| | | | |  | | By Matthew Choi | With help from Catherine Morehouse. Programming announcement: Starting June 27, Morning Energy will be exclusively available to POLITICO Pro subscribers. Subscription benefits include access to the must-read daily Morning Energy newsletter and POLITICO Pro's exclusive suite of nonpartisan news, real-time intelligence, in-depth analysis, bill tracking and research tools. Please visit our website to continue receiving Morning Energy and to learn more about a POLITICO Pro subscription . Additionally, on June 27 POLITICO will launch Power Switch, a new energy- and climate-focused consumer newsletter. This will be a high-level newsletter focused on the larger conversation around the politics and policy of the energy transition.
| | | — President Joe Biden is laying out his inflation fighting plan, but there's not much he can do to immediately relieve the summer's record breaking gasoline prices. — OPEC+ could let Russia sit out of the next output increase agreement owing to its decreased production, according to an WSJ report. — The Senate Agriculture's conservation subpanel scheduled its first hearing in almost a decade for next week. WELCOME TO WEDNESDAY! I'm your host, Matthew Choi. EPRI's Rachel Gantz gets the trivia for knowing Spain got rid of mandatory military service in 2001. For today: Which of the three Scandinavian kingdoms does not have an Australian embassy building? 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: Blackouts on the path to a clean energy transition?
| | | | | 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. | | | | | | | | ANOTHER DAY, ANOTHER GAS PRICE RECORD: President Joe Biden took to the pages of The Wall Street Journal Opinion section (!) to outline his plan for addressing runaway prices, largely driven by high energy costs. He highlighted the role of oil and gas prices in addressing inflation, pinning the high cost of fuels on the loss of Russian oil and diminishing refining capacity, and he pushed for Congress to pass tax credits to develop more homegrown clean energy. Fed Chair Jerome Powell joined Biden at the White House on Tuesday, where the president stressed that he had confidence in the Federal Reserve to do its job and keep inflation manageable. But the proposals Biden raises to bring down consumer costs — fixing supply chains, oil releases from the Strategic Petroleum Reserve, reducing the cost of prescription drugs — will take time, and the president acknowledged he "will keep acting to lower costs where I can—but now Congress needs to act too." Meanwhile, the pain at the pump is afflicting consumers now, and it's likely to get worse. Yet again, national average gasoline prices reached a new record, hitting $4.622 a gallon on Tuesday to break the record set just the day before. It's unlikely to go down soon: We're comfortably in white pants season, meaning the peak demand season has begun. Meanwhile, Europe's new blockade plans for Russian crude means less oil supply on the market and higher prices. U.S. benchmark WTI crude futures nearly hit $120 per barrel on Tuesday at the news of the Russian sanctions framework, approaching the 14-year high hit in early March. Even if lawmakers at either the state or federal level were to intervene and offer direct financial assistance for consumers as several state lawmakers and House Democrats have proposed, it could actually tighten the market by incentivizing more consumption. Remember Nixon's price controls on gasoline and the long lines at gas stations? ME's millennial memory does not, but I hear it was unpleasant. Speaking of the 70s, the current energy crisis is worse, International Energy Agency Executive Director Fatih Birol told Der Spiegel. "We are in wartime, in an energy crisis, and we better prepare for even more difficult times," he said, warning that the summer driving season could bring shortages of diesel and gasoline, especially in Europe. For a play-by-play of the options the White House has considered to bring down gasoline prices, POLITICO's Adam Cancryn has you covered.
| | | | 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. | | | | | | | | RUSSIAN OPT OUT: OPEC+ will discuss its next output increase during its Thursday meeting, and Russia may get an opt out of the plan, The Wall Street Journal reports. With Western sanctions curtailing the country's production, some cartel members in the Persian Gulf are eyeing their own increases to make up for Russia's shortfalls. Leaving Russia out of the next output deal could mean more production from Saudi Arabia and the United Arab Emirates — which the Biden administration has fruitlessly pursued for months to lower global prices. The Gulf monarchies have so far been skittish about antagonizing Moscow by veering off course from its agreements with Russia. Read more from the Journal.
| | | WATER YOU DOING NEXT WEEK? The Senate Agriculture Conservation, Climate, Forestry and Natural Resources subcommittee is having its first hearing since 2013 next Tuesday. The meeting, led by subcommittee Chair Michael Bennet (D-Colo.) and ranking member Roger Marshall (R-Kan.), will focus on drought and forest and farmland restoration in the Western states. The hearing comes as senators on both sides of the aisle offer up a raft of water security legislation, which the Senate Energy Water and Power Subcommittee took up in a legislative hearing last week . Though specific legislation isn't listed in the announcement for next week's Ag hearing, water security is increasingly becoming a top-of-mind, bipartisan agenda item for lawmakers both in securing grid reliability and Western agriculture. NORD STREAM NOT DONE: The Nord Stream hullabaloo is far from over, with Sen. Ted Cruz (R-Texas) joining Ukrainian gas giant Naftogaz's calls for the European Commission to revoke permits for the existing Nord Stream 1 pipeline. "Nord Stream 1 allows Russia to continue raising funds for its war on Ukraine and holding Europe hostage to energy blackmail," he tweeted Tuesday. "The U.S. must support Ukraine's call to suspend it." Cruz was one of the most vocal opponents of the Nord Stream 2 pipeline on the Hill, and the pressure from U.S. lawmakers played a critical role in preventing the Russian pipeline bringing natural gas into Germany. But killing the prequel Nord Stream would be a far harder sell. Even with decreased gas flows from Russia into the European Union, Germany has made it clear cutting off Russian gas imports was off the table, and requests for Russian gas flows through the pipeline were at 65,146,776 kilowatt hours per hour (kWh/h) Tuesday.
