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REFINERIES GETTING A CLOSER LOOK: The White House, seeking to lower record fuel prices, has turned its eye to the nation’s refining capacity shortage, something oil industry players have been offering as an alternative for explaining current price hikes against Democrats’ gouging allegations.

A source confirmed that the White House is reaching out to refiners about issues facing the industry, as Bloomberg reported yesterday, although they said the conversation with administration officials reflected more a fact-finding mission than one premised on restarting closed refineries.

“They’ve quickly realized that refining capacity is the issue right now, and they’re trying to understand the factors behind the closures and why in the current margin environment, it doesn't look like capacity will come back online,” the source told Jeremy.

The numbers: Oil demand has recovered significantly from its pandemic lows, but it’s done so in a world with much less refining capacity than it had in 2019.

The globe has lost around 3 million barrels per day worth of refining capacity in the last few years. Nearly a third of that capacity, 1.1 million barrels worth, was shed in the U.S. due to a mix of factors, including the pandemic’s destruction of fuel demand (and the 2019 explosion of the Philadelphia Energy Solutions refinery in Pennsylvania, which removed 335,000 bpd of capacity).

With demand high again, the operative refineries are being highly utilized. U.S. refineries operated at 93.2% of their capacity last week, according to the Energy Information Administration. East Coast and Gulf Coast refineries are running at 97%.

What’s expected: Bodies like EIA and the International Energy Agency predict oil demand will continue to be strong for years to come, despite the overwhelming momentum behind green policies to shift toward electric vehicles and renewable energy.

The unknowns: At the same time, there are still many unknowns about how the ongoing war in Ukraine will affect supplies, or how the market will absorb the British embargo of Russian oil or any prospective embargo to which the Europeans might agree.

All of this makes it more difficult for refinery operators. If prices were to fall and stabilize, the source said, the green policies and ESG investment pressures favoring shifting away from fossil fuels could easily bring about a walking back of initiatives to reopen or invest in more refinery capacity.

“Once prices go back to normal, people won’t want you around anymore,” the source said. “[For investors] it’s not only, why should we look at reopening — why should we continue to invest at all?”

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.

DEMOCRATS VOICE STRONG SUPPORT FOR SOLAR PROBE: A group of six Democratic lawmakers sent President Joe Biden a letter yesterday voicing support for the Commerce Department’s investigation into whether solar panel components manufactured in four Southeast Asian countries—Malaysia, Vietnam, Thailand, and Cambodia—are being used as fronts for Chinese companies seeking to circumvent anti-dumping and countervailing duties.

“These laws are designed to ensure that American manufacturers and producers can compete on a level playing field, free from unfair trade practices,” the group wrote, led by Sens. Sherrod Brown of Ohio and Bob Casey of Pennsylvania.

It “is troubling that corporate lobbying against a simple investigation would reach this level of mass hysteria if there was not some concern over what career civil servants at [the Commerce Department] may uncover,” the group added.

The investigation has split the caucus, with a significantly higher number of Democrats on record opposing it for disrupting solar deployment.

PRUITT HAD SECURITY DETAIL SPEED THROUGH ONCOMING TRAFFIC – REPORT: A new internal report from EPA’s criminal enforcement division found that EPA administrator Scott Pruitt frequently “endangered public safety” during his tenure by asking his security detail to drive at high speeds due to frequently running late to meetings. Federal agents said that, as EPA chief, Pruitt told drivers to "speed it up" and instructed them to blaring sirens and lights to move through traffic.

“Security agents found Pruitt ‘hard to disobey’ despite the fact lights and sirens are typically only used in emergency situations,” the Examiner’s Kaelan Deese notes. “Pruitt would often say ‘we need to get there quicker,’ even saying, ‘Can you guys use that magic button to get us through traffic?’”

On one occasion in 2017, the report notes, Pruitt instructed an agent to turn on the emergency signals while driving into oncoming traffic so he could pick up his dry cleaning while running 35 minutes late to a meeting.

