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INDUSTRY PUSHES BACK: The oil and gas industry is bobbing and weaving as the Biden administration and congressional Democrats punch at domestic producers over high energy prices.
President Joe Biden has found himself in the position of trying to address voter worries over rising prices — particularly gas prices — while pursuing the goal of reducing fossil fuel use over time.
That has led to his blaming oil and gas companies for the current outlook, in the form of a request that the Federal Trade Commission investigate companies for anti-competitive conduct, rather than his asking them to expand production.
Producers are also being targeted by Democratic lawmakers, some of whom have called on Biden to impose a ban on fuel commodity exports. Sen. Elizabeth Warren of Massachusetts, (who has proposed a complete ban on fracking), is one of said lawmakers and has gone a step further, accusing 11 energy companies of “corporate greed” in a recent spate of letters to the firms’ executives.
Companies say they’re being scapegoated: ExxonMobil CEO Darren Woods dismissed the accusations from Biden and Warren in an interview this morning, implicating market dynamics.
“This is a commodity market. The prices are set by the amount of supply that’s out there, and by the amount of demand,” said Woods.
The heads of Marcellus Shale Coalition, the Gas & Oil Association of West Virginia, and the Ohio Oil & Gas Association, whose members operate in the Appalachian region, wrote Warren yesterday over her letters, calling her claims part of a “deeply misguided, headline-grabbing ploy” and boasting the industry’s role in shaping the energy-cheapening shale revolution.
The industry is made up of “price takers, not price makers,” Mike Chadsey, director of public relations for the Ohio Oil & Gas Association, told Jeremy. “Other people tell us what our commodity was worth.”
Charlie Burd, executive director of the Gas & Oil Association of West Virginia, called the claim that companies are profiting off exports at someone else’s expense “unfair” and said that global supply chains and U.S. allies are strengthened by exported gas.
He also noted that natural gas prices hit an all-time low during the pandemic, calling it “supply and demand 101” that prices would increase with the demand during the pandemic recovery.
“You can't look at prices over just a very short period of time,” Burd said. “We have to understand that the bigger picture is all commodities shift in price.”
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RENEWABLES SET TO DOMINATE CAPACITY GROWTH: Global renewable electricity capacity will grow more than 60% over the next five years to over 4,800 GW — as much as the current total capacity of fossil fuels and nuclear combined, according to a new forecast from the International Energy Agency this morning.
Nearly all of the power capacity added in that time frame will be renewable, with solar accounting for more than half.
“This year’s record renewable electricity additions of 290 gigawatts are yet another sign that a new global energy economy is emerging,” said IEA Executive Director Fatih Birol.
The IEA said the growth in renewable energy was driven by government policies. Still, the forecast is far short of what it says would be needed to meet net zero emissions by mid-century
EXXON STICKS WITH CONSERVATIVE CAPITAL EXPENDITURE PLAN: Exxon said this morning it has finalized plans to stick to $20-$25 billion in capital expenditures a year through 2027, a significant decrease from before the pandemic. The plan reflects discipline in light of great uncertainty about the outlook for oil and gas during the pandemic and the possibility of further government actions to curb emissions from fossil fuel use. The company said it also was committing $15 billion for “lower-emission investments.”
Earlier this year, the activist hedge fund Engine No. 1 led a successful shareholder revolt against Exxon. It has agitated Exxon to invest in clean energy and begin moving off fossil fuels for financial reasons.
SENATE ENR REPUBLICANS PROPOSE SPR RESTRICTIONS: Republicans on the Senate Energy and Natural Resources Committee introduced legislation yesterday that would prevent the energy secretary from releasing Strategic Petroleum Reserve crude oil, expect for in the case of a significant supply disruption, until the Interior Department establishes a plan to boost production on federal lands.
The proposal comes amid weeks worth of arguments by Republicans and oil and gas industry groups blaming the Biden administration’s energy policies for the surge in prices, and it follows comments Amos Hochstein, the State Department’s senior energy security adviser, made earlier this week expressing that the administration is prepared to open the reserves again to ease prices if necessary.
OVERSIGHT GOP CALLS FOR ENERGY HEARING: House Oversight Republicans are calling on the committee’s Democratic leadership to end its investigation into oil and gas companies and to call a hearing to determine how Congress can reduce energy prices instead.
Members wrote Chairwoman Carolyn Maloney yesterday, accusing Democrats of abusing their authority in issuing subpoenas following the committee’s October hearing featuring major oil firms and industry groups.
The signatories, led by Ranking Member James Comer, said the committee should “use its oversight authority to examine how we can work with industry to increase domestic production of our natural resources” to reduce prices for consumers during the holidays.
LARGEST PRIVATE INVESTMENT FOR FUSION YET: Commonwealth Fusion Systems said it has raised more than $1.8 billion, which is the largest private investment for nuclear fusion yet, according to the Wall Street Journal.
“Everything is science fiction until someone does it and then all of a sudden it goes from impossible to inevitable,” said Bob Mumgaard, the company’s chief executive.
The Massachusetts company has backing from big-name investors like George Soros and Bill Gates.
Remember, the Washington-based nuclear fusion startup Helion added $500 million in funding in November, with backing from the investor Peter Thiel and others.
FLOATING NUCLEAR PLANT FUELS RUSSIAN DREAMS OF NORTHERN SEA ROUTE: Russia is hoping that power from the Akademik Lomonosov — the world’s first floating nuclear power plant, moored off the Arctic town of Pevek — can provide power to keep the harbor ice-free facilitate passage via the Northern Sea Route, per the Financial Times.
Jeremy wrote last month about how Russia is hoping that warming temperatures will make the passage possible, speeding the delivery of natural gas to Asia.
GREECE CLIMATE LAW INCOMING: The Greek government is set to introduce its first climate law, which will put the country on track to begin cutting its coal reliance over the next six years in support of a 2050 net-zero target, the Financial Times reports.
The law will also require that new taxis and a third of new rental cars in Athens and Thessaloniki be either hybrid or fully electric by 2025 as the country also looks to cut its emissions 55% by 2030.
Wall Street Journal High gas and coal prices keep renewable-energy rollout on track
E&E News Climate bill rekindles debate over biodiesel tax breaks
Sacramento Bee Sierra Nevada snowpack could largely vanish by 2040s as climate warms, scientists say
THURSDAY | DEC. 2
10 a.m. 366 Dirksen The Senate Energy and Natural Resources Committee will hold a hearing to consider pending legislation.