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HOW IT’S GOING: President Joe Biden’s promise to end new drilling for oil and gas on federal lands is colliding with the cold realities of soaring fuel costs.
Some centrist Democrats, several of whom are up for reelection this year, are requesting that Biden do more via the leasing program to bring price relief — and their ask is not where his preferences lie.
These Democrats are asking Biden to speed up development of the five-year offshore oil and gas leasing plan “as required” by federal law to bring more oil and gas to market to help displace Russia’s market share and lower prices.
“The United States can and should be doing more to meet the global energy demand, provide much-needed relief for U.S. consumers and businesses suffering from inflationary prices, and diminish Russia’s largest source of revenue,” Democratic Reps. Henry Cuellar, Sylvia Garcia, Vicente Gonzalez, and Lizzie Fletcher, all of Texas, wrote to Biden last week.
The four appealed to Biden’s political sensibilities, too, and said more production can help “to ensure the United States does not find itself confronting future energy crises at home.”
In the Senate, four of Biden’s fellow Democrats, including Arizona’s Mark Kelly, voted in favor of a motion last week designed to facilitate quicker development of the now-delayed offshore leasing program.
The Biden administration favors neither the onshore nor offshore leasing programs, as Biden himself campaigned on ending drilling on public lands and waters.
Although the administration has moved forward with one lease sale in the last five months, and scheduled several more, officials have consistently pointed a finger at U.S. District Judge Terry Doughty to justify itself and, notably, not at the high and rising price of gasoline.
Press Secretary Jen Psaki emphasized during a press briefing last month that the administration is selling oil and gas leases against its political will and that the onshore lease sales scheduled for next month are “not in line with the president's policy.”
At least in public, officials are not giving many signals that they plan to walk back Biden’s ambitions on leasing.
Interior Secretary Deb Haaland testified in April that she feels the oil and gas industry is “set” on leasing and permitting, and national climate adviser Gina McCarthy declared the White House is “not backing down” from its agenda on reducing greenhouse gas emissions, to which oil and gas leasing restrictions are integral.
The unrelentingly high prices leave Biden in a challenging position of choosing between: holding fast to his promises on leasing, and thereby keeping environmentalists and others Democrats favoring a “keep it in the ground approach” happy, or letting up and doing what he can to enable more production at the bidding of these few Democrats, the oil and gas industry, and virtually every Republican in Washington.
The latest from the Interior Department is that it is “actively developing” the five-year plan, and that oil and gas companies should make use of what they already have.
Welcome to Daily on Energy, written by Washington Examiner Energy and Environment Writers Jeremy Beaman (@jeremywbeaman) and Breanne Deppisch (@breanne_dep). Email jbeaman@washingtonexaminer.com or bdeppisch@washingtonexaminer.com 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.
HUNGARY CONTINUES TO FOIL EU OIL EMBARGO: The European Union’s sixth sanctions package stalled over the weekend after Hungary again held up a deal announced last week by European Commission President Ursula von der Leyen that would have phased out all Russian oil imports by the end of 2022. Hungary and Slovakia had originally objected to the plan citing their deep dependency on Russian crude.
European Commission leaders will now meet in Brussels to draft a new proposal before sending it to members of the bloc for approval.
That opposition prompted EU officials to propose an updated version of its oil embargo late last week, which would have given Hungary, Slovakia, and the Czech Republic more time to impose the oil embargo. According to a draft copy of the updated proposal, Hungary and Slovakia would have been given until the end of 2024 to comply with the embargo—an additional 12 months compared to the original embargo—while the Czech Republic would be given an additional six months.
"There is no compromise among member states," an EU diplomat said of the new effort. "Hungary is still opposing [the package], and this is the problem."
G7 PLEDGES RUSSIAN ENERGY PHASE-OUT: The Group of Seven commemorated VE day yesterday with both a nod to the former Soviet Union for participating in the defeat of Nazism and a swift rebuke of Putin for leading the invasion of Ukraine.
A statement put out by the G7 promised also to phase out its use of Russian energy, especially through the EU’s top order of energy business: ceasing import of oil products.
The nations said they “will ensure that we do so in a timely and orderly fashion, and in ways that provide time for the world to secure alternative supplies” and that they’ll keep up the sanctions pressure on Russia which has “already severely impaired Russia’s ability to finance its war of aggression.”
GAS PRICES RISE TO NEAR-RECORD HIGHS: Gas prices in the U.S. are soaring again, with the national average climbing Monday to $4.328 a gallon, according to AAA—just three-tenths of a cent lower than the record-high gas prices seen in March. The prices also represent a 13-cent increase from last week.
