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SAUDIS TEAM UP WITH RUSSIANS TO COMPETE WITH US NATURAL GAS: Saudi Energy Minister Khalid Al-Falih on Monday played up a joint effort with Russia to develop the Arctic’s natural gas resources, making it a potential rival with the U.S. in exporting natural gas to Asia and elsewhere.

Saudis in the Arctic: “We have looked at projects in Africa and the Mediterranean, and of course the Arctic with some Russian companies, Novatek,” said Falih, speaking at the 2nd annual CERAWeek in India.

“The idea is that Saudi Aramco will trade that [liquified natural gas] globally, and hopefully bring some of it here to India and other markets,” he said. Any Russia-Saudi joint effort to produce LNG for the growing market in Asia would compete directly with U.S. natural gas exports and President Trump’s “energy dominance” agenda, which hinges on those exports.

Saudi Arabia “has a mandate to go global” when it comes to natural gas development and export, Falih said.

A strategic shift toward Russia: Although the Novatek deal was announced earlier in the year, it could have significance for the direction of U.S.-Saudi relations in light of the dust-up over murdered journalist Jamal Khashoggi.

The head of Saudi Arabia’s state-run media outlet Al Arabiya said Sunday that U.S. sanctions against the kingdom in response to the Khashoggi crisis could lead to Russia and China becoming the primary arms suppliers to the kingdom, as well as creating a base there.

“No one can deny that repercussions of these sanctions will include a Russian military base in Tabuk, northwest of Saudi Arabia, in the heated four corners of Syria, Israel, Lebanon and Iraq,” Turki Aldakhil, general manager of Al Arabiya, wrote in an op-ed Sunday.

U.S.-Saudi nuclear deal in question: There is also the risk that the U.S. will lose its bid to help Saudi Arabia develop its nuclear energy capacity, said Aldakhil, and that Saudi Arabia would instead team up with Russia.

The Trump administration has made winning the deal with Saudi Arabia a key part of its energy agenda abroad.

Trump says Saudi king denies murder: “Just spoke to the King of Saudi Arabia who denies any knowledge of whatever may have happened ‘to our Saudi Arabian citizen,’” Trump tweeted Monday morning. “He said that they are working closely with Turkey to find answer.”

Trump suggested that “rogue killers” could be behind Khashoggi’s death.

Pompeo sent to meet with King Salman: “I am immediately sending our Secretary of State [Mike Pompeo] to meet with King!” Trump added.

Meanwhile, a conference on U.S.-Gulf relations is being held Tuesday in Washington for the first time. Khashoggi was supposed to address the conference, and incidentally is still listed on the meeting’s website as a guest speaker.

The Gulf International Forum holds its inaugural conference in Washington, bringing oil,  geopolitics, U.S. hurdles in the region front-and-center. The theme of the conference will be  "The Future of a Disrupted Gulf Region: Old Tensions, New Paradigms, and Emerging U.S. Challenges."

Welcome to Daily on Energy, compiled by Washington Examiner Energy and Environment Writers John Siciliano (@JohnDSiciliano) and Josh Siegel (@SiegelScribe). Email for tips, suggestions, calendar items and anything else. If a friend sent this to you and you’d like to sign up, click here. If signing up doesn’t work, shoot us an email and we’ll add you to our list.  

KHASHOGGI CRISIS THREATENS TRUMP’S OIL PACT WITH SAUDIS: The disappearance and possible murder of Khashoggi complicates Trump's efforts to maintain an alliance with Saudi Arabia to keep production high as oil sanctions kick in next month on Iran.

The timing couldn’t be worse for the administration and Republicans, facing a tough midterm fight the day after oil sanctions on Iran kick in Nov. 4.

“The Khashoggi affair throws a monkey wrench into these plans,” Jim Krane, energy geopolitics fellow at Rice University's Baker Institute, told Josh.

Trump’s balancing act to keep prices low: “Trump has been pressing Saudi Arabia to ramp up oil production to cover the lost Iranian supply — and keep gasoline prices reasonable — so as not to antagonize the U.S. motorist driving to the polls,” Crane added.

Even Trump donors like Dan Eberhart are getting a little jittery. Eberhart, CEO of the oil services firm Canary, sees the prospect of the U.S. taking action against the Saudis as complicating Trump’s arrangement with the Mideast oil giant.

“There is a grand bargain where Saudi keeps production inching higher as the Trump administration puts increasing pressure on Iran,” Eberhart told Josh. “The presumed killed journalist is a giant complication. Trump doesn’t want to disrupt the arms sales either.”

