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CASHING IN: New quarterly earnings reports show energy companies of all shapes and sizes are cashing in big on $100-plus per barrel oil.

Texas-based independent Diamondback Energy netted $779 million during the first quarter of the year, more than 3.5 times what the company earned during the same period in 2021 when crude oil prices ranged from about $50-64 per barrel (Diamondback’s Q1 earnings were still substantially lower than the more than $1 billion generated in the fourth quarter of 2021.)

Competitor Devon Energy reported net earnings of $1 billion for the quarter, while Coterra Energy’s net income for the quarter totaled $608 million.

Meanwhile, heavyweight BP saw its “underlying replacement cost profit” for the quarter rise to $6.2 billion, about a $2 billion increase over the last quarter, although it marked a $20.4 billion loss. CEO Bernard Looney pointed specifically to costs incurred by BP’s pullout from Russia’s Rosneft in response to the invasion of Ukraine.

Exxon and Chevron are doing pretty well, too, having announced on Friday quarterly profits of $5.5 billion and $6.26 billion respectively.

Beating the capital discipline drum: Earnings announcements from the independents all emphasized that the companies got here not by plunging free cash into new production but by being measured in their spending.

They suggested further they don’t intend to spend big on production yet, as the Biden administration calls for more production to tame prices.

Diamondback said the company is “committed to maintaining our current production levels” and emphasized volatility in the oil market is the determining factor.

“While we believe that efficiently growing our production base is achievable over the long-term, we do not feel that today is the appropriate time to begin spending dollars that would not equate to additional barrels until multiple quarters from today given the uncertainty and volatility currently in the market,” the company said.

Devon’s announcement said it is “committed to a disciplined maintenance capital program” and that it has not amended its plan to sustain production of between 570,000 to 600,000 barrels per day.

Fuel for criticism: Congressional Democrats have accused companies of gouging drivers and been especially critical of their strategies during this high-price period, which a number of executives say publicly have favored returns and paying down debts over spending on new production.

Democrats said last week they plan to go after oil companies, which Speaker Nancy Pelosi said have “exploited the marketplace,” with new legislation.

Where production is headed: Upward. Production has been up to average 11.9 million barrels per day over the previous three weeks, an increase of 200,000 bpd relative to the first week of the year, according to the Energy Information Administration.

Welcome to Daily on Energy, written by Washington Examiner Energy and Environment Writers Jeremy Beaman (@jeremywbeaman) and Breanne Deppisch (@breanne_dep). Email or 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.

BIDEN ADMINISTRATION LAUNCHES $3B BATTERY PUSH: The Department of Energy announced a new $3.1 billion grant program yesterday to help boost U.S.-based electric vehicle production, as part of the administration’s broader effort to increase domestic manufacturing, processing, and recycling of EV components.

The program is funded through the bipartisan infrastructure bill, which included $7 billion in total for improving battery supply chains in the Department of Energy. Officials said yesterday that the new grant program will support companies who are building or retooling existing lithium battery production components or battery recycling facilities.

News of the EV program also comes just weeks after President Joe Biden invoked the Defense Production Act to encourage U.S. production of minerals such as lithium, nickel, cobalt, graphite, and manganese, which are all key components used in EV battery manufacturing.

The Examiner’s Christian Datoc reports: “Dave Howell of the Department of Energy estimated that the tranche of funding could be split into as many as 30 grants, with an expected minimum investment of $50 million per project, and senior administration officials explicitly said the plan will help to meet Biden's goal of converting 50% of all cars to electric vehicles by 2030, all while ending U.S. reliance on ‘unreliable’ offshore suppliers, such as China.”

THE LATEST ON EUROPE VERSUS RUSSIAN FUEL: EU leaders are continuing to hash out details on their sixth round of sanctions against Russia, which will almost certainly include a phased-in embargo on Russian oil. Germany reiterated its support for the oil ban yesterday, but Hungary remains opposed. (Leaders are working to draft exemptions for Hungary and Slovakia, two nations who depend heavily on Russian supplies.) A vote on the new sanctions package could come as early as tomorrow, though leaders cautioned that it make take a few days to finesse before all 27 member states will be ready to approve it.

German Economic Minister Robert Habeck reiterated the country’s support for a Russian oil embargo, even as he acknowledged that the EU's broader effort to eventually phase out all Russian energy supplies will permanently drive up costs in the country.

"We have managed to reach a situation where Germany is able to bear an oil embargo," he told reporters yesterday, speaking after a meeting with industry leaders.

Still, he said, it is “inconceivable that sanctions won’t have consequences for our own economy and for prices in our countries. We as Europeans are prepared to bear [the economic strain] in order to help Ukraine,” he added. “But there’s no way this won’t come at a cost to us.”