The recent uptick in fuel costs comes despite the Biden administration’s effort to lower prices at the pump—which included the president’s decision in late March to release 180 million barrels of oil from the U.S. Strategic Petroleum Reserve, the largest-ever single release from the reserves since their creation in 1974.
BIDEN SPR RELEASE MIFFED IEA MEMBERS: REPORT: The Biden administration’s decision to sell approximately 180 million barrels of SPR crude oil to tame prices “embarrassed” fellow members of the International Energy Agency, which generally takes the lead on coordinated stockpile releases, Reuters reported this morning.
Unnamed sources said the administration did not consult the IEA about the plan before announcing it.
Reuters also reported that other IEA countries worried Biden’s SPR plan, which the White House announced on March 31 and provided for releasing an average 1 million barrels per day for the next six months, was developed “for political reasons” over the interest of “protecting consumer countries from a global supply disruption.”
IEA had already arranged a separate 60 million barrel release from reserves, 30 million of which were marked to come from the U.S., before Biden’s unilateral plan was announced. It then announced a separate 60 million barrel release in the days after Biden announced his record 180 million barrel plan.
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CAPITO VERSUS BIDEN NEPA OVERHAUL: The Biden administration’s restoration of NEPA regulations are making the president’s own energy reform goals “impossible,” Sen. Shelley Moore Capito wrote in a Washington Examiner op-ed, adding that Biden’s recent actions, “such as releasing 25% of our strategic petroleum reserves, invoking the Defense Production Act for domestic critical minerals supply, and reopening a small fraction of federal land for drilling, do not address the root cause of his domestic energy crisis: permitting.”
Capito, a West Virginia Republican and ranking member of the Senate Environment and Public Works Committee, also noted that Biden’s agenda will require a massive scale-up of critical minerals mining in the U.S. “Instead of making permitting faster, the Biden administration is making it harder,” Capito wrote. She noted that the White House’s Council on Environmental Quality found it took an average of 4.5 years to complete an environmental impact statement under NEPA.
As RJ Scaringe, the CEO of EV builder Rivian, told the Wall Street Journal recently: “90% to 95% of the [battery cell] supply chain does not exist.”
Scaringe also said that the shortage of semiconductors, which has been implicated as a leading factor driving car prices higher, is “a small appetizer to what we are about to feel on battery cells over the next two decades.”
REFINERY TRADE GROUP GOES LIVE WITH ANTI-RFS AD: Opponents of the Renewable Fuel Standard began airing an ad campaign this past weekend lobbying Biden to reform the program in order to lower fuel prices.
The ad, which was developed by labor union and independent oil refinery interest group Fueling American Jobs Coalition, premiered yesterday during Meet the Press and will run for the next month in Philadelphia, D.C., and several other media markets. It claims Biden could reduce gas prices by up to 30 cents per gallon “with just the stroke of a pen” if he were to order reforms to the RFS.
Refiners and the ethanol lobby have been competing for Biden’s attention on the RFS, and ethanol broadly, in the face of high gas prices, as we detailed on Friday.
Unions representing laborers who service refineries are chiming in, too, in favor of reform to the RFS and its Renewable Identification Number credit system.
Bill Adams, president and business agent of the eastern Pennsylvania-based International Brotherhood of Electrical Workers, Local 654, said the RFS and its “RINs tax” are threatening his members’ jobs because the refineries where they work are are having to spend more of their budgets to comply with the RFS and less on the capital projects which put them to work.
“When they're taking their budget, the budget for that refinery, and they're eating into the capital budget to pay for increased costs for RINs and the RFS, it's hurting them in the long run. It’s cutting the capital work,” Adams told Jeremy.
EPA has yet to finalize its rule setting blending volume obligations for 2020-2022 but promised to do so no later than June 3 after entering into a consent agreement last month with renewable fuel industry group Growth Energy.
The Rundown
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E&E News How the Colonial pipeline hack galvanized a nation at risk
Washington Examiner Proponents of bill to allow US to sue OPEC hope third time's the charm
Calendar
WEDNESDAY | MAY 11
10 a.m. 406 Dirksen The Senate Environment and Public Works Committee will hold a hearing on oversight of the Council on Environmental Quality.
10:30 a.m. 2123 Rayburn The House Energy and Commerce Committee will hold a hybrid hearing titled, “Modernizing Hydropower: Licensing and Reforms for a Clean Energy Future.”