Congress is pressuring Trump to act: Top senators on the Foreign Relations Committee have asked Trump to impose sanctions against anyone found responsible for Khashoggi’s fate. Trump has dismissed calls for sanctions on Saudi Arabia so far, but pressure could force his hand, Eberhart said.

“The administration seems reluctant to impose sanctions so far, but the pressure from the media for action will be unrelenting,” he said.

Amy Myers Jaffe, energy geopolitics expert at Council on Foreign Relations, said there is precedent for the U.S. to apply sanctions against key oil-producing countries even if doing so goes against its energy interests.

"The U.S. Congress has in the past passed various kinds and levels of sanctions on energy exporters in certain unique situations even when when it was counter to energy concerns,” Myers Jaffe told Josh. “Saudi Arabia needs to be cognizant of that."

Why Trump could go soft on Saudis: But Krane said the Saudis have leverage over Trump with its role in making his Iranian oil sanctions policy work.

“I'm sure Trump worries that pressing the Saudis right now could backfire,” Krane said. “If the Saudis don't play ball, Republican candidates in the midterms could find themselves struggling to explain the president's role in gasoline prices.”

Read more of Josh and John’s story here.

SAUDIS REMIND TRUMP OF THEIR ‘INFLUENTIAL’ ROLE OVER GLOBAL ECONOMY: The Saudis released a statement over the weekend reminding the U.S. government of their “influential role” in the global economy, implying they would not take sanctions lightly.

"If it receives any action, it will respond with greater action, and that the Kingdom's economy has an influential and vital role in the global economy,” the Saudis said in a statement.

Al-Falih, the Saudi energy minister, was more accomodating in his speech in India on Monday, pledging the his country would do its part to keep oil markets stable.

"I want to assure markets and petroleum consumers around the world that we want to continue support the growth of the global economy, the prosperity of consumers around the world," Al-Falih said.

TRUMP DOUBTS HUMANS’ ROLE IN CLIMATE CHANGE, SAYS SCIENTISTS ARE ‘POLITICAL’: Trump on Sunday denied the scientific consensus that humans are primarily causing climate change, and accused scientists who study the issue of having a “political” agenda.

Lesley Stahl opened her “60 Minutes” interview with Trump on Sunday night by challenging the president’s contrarian views on climate change, a week after a panel of scientifics from around the world convened by the United Nations released a study that projected faster and more severe consequences of global warming than previously thought.

Asked if climate change is a hoax, Trump basically said so, without being so categorical as he has in the past.

Trump’s comments: “I think something’s happening. Something’s changing and it’ll change back again. I don't think it's a hoax, I think there's probably a difference. But I don't know that it's manmade. I will say this. I don't want to give trillions and trillions of dollars. I don't want to lose millions and millions of jobs. I don’t want to be put at a disadvantage.”

Trump’s talking points haven’t changed: Stahl asked Trump if he would reconsider his position on climate change after back-to-back devastating hurricane seasons.

“I'm not denying climate change,” Trump said. “But it could very well go back,” he added, repeating his argument that the world has warmed in cycles.

“They [people]  say that we had hurricanes that were far worse than what we just had with Michael.”

Stahl did not directly address the U.N. report with Trump, but she asked him why he disregards when scientists say the impacts of climate change are increasingly visible today -- sea level rise, more severe storms, worsening wildfires.

“You'd have to show me the scientists because they have a very big political agenda,” Trump said.

Here’s the bottom line: The interview made clear that little has changed with Trump, despite his attempt to be circuitous with his language, and that his administration will continue to downplay climate change, and impose policies rolling back or weakening regulations meant to combat it.

TRUMP’S TOP ECONOMIC ADVISER SAYS UN ‘OVERESTIMATE’ THE CLIMATE PROBLEM: Trump’s top economic adviser Larry Kudlow directly attacked the U.N. report on Sunday, and also questioned manmade climate change.

“I think they overestimate,” Kudlow said of the U.N. report on ABC’s “This Week.”

“I’m not denying any climate-change issues,” Kudlow said. “I’m just saying, do we know precisely...things like how much of it is manmade, how much of it is solar, how much of it is oceanic, how much of it is rain forest and other issues?”

TRUMP TRAVELS TO STORM-TORN FLORIDA: Trump and the first lady travel to Florida on Monday to survey the devastation after Hurricane Michael.

Trump tweeted that he and Melania will “tour the hurricane damage and visit with FEMA, First Responders and Law Enforcement.” He called Florida the “worst hit in 50 years!”

POWER RESTORED TO OVER 2 MILLION IN MICHAEL’S WAKE: Over 2 million customers have their electricity restored in the wake of Hurricane Michael, according to the utility group leading the effort with the federal government.