The report comes just months after Pruitt announced his plans to run in Oklahoma’s upcoming special election, seeking to fill the seat of outgoing Sen. Jim Inhofe, who plans to retire at the end of the current session. Pruitt, who served as Trump’s first EPA chief, stepped down from the position in 2018 amid multiple allegations of lavish spending and ethics violations.

FORD BEGINS F-150 LIGHTNING DELIVERIES: Ford began delivering its first fully electric F-150 pickup truck yesterday, successfully beating Tesla and other competitors to market in production of the first all-electric pickup truck. The first customer, who lives in rural Michigan and plans to replace his gas-powered F-150 with the fully-electric model, said he’d also put down a deposit on Tesla’s Cybertruck, and was weighing whether to purchase Rivian’s R1T.

The customer, Nicholas Schmidt, also owns a Tesla Model 3—a purchase he told Bloomberg made his family of farmers “real apprehensive.” “So when there were pickup trucks coming out that were going to be EVs, I said, ‘whichever one comes first, I’ll buy it.” The full electrification of the F-150 also marks a major victory for Ford, which, in a good year, sells roughly 900,000 F-Series trucks.

BOEM PROPOSES FIRST PACIFIC OFFSHORE WIND LEASE SALE: The Bureau of Ocean Energy Management proposed offshore wind lease sales covering nearly 600 square miles off the California coast, the first ever for the Pacific region.

Under its proposed sale notice, BOEM would offer 373,268 acres, more than a third of which are located in the Humboldt Wind Energy Area in northern California near Eureka. The rest are within the Morro Bay Wind Energy Area, near San Luis Obispo County in central California.

BOEM has held 10 competitive lease sales to date, several of which have been carried out during Biden's tenure. The bureau awarded additional leases for acreage off the North and South Carolina coasts on May 11.

SUPREME COURT REINSTATES BIDEN ADMIN’S CLIMATE COST-MEASURING METRIC: The Supreme Court said yesterday it will allow the Biden administration to use a higher estimate when calculating damages caused by greenhouse gas emissions, delivering a blow in the immediate term to Republican attorneys general who had sought to have the approach dismissed.

The decision is a temporary victory for the Biden administration as it looks to deliver on its climate goals, and will allow federal agencies to continue using the metric, known as the social cost of carbon, on an interim basis while litigation plays out.

Though the “social cost of carbon” amount is currently set at $51 per ton, some experts have pushed to raise it — to as much as $125 per ton.

GEORGIA EXTENDS GAS TAX SUSPENSION: Georgia Gov. Brian Kemp signed an executive order yesterday to extend the state’s gas tax holiday through July 14— seeking to give drivers in the state a longer reprieve from record-high fuel costs, which he and other Republicans have sought to cast as an extension of policies and used to assail Democrats as out-of-touch.

The move to extend the state gas tax—which stands at 29.1 cents per gallon—comes just days before the original suspension was slated to expire next week. Kemp’s office estimates that the law saved drivers some $300 million in taxes since it was first passed in March.

G7 NATIONS CALL ON OPEC TO HELP EASE ENERGY CRISIS: Energy ministers from Group of Seven nations called on OPEC today to increase oil supply in a bid to reduce record-high fuel costs and provide relief to international markets at a time of global urgency.

“We call on oil and gas producing countries to act in a responsible manner and to respond to tightening international markets, noting that OPEC has a key role to play,” said ministers in a communique published at the end of the two-day summit in Berlin.

“We will work with them and all partners to ensure stable and sustainable global energy supplies,” they added.

Their urging comes as OPEC+, which includes non-member Russia, has continued to rebuff calls from the West to drive up production beyond current targets, despite the massive surge in demand and Russia’s war in Ukraine, which has touched off a scramble for countries to secure non-Russian supplies.

The Rundown

Bloomberg How Australia is transforming grids away from coal power

Politico Europe Haggling with Hungary: How the EU could get a deal to ban Russian oil

ClimateWire Forest Service struggles to keep pace amid climate disasters



10:00 a.m. 406 Dirksen The Senate Environment and Public Works Committee will consider the nominations of Annie Caputo and Bradley R. Crowell to be members of the Nuclear Regulatory Commission.