Implementing those provisions as written has forced the administration’s hand on leasing and created new diplomatic challenges for Treasury to manage where it implements the updated EV credit.

EV requirements: During the days of “Build Back Better,” Manchin pilloried the Democrats’ proposed electric vehicle tax credits, in part for subsidizing products for which there is already excess demand (he often brought up EV wait lists), but also for propping up China and other geopolitical competitors who dominate the critical mineral supply chain.

The updated EV tax credit’s strict mineral sourcing and EV assembly eligibility requirements, demanded by Manchin, are designed to reshore the EV and battery supply chain. At the same time, they’re angering allies in Europe, Japan, and South Korea, all of which manufacture EV models that run aground of the updated credit’s North American-assembled eligibility requirement.

Treasury Secretary Janet Yellen said yesterday, in effect, that the administration’s hands are tied to address concerns of those regions, where leaders have alleged the credit’s requirements violate international trade law.

“I’ve heard a lot about the concerns of the Koreans and Europeans about those rules, and we’ll certainly take them into account,” Yellen said. But “the legislation is what it is” and the Treasury “[has] to implement the law that was written.”

Oil and gas leasing: The Inflation Reduction Act revamped the oil and gas leasing programs, which over the last year and a half have had few new lease sales due to Biden’s moratorium, litigation, and the expiring 2017-2022 offshore program for the Outer Continental Shelf.

Manchin, during the course of negotiations, had made the case that it serves U.S. energy security and climate goals, and negotiated pro-leasing provisions into the reconciliation bill.

Over the last several weeks, Interior has reinstated Lease Sale 257, the legally-challenged Gulf of Mexico lease sale from November 2021, and has announced two proposed notices of sale for previously canceled lease sales each in Alaska’s Cook Inlet and the Gulf — all on order from the IRA.

Interior has said the IRA removed its discretion over the lease sales by ordering the agency to carry them out by specific deadlines, i.e., its hands, like Yellen’s, are tied.

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

FIRST ‘TRULY GLOBAL’ ENERGY CRISIS, IEA CHIEF DECLARES: Tightening LNG markets and cuts from the world’s largest oil producers have put the world in the middle of the world’s “first truly global energy crisis,” the director of the International Energy Agency, Fatih Birol, said today.

Birol said at Singapore’s International Energy Week that global markets are already tighter than usual due to rising LNG demand from the EU as it races to offset Russian fossil fuels, a situation he warned could worsen if China’s economy begins to reopen and drives demand even higher.

Together, he said these things could lead to a sharp supply-demand imbalance, since just 20 million cubic meters of new LNG capacity will hit the markets next year.

Birol also criticized the OPEC+ to slash oil production by 2 million barrels per day. He described the cuts as “risky,” noting that the IEA predicts global demand growth will sit around exactly that amount for the remainder of the year.

“[The cuts are] especially risky as several economies around the world are on the brink of a recession, if that we are talking about the global recession… I found this decision really unfortunate,” he said.

Birol also weighed in on the G-7’s proposed Russian oil price cap, saying details must be ironed out before it takes effect in six weeks. Leaders must also secure buy-in from the world’s major oil importers, he said.

APPLE TO REQUIRE SUPPLIERS TO DECARBONIZE: Apple announced new clean energy investments in Europe today and said it will accelerate work with its suppliers to decarbonize operations related to the production of all Apple-related products.

The new steps come as the iPhone maker seeks to advance its goal of reaching carbon-neutral status by 2030, and decrease its carbon footprint from electricity used by consumers to charge their iPhones.

Apple will require its supply partners to report progress on carbon neutrality goals—specifically Scope 1 and Scope 2 emissions reductions related to the production of Apple products, and “will track and audit annual progress.”

More than 200 suppliers of Apple’s suppliers, representing 70% of its direct manufacturing spend, have already committed to using clean power for all Apple production, the company said.

Apple also announced new investments in large-scale solar and wind projects in Europe, which will produce between 30 and 300 megawatts of clean energy.

“In total, the planned investments will add 3,000 gigawatt hours per year of new renewable energy on the grid,” Apple said.