But that still leaves over half-a-million customers still without electricity, according to the Edison Electric Institute, the largest utility industry trade association.

Nearly 630,000 electricity customers, as of Saturday, remained without power in Alabama, Florida, Georgia, North Carolina, and Virginia, according to the group’s most recent reporting. The majority of outages continue to be in Florida, where the hurricane came ashore, and North Carolina.

The severe damage to the electric system in the Florida Panhandle requires that the energy infrastructure be rebuilt.

Well over 1 million customers were without electricity Friday evening.

MARCO RUBIO SAYS HE WON’T ‘DESTROY OUR ECONOMY’ OVER RISING SEA LEVEL THREAT: Sen. Marco Rubio, R-Fla., said Sunday he isn't going to threaten his state's economy, speaking in response to an environmental report released last week predicting that 1 million Florida homes could experience "chronic flooding" by 2100.

"No matter what we do, no matter what we do with laws, if tomorrow we stopped all -- let's say we went to all solar panels and did all that stuff, which is not realistic -- this trend would still continue," Rubio said during an interview on CNN's "State of the Union" of rising sea levels.

Rubio said his state is already doing things to soften the impact of tide changes to Florida's low-level coastal areas, including revising its management of water.

“We're all over that. We've been working on that very hard and continue to," he said. "Strategies to mitigate against those factors that are going to be in place no matter what happens with our energy policy, but I'm also not going to destroy our economy. There's a reality and balance on that end of it that we need to be focused on."

What the science says about sea level rise: The Union of Concerned Scientists last week published a report titled "Underwater: Rising Seas, Chronic Floods, and the Implications for US Coastal Real Estate." The group of researchers found that by the end of the century, 1 million homes in Florida will be at risk of catastrophic flooding from sea level rise.

Rubio's comments come as the Florida Panhandle grapples with the devastation wreaked last week by Hurricane Michael. So far the state's death toll from the storm is eight people.

JEFF FLAKE CHALLENGES REPUBLICANS TO LEAD ON CLIMATE CHANGE: Sen. Jeff Flake challenged his party on Sunday to take the lead on combating climate change in response to the U.N. report, which he described as “pretty dire.”

“I think Republicans need to be at the forefront if we want to keep our place and keep our seats," Flake, R-Ariz., said on ABC’s “This Week.”

Asked if Republicans are going the wrong direction on climate change, Flake, who is retiring, said: “I think so.”

More Republicans are vowing to combat climate change: Flake, with his comments, joins the ranks of GOP climate hawks who insist they can overcome the dismissiveness of others in the party about the U.N. report.

Indeed, as Josh reported in a story last week, some powerful Republicans, many representing states and districts already seeing the effects of climate change, accept the findings and are eager to use the report to gain support for their policies.

RYAN ZINKE MEETS WITH CAREER STAFF ON CUTTING AND RE-ORGANIZING AGENCY: Interior Secretary Ryan Zinke wants to cut and consolidate the number of bureau offices the agency has, he said Monday morning.

“Under our plan to reorganize & modernize the government, we're going from 50+ bureau-specific regions to a handful of DOI unified regions,” he tweeted as he met with the agency’s career leadership from across the country.

“We'll share services to better serve taxpayer & accomplish mission,” he explained.


Washington Post Clean up climate change? It’s just good for business

Bloomberg Saudi Arabia breaks 45-year taboo with veiled threat to use oil as a weapon

Politico How red and green slime could swing Florida’s Senate race

New York Times After winning Nobel, William Nordhaus talks about who’s getting his pollution-tax ideas right


MONDAY | October 15

All day, New Delhi. One of largest energy conference in the U.S., CERAWeek, is holding its second annual energy forum in India, October 15-16. Featured speakers will include: Saudi energy minister Khalid Al-Falih, OPEC ministers, and U.S. Energy Undersecretary Mark Menezes.

TUESDAY | October 16

8:30 a.m., 14th and F Streets NW. The Gulf International Forum holds its inaugural Gulf International Conference, with the theme "The Future of a Disrupted Gulf Region: Old Tensions, New Paradigms, and Emerging U.S. Challenges." Oil geopolitics is a major part of the all-day conference.

6:30 p.m., K&L Gates LLP, 1601 K Street NW. The Women's Council on Energy and the Environment holds a discussion on "Liquid Natural Gas (LNG) Exports: What Lies Beyond the Expected Near-Term Expansion?"

WEDNESDAY | October 17

11 a.m., Webinar. The National Academy of Sciences holds a webinar on "Progress Toward Restoring the Everglades: The Seventh Biennial Review, 2018."