Habeck also said that the country’s economy must “share” the burden of weaning itself off Russian energy supplies, adding that “there is no other way to get through this.”

EU PROMISES NEW GUIDANCE ON GAS-FOR-RUBLES DECREE: EU Energy Commissioner Kadri Simson discouraged European energy companies from agreeing to pay Gazprom in rubles and said doing so leads “to a clear breach of sanctions” imposed against Russia.

Simson emphasized yesterday after a meeting with national energy ministers it’s the commission’s view that Putin’s decree ordering customers to pay in rubles violates gas supply agreements, a view shared by Jonathan Stern of the Oxford Institute of Energy Studies, who is a member of the EU–Russia Gas Advisory Council and previously served as EU speaker for the council.

“If they want to interpret the ruble decree as a breach then in my view they are right, but not everybody agrees,” Stern told Jeremy. But, he said, cooperating with the decree “can be relatively easily accommodated if buyers wish to do so.”

While Poland and Bulgaria declined, resulting in last week’s shut-off announcement, some energy companies have already acceded to the gas-for-ruble demand, as Bloomberg reported last week.

The commission has already provided some guidance to member states that it is “perfectly legitimate under commercial law to reject” the ruble demand, Simson said yesterday, on the basis that it violates contracts’ currency provisions. She said the commission would provide additional guidance, which at least one major member state is requesting.

“It’s very important that the EU Commission gives a clear legal opinion if payment in rubles is a violation of sanctions,” Prime Minister Mario Draghi of Italy said yesterday.

Italian energy company Eni is reportedly preparing to open a ruble account, but company CFO Francesco Gattei was somewhat ambivalent about the matter on Friday, saying the company would comply with sanctions terms and that it “continue[s] to receive invoices in euro.”

In any case, Stern said nations with supply agreements will have to think long and hard about what’s at stake now that Russia pulled the gas lever against Poland and Bulgaria.

“For those who want to oppose the ruble Decree and risk the Russians cutting off your gas, then even if you feel you’re on strong legal ground, they need to be clear about the economic consequences which, for large importers, would be serious,” he said.

GRIM REVELATION FROM WESTERN DROUGHT: Las Vegas authorities said they suspect a body in a barrel that was recently discovered in Lake Mead may have been underwater for as long as four decades, and believe more bodies are “likely” to appear there as the ongoing drought in the West causes lake levels to recede.

Las Vegas Metro police homicide Lt. Ray Spencer told local news authorities believe the person was killed in the 1980s based on “personal items” discovered in the barrel. “It’s going to be a very difficult case,” Spencer said. “I would say there is a very good chance as the water level drops that we are going to find additional human remains.”

Drought conditions in the West have caused Lake Mead to drop to below 1,056 feet in elevation last week— well below its maximum capacity levels of roughly 1,220 feet.

INSIDE BIDEN’S EFFORTS ON ENERGY SECURITY AND CLIMATE: WSJ reporter Timothy Puko joined former FERC chairman Neil Chatterjee and energy reporter Breanne Deppisch on this week’s “Plugged in” podcast to discuss how the Biden administration’s priorities on clean energy and climate have been upended by Russia’s war in Ukraine and resulting energy crisis, which have forced Western leaders to make tough choices on boosting supply—and at times, to put clean energy priorities on pause.

Puko also dives deeper into the Democrats' eleventh-hour effort to advance bills that support decarbonization before the November midterms, and how these competing efforts have widened the gap between Democrats’ more progressive and centrist factions. Listen to the full episode here.

The Rundown

Huffington Post Gas giants have been ghostwriting letters of support from elected officials

Power Magazine Large-scale hydrogen projects take shape as technology continues to evolve

The Washington Post Millions of bees were dying on a tarmac. Local beekeepers ran to help.

Wall Street Journal Japan pushes ahead with plan to add Russian gas imports



12 p.m. Advanced Energy Economy will hold a webinar featuring FERC Chairman Richard Glick titled “Making Connections: How to Get Transmission Built for an Advanced Energy Economy.”


9:45 a.m. 406 Dirksen The Senate Environment and Public Works Committee will convene for a markup session on a water resource development bill, and to vote on the nomination of Benny R. Wagner to be inspector general of the Tennessee Valley Authority.

10 a.m. 192 Dirksen The Senate Appropriations subcommittee on energy and water development will hold a hearing on the Energy Department’s budget for FY2023.


10 a.m. Plymouth, Mass. The Senate Environment and Public Works Committee will hold a field hearing at the Plymouth Town Hall on decommissioning nuclear plants in the U.S.