| | | WATER SECURITY HERE AND ABROAD: Vice President Kamala Harris will announce a White House Action Plan on Global Water Security today, making the issue a national security priority. Water scarcity due to climate change could cause major political instability and regime change, the White House said in its announcement, and the action plan would prioritize U.S. leadership in water security, promote environmentally sustainable water development and encourage collaboration with global partners. The plan builds on other Democratic initiatives promoting water security in the U.S., including various provisions in the bipartisan infrastructure package tackling lead pipe removal and drought resilience. ME FIRST: WILLOW WOES: The League of Conservation Voters is out with a new $75,000 ad buy in Washington DC calling for the Biden administration to reject the ConocoPhillips Willow Project, which is currently pending before the Interior Department. The advocacy group has been submitting comments urging the department not to grant approvals for the project. "The Willow Project would lock us into decades more of dirty, dangerous, and costly fossil fuels at a time when the transition to clean energy could not be more important for our communities and our economy," LCV Conservation Program Director Alex Taurel said in a statement. A federal court voided permits for the project last summer, citing concerns with the Trump administration's environmental review. KERRY IN SWEDEN: U.S. climate envoy John Kerry is off to the magical kingdom of ABBA and surströmming today for Stockholm+50 to commemorate the 50th anniversary of the UN Conference on the Human Environment. Kerry and Monica Medina, assistant secretary of State for Oceans and International Environmental and Scientific Affairs, will partake in discussions on advancing environmental protection and nature conservation. FOIA FEST: Friends of the Earth sued the State Department over its public records request related to energy adviser Amos Hochstein. As West Wing Playbook reported last month, environmentalists are ansty with Hochstein's past work in the liquefied natural gas industry. FOE submitted a Freedom of Information Act request last month for Hochstein's emails concerning the U.S.-EU energy task force created to try to deliver 15 billion cubic meters of LNG to Europe and his correspondence with State Department ethics officials. The environmentalist group sued the department to expedite its FOIA request. "This is not the climate leadership President Biden promised," said Lukas Ross, program manager at Friends of the Earth, in a news release. "A former LNG executive in charge of increasing LNG exports is like something out of the Trump administration. This is a blatant conflict of interest and it won't stand." Read the complaint here. MISSOURI REGULATORS BACK SPIRE: The owner of a Missouri-based pipeline at the center of a FERC legal saga filed a report with the commission Monday from its state regulator which largely endorsed the company's decision to build its gas line. Staff of the Missouri Public Service Commission on Friday released its report — the product of an 18 month investigation into pipeline company Spire's decision to build a pipeline and use its own affiliate as a buyer — finding the pipeline was largely a prudent investment and ratepayers were shielded from any cost overruns the project may have incurred. However, staff also wrote that its decision to move forward with the project even as it was being challenged in court was "questionable." Spire argued the report is further evidence that the pipeline is needed and "was not the result of inappropriate dealing between affiliates." The pipeline's permit to operate was vacated by a federal court last year, which found FERC did not adequately look into whether the pipeline was needed beyond the company's contracts between its subsidiaries.
| | | PERMIAN GROWTH: While Republicans on the Hill accuse the Biden administration of stunting domestic oil and gas development, production in the Permian basin in West Texas and New Mexico is expected to rapidly grow over the next two years, contributing to overall U.S. output growth, according to a Rystad analysis. The firm predicts total growth in key shale plays to be more than 1 million barrels per day — the highest since before the pandemic — with the Permian Basin contributing about 950,000 bpd of that growth, outpacing production in Iraq. Next year, the Permian is slated to make up about half of all U.S. oil production. Read the analysis here.
| | | — Maureen "Mo" Raymo is joining C2ES' board of directors. She is the co-founding dean of the Columbia Climate School and the director of Columbia University's Lamont-Doherty Earth Observatory.
| | | — "How a Florida Power Project Flew Under the Regulatory Radar," via The New York Times. — "Miracle Fuel Hydrogen Can Actually Make Climate Change Worse," via Bloomberg. — " In reversal, EPA deems Pruitt's phone booth 'a violation'," via E&E News. — "EDF Rules Out Keeping Nuclear Plant Open Despite Energy Crisis," via Bloomberg. — "Health agency starts environmental justice initiative," via POLITICO. THAT'S ALL FOR ME!
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