energy programs and $7.7 million to create an offshore renewable regulation program at the Bureau of Safety and Environmental Enforcement. It also includes $49.7 million for the Bureau of Land Management's Renewable Energy program and $11 million for renewable energy and transmission siting.
| | | | 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. | | | | | | | | PRICE GOUGING DAY: The House is expected to vote today on a bill, H.R. 7688 (117) , that expands the Federal Trade Commission's power to investigate oil companies that exploit emergencies to push prices to levels that are "unconscionably excessive." But in addition to the expected GOP resistance, some Democrats are trepidatious. House Speaker Nancy Pelosi tore into her party's holdouts on Wednesday, saying "you are for price gouging" if they vote against the bill, which has no prospects for passing the Senate. "I am certainly for doing anything we can in this moment. The American people need to see that we're trying," Rep. Jared Huffman told POLITICO's Josh Siegel. "Whether this is gonna move reality [affect prices], it seems unlikely, but we've got to keep trying." When asked about price gouging and the argument that companies aren't drilling in response to shareholder preferences, Sen. Ted Cruz (R-Texas) said that supposes that oil companies weren't profitable prior to gasoline price spikes this year. "Under that theory oil companies didn't want to make money and suddenly they do," Cruz said. "It's absurd." Average national gasoline prices yet again hit an all time record Wednesday at $4.567 per gallon, according to AAA. Wednesday was also the first time in history the average cost of gasoline breached $4 in every state. THE CHAMBER'S ENERGY PLAN: The U.S. Chamber of Commerce has some recommendations for Manchin, Sen. Lisa Murkowski and their bipartisan cohort eking out a new energy and climate bill. The policy guidelines include technology-neutral tax credits for decarbonizing energy, transportation and industry — akin to the tax credits in Democrats' reconciliation package last year and which Granholm said Wednesday she remains optimistic will eventually pass. The Chamber also called for an administration-wide push for energy security, à la President Joe Biden's all-of-government philosophy on combating climate change, and breaking down barriers to domestic oil and gas production. "We firmly believe that energy and climate policy must be established by Congress to be durable, and that the best way to promote the planning and innovation that will underlie an efficient energy transition is through legislation with bipartisan support," Martin Durbin, the Chamber's senior vice president of policy, writes. The recommendations are likely to be well received by Manchin, whose opening statement at today's ENR hearing reflects many of the same priorities. It's still unclear what will come out of the bipartisan discussions, with Manchin saying there was "good progress" at a Tuesday meeting but offering little else. Manchin was scheduled to meet with Senate Majority Leader Chuck Schumer on a path forward on a party-line reconciliation package on Wednesday afternoon, but they again kept their takeaways to themselves. Read the recommendations, dubbed the "Grand Bargain," here. BUDGET BUSINESS: Energy Secretary Jennifer Granholm testifies today at the Senate Armed Services Committee on the National Nuclear Security Administration's budget. NNSA Administrator Jill Hruby is also scheduled to testify. WRDA FORWARD: The House version of the Water Resources Development Act is headed to the full chamber after the Transportation and Infrastructure Committee voted to advance it Wednesday. As with the Senate version, it was a unanimous vote, with Democrats heralding its investments in restoration and environmental infrastructure, and Republicans praising its investments in securing critical ports and flood control to protect supply chains. A WATER BILL FOR TODAY: Lawmakers in both chambers are also gearing up to unveil a suite of water legislation today, dubbed the "Aquabus," which includes bills to centralize and make more accessible state, local and federal water data, as well as to bolster water managers' authority in the Rio Grande Basin. Rep. Melanie Stansbury (D-N.M.) is leading the legislation in the House while Sens. Martin Heinrich (D-N.M.) and Ben Ray Luján (D-N.M.) are leading in the Senate. Read the bill text here and here. ICYMI: Chris Frey is one step closer to being confirmed assistant EPA administrator for research and development after Schumer filed cloture on his nomination Wednesday night.