JUST 5% OF U.S. PLASTIC WAS RECYCLED LAST YEAR, NEW STUDY FINDS: Just 5% of U.S. plastic waste was recycled in 2021, according to a new study published yesterday by Greenpeace—a drop in the bucket compared to the total 51 million tons of plastic waste generated in the U.S. during the same time period.

In fact, not a single type of plastic packaging in the U.S. meets the definition of “recyclable” under the FTC or the Ellen MacArthur Foundation’s new plastic economy initiative, the report found. And recycling actually decreased in the U.S. compared to recent years, down from 8.7% in 2018 and a slightly higher 9.5% in 2014.

The report concluded that the problem does not actually lie with households, but instead must be addressed at the plastic production level and involve curbing production of single-use plastics. Read the full study here.

NEW ENGLAND DEMOCRATS ASK BIDEN TO TAP HEATING OIL RESERVE: House Democrats from New England called on President Joe Biden to order a release from the Northeast Home Heating Oil Reserve, or NEHHOR, to help heat homes in New England this winter.

Democrats said Russia’s war in Ukraine and the COVID-19 pandemic have disrupted global energy markets, and could justify a release from the oil reserve as winter approaches.

Biden has the authority to release the roughly 1 million barrels of home heating oil in the reserve under certain circumstances, including a regional supply shortage. In the letter, members noted that supplies are 63% below their five-year average in New England, an area that relies heavily on heating oil and natural gas for winter heating.

“These market strains disproportionately impact New England households many of which depend on home heating oil to heat their homes,” the letter read. “Families should not be forced to make hard choices about keeping loved ones warm and healthy and putting food on the table.” Read more here.

UN TO INSPECT UKRAINE’S NUCLEAR SITES AMID DIRTY BOMB CHARGES: United Nations inspectors will examine a pair of Ukrainian nuclear facilities to verify or invalidate Russia’s allegation that Ukraine is plotting a “dirty bomb” attack in eastern Ukraine, the Washington Examiner’s Joel Gehrke reports.

A senior Russian military official claimed yesterday that organizations in Ukraine were directed to create a “dirty bomb.” Officials from the U.S., EU, and UN have challenged the allegation.

Rafael Grossi, director general of the UN’s International Atomic Energy Agency, said yesterday his agency “inspected one of these locations one month ago and all our findings were consistent with Ukraine’s safeguards declarations” and that “no undeclared nuclear activities or material were found there.”

REFINERS CHALLENGE BIOFUELS MANDATE AHEAD OF EPA PROPOSAL: A trade group representing union workers and independent oil refiners called on the Biden administration to reform the Renewable Fuel Standard, arguing that its blending requirements make fuel more expensive and threaten refining jobs.

The Fueling American Jobs Coalition is picking up on advocacy efforts from the spring, when gasoline prices began climbing toward a new record, ahead of the EPA’s upcoming 2023 biofuel blending proposal by launching a new TV ad campaign in Philadelphia and Washington, D.C., media markets.

The cost of Renewable Identification Numbers, which refiners may purchase to comply with the standard, have ballooned and add some 20 to 30 cents per gallon, the group said.

EPA is expected to propose biofuel mandate levels for 2023 by Nov. 16.

The Rundown

E&E News Biden struggles to sell climate win in final midterm stretch

Bloomberg This Chinese province has more EV chargers than all of the US

Canary Media Who should pay to help coal communities in the energy transition?

Financial Times Lithium miner to create US-listed company as shortages hit electric cars

Calendar

TUESDAY | OCTOBER 25

5:30 p.m. The Steamboat Institute and the University of Maryland will host a debate on this resolution: “Climate science compels us to make large and rapid reductions in greenhouse gas emissions,” moderated by the Washington Examiner’s Sarah Westwood. Daniel Schrag, director of the Harvard University Center for the Environment, will argue the affirmative, and Steven Koonin, energy undersecretary in the Obama administration, will argue the negative.

WEDNESDAY | OCTOBER 26

The three-day International Atomic Energy Agency’s International Ministerial Conference, titled “Nuclear Power in the 21st Century,” kicks off in Washington, D.C.