Daily on Energy: Biden asking oil companies for help ahead of climate summit

But President Joe Biden finds himself at the mercy of unpredictable global energy markets, and is desperately trying to confront the issue of high energy prices to avoid backlash against his aggressive agenda to move the economy off fossil fuels.

The predicament is leaving Biden vulnerable to attacks from all sides.

Liberal climate activists say any move to encourage greater oil and gas production to offset rising prices undermines his push for countries to adopt more stringent emissions reduction pledges at COP26. Biden is also encouraging U.S. natural gas exporters to keep shipping LNG abroad “in order to ease the global shortage,” White House Press Secretary Jen Psaki said yesterday.

Industry groups, meanwhile, are using the situation as leverage to poke Biden administration and Democratic policies they argue would make the energy price and supply crunch worse, such as making it harder to lease oil and gas on federal lands, and imposing a new fee on methane emissions.

“No objective person is going to blame the administration for the current global energy crisis,” George David Banks, the former top international energy adviser for President Donald Trump, told Josh. “But Democrats do have a challenge when this type of problem arises and it’s really bad timing for COP26.”

The current crisis could make energy costs top-of-mind for people who might not otherwise notice it during periods of stability. That could make it hard to drive momentum for an aggressive action to address climate change.

“If you have a hierarchy of needs, access to energy is going to always trump environmental and climate goals. It’s going to make it harder for countries to lean forward,” Banks said.

Welcome to Daily on Energy, written by Washington Examiner Energy and Environment Writers Josh Siegel (@SiegelScribe) and Jeremy Beaman (@jeremywbeaman). 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.

IT’S NOT JUST GASOLINE PRICES: Nearly half of U.S. households that warm their homes with natural gas can expect to spend an average of 30% more on their bills this winter than last year, according to the Energy Information Administration.

The EIA attributed the rise to higher commodity prices for natural gas, crude oil, and petroleum products, which are being passed through to retail prices, and the likelihood that the U.S. is set to experience a cold winter.

Natural gas shock: Rising natural gas prices, spiking to their highest level in over a decade, could present an especially big shock to the economy. Natural gas is the primary heating fuel for nearly half of U.S. households.

The U.S. economy has come to rely on natural gas as an electricity and heating source thanks to endless supply from the shale boom, and homes and businesses have grown accustomed to a long period of low prices.

But today, despite the increase in demand, U.S. natural gas producers are reluctant to drill more because they face growing pressure from Wall Street to demonstrate capital discipline. It’s unclear if producers will step off the sidelines, although industry groups are expressing confidence that they will.

BIDEN PRESSURED TO STOP FOSSIL FUEL INFRASTRUCTURE: Liberal climate activists are increasing pressure on Biden to intervene to stop proposed fossil fuel infrastructure projects.

The group Oil Change International released a report yesterday showing that Biden stopping 24 key fossil fuel projects could prevent a massive amount of emissions (400+ coal plants’ worth)

The vast majority of these potential emissions are associated with projects that have not received full federal approval, started construction, or finished construction.

Projects analyzed include the Line 3, Dakota Access, and Mountain Valley Pipelines, along with a host of planned LNG export terminals.

Biden, outside his fulfilling of a campaign promise of revoking a permit for the Keystone XL pipeline, has been reluctant to stop fossil fuel infrastructure projects, upsetting activist groups who say that shows a level of unseriousness in meeting his climate goals.

Protestors have demonstrated outside the White House this week as part of a “People vs. Fossil Fuels” campaign.

JOHN KERRY’S WARNING TO CONGRESS: As the U.N. climate summit ticks closer, the Biden administration is using inconsistent messaging on what legislative failure would mean for global negotiations over emissions targets.

Climate envoy John Kerry told the Associated Press in a new interview that Congress failing to pass legislation “would be like President Trump pulling out of the Paris agreement, again.”

Biden’s top domestic climate adviser, Gina McCarthy, has used different language to describe the importance of Democrats passing their stalled social and climate spending bill, arguing the administration can still meet its goals through regulations and other executive actions.

“I don’t think we need to have every penny in here to make tremendous progress,” she said on a webinar hosted late last month by the group Environmental Entrepreneurs.

