| | | | |  | | By Matthew Choi | Presented by Chevron | 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.
| | | — Sen. Joe Manchin seems looking to work out a climate and energy deal in the coming months, and those closest to him offer clues to what that could look like. — Oil and gas executives are set to appear before a House Energy and Commerce subcommittee next month as Democrats seek an explanation for the rise in gasoline prices. — Russia said it will curb its offensive in northern Ukraine, but President Joe Biden and the oil markets aren't taking it at face value. HAPPY WEDNESDAY! I'm your host, Matthew Choi. I'll be at the Society of Environmental Journalists conference in Houston starting today, and my great colleague Catherine Morehouse will be taking over ME. Let me know if you want to meet in Houston! On to trivia. No one responded with the answer I was looking for: Moshoeshoe I was the first king of Lesotho. But a number of you mentioned Moshoeshoe II, who was the first king of independent Lesotho. Congrats to Cheniere's Khary Cauthen for getting it first! For today, how much did Squidward pay for the pie-shaped bomb in the "Spongebob" episode "Dying for Pie"? 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: Why Biden can't get a climate-focused bank regulator confirmed.
| | | | | | | A message from Chevron: The Permian Basin in Texas and New Mexico is one of America's most prolific oil and natural gas resources. By the end of this year, we plan to increase Chevron's Permian oil and natural gas production by 10% while continuing to reduce our operations' carbon and methane emissions intensities. | | | | | | WHO HAS MANCHIN'S EAR: Senate Energy Chair Joe Manchin appears open to renegotiating a climate and energy package from the ashes of the Build Back Better bill, and the key players in his orbit could offer some hints into what it'll look like, POLITICO's Zack Colman reports. His relationships with confidants, who include West Virginia environmentalist Angie Rosser, National Wildlife Federation head Collin O'Mara, International Energy Agency Executive Director Fatih Birol and Energy Secretary Jennifer Granholm, all reveal some of his biggest priorities in a new package: "An emphasis on conserving forests and headstreams, banking on American ingenuity to forge technological solutions, funding projects to get blue collar workers back on the factory floor and economic growth that doesn't force people to move from their homes," Zack writes. The final package could include a boost for domestic oil and gas production as well as the biggest clean energy investments in the country's history. Some of that funding could come from rolling back Republicans' 2017 tax cuts and reformed prescription drug pricing. A methane reduction package akin to the fee championed by Senate Environment and Public Works Committee Chair Tom Carper is also on the table, with Carper and Manchin discussing possible compromises, Zack reports. Manchin indicated he is hoping to hammer out a package during the April-May Senate work period. The White House also signaled its support for a package by leaving a deficit-neutral reserve fund in its budget request Monday. But despite the hints, signs point to a closely guarded process. "We've seen how having it play out publicly didn't get the job done," said Tiernan Sittenfeld, senior vice president of government affairs with the League of Conservation Voters. Zack dives into how each relationship either reflects or shapes Manchin's thinking, from mutual respect for the hardships average West Virginians face amid the decline of one of their principal industries to shared experiences leading states during a major industrial transition.
| | | | 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. | | | | | | | | CANCELED AND CONFIRMED: The c-suite of some of the nation's biggest oil and gas firms will be going before the House Energy and Commerce Oversight and Investigations Subcommittee on April 6, where Democrats will grill executives on the country's high gasoline prices. The executives include Chevron CEO and Chair Michael Wirth; Exxon Mobil President and CEO Darren Woods; Shell USA President Gretchen Watkins; BP America's Chairman and President Dave Lawler; Devon Energy President and CEO Richard Muncrief; and Pioneer Natural Resources CEO Scott Sheffield, Oversight Subcommittee Chair Diana DeGette announced. Following record-setting average gasoline prices in the wake of Russia's invasion of Ukraine, Democrats across committees in both chambers called on oil companies to explain why prices are rising for consumers while they bring in high profits for shareholders. The House Natural Resources Committee had scheduled its own hearing for April 5, but Democrats on the committee canceled after the invited witnesses declined to testify. The invited guest list to that hearing included executives from EOG Resources and Occidental Petroleum. Devon Energy was also invited to testify, but opted to attend the E&C subcommittee hearing instead, a spokesperson told ME. Natural Resources Chair Raul Grijalva issued a snide statement, saying he "invited these companies to come before the Committee and make their case, but apparently they don't think it's worth defending. Their silence tells us all we need to know—that cries for more drilling and looser regulations are nothing more than another age-old attempt to line their own pockets." Senate Democrats are also lining up to grill the industry, with the Senate Commerce Committee inviting executives from ExxonMobil, Pioneer Natural Resources and BP America to testify at a hearing "in the coming weeks." Read more from POLITICO's Ben Lefebvre and Josh Siegel. RED AND BLUE ENERGY PLANS: Senate Democratic climate hawks led by Sen. Ed Markey unveiled a three-step plan to reach U.S. energy independence through a massive buildout of renewable energy, a permanent ban on Russian oil imports and a massive release from the Strategic Petroleum Reserve to alleviate consumer prices at the pump. The plan is framed as a 500-day path to energy independence and features bills already introduced by climate-conscious Democrats. Markey unveiled the approach following a Senate Climate Change Task Force meeting Tuesday, along with Sens. Tom Carper, Martin Heinrich, Tina Smith and Jeff Merkley. The GOP has its own strategy for overhauling the country's energy landscape in response to Russia's aggression. Republican Sen. Bill Cassidy introduced his own four-pronged proposal for energy independence earlier this month via a Covid vaccine-esque Operation Warp Speed to build out domestic energy production, including LNG and nuclear; greater investment in domestic supply chains via fuel stockpiles and nature-proof infrastructure; financing overseas projects in developing countries to weaken Russia and China's reach; and greater coordination with allies to wean them off of Russian energy.