| | | | A message from Chevron:   | | | | | | FERC FEST: FERC holds its monthly open meeting today and plans to consider permits for three natural gas projects. Though the commission backtracked on its controversial policy statements increasing consideration of climate and environmental justice factors in permitting, Chair Richard Glick could issue a separate statement on the projects' greenhouse gas emissions as he did at the March open meeting, POLITICO's Catherine Morehouse reported last week. The projects on today's docket include a Berkshire Hathaway Energy subsidiary-owned pipeline in Utah, a capacity increase of a TC Energy pipeline in Wisconsin and a Spire Energy subsidiary compression project. ANOTHER AUXIN KERFUFFLE: Auxin Solar, the solar manufacturer petitioning for tariffs on solar component imports from four Southeast Asian countries, apparently misinterpreted BNEF data when making its case to the Commerce Department, the authors of the BNEF research told Canary Media. BNEF solar analysts Jenny Chase and Pol Lezcano wrote: "We do not think Auxin's use of our data accurately reflects our research and certainly does not reflect our house view." Auxin needs to prove the solar parts are from China and just passing through the Southeast Asian countries to be granted their anticircumvention petition. The California company cited BNEF data in saying "70% of the actual value of that equipment {solar panels} accrues to China where key, pre-assembly steps in the making of the equipment take place." Chase and Lezcano retort that the 70 percent figure does not account for capital expenditure in Southeast Asia for factories to transform Chinese components into functioning solar parts. But Auxin refuted the story as "preposterous," and told POLITICO's Kelsey Tamborrino in a statement that "investments in third countries are a separate factor from cost components of producing cells and modules in a third country. Auxin used the BNEF report for exactly what BNEF said: 'the 70% data point refers to the 'cash cost' of the components making up finished solar panels.' Auxin Solar addressed investments in a separate section of its petition, which is consistent with the law." RELATED: The White House told lawmakers this week it expects to act soon to ease the uncertainty for the solar industry about the trade probe into imports of solar equipment from four Southeast Asian countries. Read more from our Kelsey Tamborrino here.
| | | NERC KNOCKS SUMMER: Swaths of the country are at risk of power outages this summer due to unseasonably high temperatures and drought, according to a North American Electric Reliability Corporation assessment Wednesday. Western states and Texas were deemed to have "elevated risk" while the Midwest faces "high risk" of energy of capacity shortfalls. Drought and below-normal snowpack could threaten hydropower in the West, while Texas could experience higher peak demand due to hotter temperatures. Though investments in wind and solar have helped in Texas, the state could still face rolling blackouts if wind is low and demand spikes. Drought conditions in the Missouri River Basin threatens water used to cool thermal generators in the Midwest, according to the assessment. Stephen Bell, a spokesperson for the National Rural Electric Cooperative Association, said in a statement that the NERC analysis should push policymakers to prioritize NEPA reviews with swift permitting to bring more generation and transmission on line — a priority that clean energy backers are pushing as the Biden administration reassesses the Trump administration's controversial changes to NEPA implementation. Bell also advocated for making energy innovation tax incentives available to co-ops and streamlining FEMA assessments and reimbursements after storms. OIL IS HIRING: A rebound in oil prices spells steady job growth in the oil and gas industry, with employment in the sector set to beat pre-pandemic levels by 2027, according to a Rystad analysis released Wednesday. Oil and gas jobs had declined in 2020 with the evaporation of demand, shedding 20 percent of the sector's workforce through the pandemic. But almost half of those jobs have already been recovered, according to the analysis. Rystad based its projections on assumptions the price of U.S. benchmark WTI averages $106 per barrel this year, $70 in 2023 and $50 toward 2025. "Fueled by a rapid rise in oil prices amid a better-than-expected demand recovery and the supply constraints brought on by Russia's invasion of Ukraine, the U.S. labor market seems poised to benefit and continue on a growth trajectory," wrote Rystand analyst Sumit Yadav.
| | | | DON'T MISS DIGITAL FUTURE DAILY - OUR TECHNOLOGY NEWSLETTER, RE-IMAGINED: Technology is always evolving, and our new tech-obsessed newsletter is too! Digital Future Daily unlocks the most important stories determining the future of technology, from Washington to Silicon Valley and innovation power centers around the world. Readers get an in-depth look at how the next wave of tech will reshape civic and political life, including activism, fundraising, lobbying and legislating. Go inside the minds of the biggest tech players, policymakers and regulators to learn how their decisions affect our lives. Don't miss out, subscribe today. | | | | | | | | — "5 things to know about the EU's plan to scrap Russian energy," via POLITICO. — "Democrats revive asbestos ban bill," via POLITICO's E&E News. — " Consumers makes deal to buy energy from solar farm planned in Flushing, Montrose townships," via Michigan Live. — "U.S. crude stockpiles slide as refining ramps up ahead of summer," via Reuters.
| | | 9:30 a.m. — Senate Armed Services Committee hearing on the Energy Department and National Nuclear Security Administration on atomic energy defense activities in review of the Defense Authorization Request for FY2023 and the Future Years Defense Program. 10 a.m. — Senate Energy and Natural Resources Committee hearing on "The President's FY2023 Budget Request for the Department of the Interior." 1 p.m. — United States Energy Association forum on "water policies, drought, other non-energy uses, national security and energy development." THAT'S ALL FOR ME!
| | | | A message from Chevron: Energy demand is growing. At Chevron, we believe that demand for lower carbon hydrogen fuel could more than triple by 2050. That's why we're working to grow our hydrogen production to 150,000 tonnes per year by 2030 to help make heavy-duty transport lower carbon. Because we believe the future of energy is lower carbon. And it's only human to reach for it. | | | | | | | Follow us on Twitter | | | | Follow us | | | | |
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