| | | RUSSIA WATCH RESULTS IN MARKET WAVES: Russia announced it would scale down its military operations around Kyiv on Tuesday, but both Biden and the oil markets responded with some skepticism. Following negotiations between Russian and Ukrainian delegates in Istanbul, Russian Deputy Defense Minister Alexander Fomin said Tuesday that his country decided "to fundamentally cut back military activity in the direction of Kyiv and Chernihiv." But Biden told reporters Tuesday he was wary of Moscow's intentions, saying "We'll see. I don't read anything into it until I see what their actions are," POLITICO's Quint Forgey reports. Oil markets also had a noncommittal response, with WTI futures dropping from Monday's settlement price $105.96 to below $100 a barrel Tuesday morning before slowly climbing back up to $104.24. Crude prices had also dipped this week after China announced a lockdown in Shanghai, its biggest city and economic capital, over a new Covid wave.
| | | | A message from Chevron:   | | | | | | DRIVE MY CAR: The Biden administration later this week is expected to finalize stronger fuel economy standards for model year 2024 to 2026 vehicles, another piece of President Joe Biden's ambitious plan to boost electric vehicle sales. April 1 is the statutory deadline for NHTSA to impose a stringency increase on model year 2024 vehicles, which will hit lots in fall 2023. EPA doesn't have that deadline, which is why its companion rule, which came out in December, covers model year 2023 as well. The NHTSA rule is expected to roughly harmonize with EPA's rule, which called for carbon dioxide limits equivalent to about 40 miles per gallon (in real-world conditions) in model year 2026 vehicles. TAKING A LEAP: The Energy Department announced the first 22 communities to take part in its Communities LEAP initiative, designed to help them build out their local clean energy and environmental programs. The communities are located across the contiguous U.S. and will work with DOE and its partners to formulate clean energy economic development plans, focusing on energy efficient buildings, low-emissions transport, carbon capture and storage, critical minerals, energy storage, and other clean energy priorities supported by the administration. The initiative also takes into account the principles of the administration's Justice40 initiative, and the administration will partner with environmental justice groups in its work.
| | | WHAT'S THE GAS TAX YIELD? Nearly half of U.S. states are implementing or considering some kind of gas tax relief for consumers as retail gasoline prices hover above $4 a gallon. But a recent study finds that only a small portion of the benefits actually trickles down to everyday drivers. The American Road and Transportation Builders Association study showed that "on average, just 18 percent of an increase, or decrease, in state gasoline tax rates is passed through to motorists in the retail price of gasoline in the two weeks after a change takes effect." Gas taxes are largely used to finance road infrastructure projects, and ARTBA Chief Economist Alison Premo Black said gas tax holidays may be "well-intentioned" but are "ineffectual" and could "compromise revenues for transportation improvements in the long-term." POLITICO's Tanya Snyder has more on the study here. A WATERSHED CLIMATE DEAL: The Maryland House of Delegates voted Tuesday to advance a major piece of climate legislation that would reduce the state's greenhouse gasses by 60 percent by 2031 and achieve net-zero greenhouse gas emissions by 2045, reports WBALTV. It includes provisions gauging the state's grid capacity, procuring more electric vehicles by the state government and investing in environmental justice communities. The bill already passed in the Senate but will face another vote in the upper chamber after the House made several amendments, including nixing a mandate on zero-emission school buildings. Republican Gov. Larry Hogan lambasted the legislation as a "reckless and controversial energy tax bill" and is expected to veto the package. But the legislation passed both chambers with overwhelming majorities that can override his veto.
| | | | 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. | | | | | | | | — "What I Heard From Passengers on the Last Train Out of Russia," via POLITICO Magazine. — "Gov. Greg Abbott touts renewable energy in speech to U.S. business leaders ," via The Houston Chronicle. — "Poland to ban Russian coal imports," via POLITICO. THAT'S ALL FOR ME!
| | | | A message from Chevron: Balancing energy security, costs, and the need to reduce emissions have become an increasingly important part of the energy conversation at home and abroad. In the Permian Basin, we plan to increase oil production by 10% in 2022 while continuing to reduce both carbon and methane emissions intensities. And in the years to come, we expect to grow our Permian production beyond 1 million barrels of oil equivalent per day. Every day, we look for opportunities to make our own environmental footprint smaller as we strive to produce energy that Americans—and customers throughout the world—can count on. Find out more. | | | | | | | Follow us on Twitter | | | | Follow us | | | | |
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