McCarthy also previously said the administration doesn’t need to “rely on that to get to where we need to go.”

The mixed messaging shows the administration is scrambling to assure other world leaders of U.S. credibility, which is in question given the uncertain political prospects for major climate legislation from the world’s second largest emitter.

BIDEN PLANS SHOW OF FORCE FOR COP26: The White House confirmed this morning that Biden will travel to Glasgow from Nov. 1-2 to participate in the U.N. climate summit.

Biden also is sending 10 cabinet members and senior administration officials to join him at COP26, in addition to McCarthy and Kerry, according to CNN.

Administration officials attending are: Secretary of State Tony Blinken; Transportation Secretary Pete Buttigieg; Energy Secretary Jennifer Granholm; EPA Administrator Michael Regan; Agriculture Secretary Tom Vilsack; Interior Secretary Deb Haaland; Treasury Secretary Janet Yellen; USAID Administrator Samantha Power; NOAA Administrator Rick Spinrad, and WH Office of Science and Technology Policy Director Eric Lander.

PUTIN: NS2 WOULD AMELIORATE EUROPE’S GAS CRUNCH: Vladimir Putin urged regulators to quickly approve the Russia-to-Germany Nord Stream 2 pipeline to boost gas supply to Europe and lower prices.

“The German regulator should make this decision. They have not yet decided,” Putin said during an energy conference in Moscow. “Of course, if we could expand supplies along this route, then, 100 percent, I can say with absolute certainty, the tension on the European energy market would significantly decline, and that would influence prices, of course. This is an obvious thing.”

Putin insisted the Russians would increase gas exports “as much as our partners ask,” but the Europeans are still struggling and the International Energy Agency has already been putting pressure on Russia to send them more gas — all while accusations fly that Russia is leveraging its exports to secure NS2 approval.

IEA DIAGNOSES OIL PRICE SPIKE: The International Energy Agency’s new monthly global oil outlook reinforces just why drivers are seeing the highest gasoline prices in seven years.

Falling COVID-19 cases are driving demand generally, and high prices for other fossil fuel sources are leading power producers and industry to seek out oil in order to fuel operations.

“Oil prices are scaling multi-year highs as a shortage of natural gas, LNG and coal boosts demand for oil, which could keep the market in deficit through at least the end of the year,” IEA says in its report.

But IEA offers some hope for relief. OPEC+’s commitment to increase its output by by 400,000 b/d for the month of November and a bounce back for Gulf Coast’s refiners after Hurricane Ida are set to improve global supply going forward, it says.

OIL DEMAND DROPS: U.S. oil demand slipped last week, the EIA said in its Weekly Petroleum Status report this morning.

Oil demand fell to 19.88 million barrels per day from 21.53 million barrels p/d the week prior.

Consumption of motor gasoline, jet fuel, and diesel decline across the board.

INTERIOR DETAILS OFFSHORE WIND LEASING PLAN: The Interior Department announced plans yesterday to complete up to seven new offshore leases by 2025 in support of the Biden administration’s goal to deploy 30 gigawatts of offshore wind energy by decade’s end.

The department’s Bureau of Ocean Energy Management will oversee the potential project targets, which include all regions from the Gulf of Mexico to coastal Oregon.

“We are working to facilitate a pipeline of projects that will establish confidence for the offshore wind industry,” BOEM Director Amanda Lefton said.

A BOEM outline shows the bureau targeting the first lease sale off the coast of New York during the first quarter of 2022.

DOL PROPOSAL ENCOURAGES FIDUCIARIES TO CONSIDER CLIMATE RISKS: The Labor Department announced a proposed rule yesterday that would allow fiduciaries more flexibility to consider climate-related risks while directing retirement investment funds.

The proposal says it makes changes “specifying that consideration of the projected return of the portfolio relative to the funding objectives of the plan may often require an evaluation of the economic effects of climate change and other [environmental, social, or governance] factors on the particular investment or investment course of action.”

“The proposed rule announced today will bolster the resilience of workers’ retirement savings and pensions by removing the artificial impediments – and chilling effect on environmental, social and governance investments – caused by the prior administration’s rules,” Ali Khawar, acting assistant secretary for the Employee Benefits Security Administration, said in a statement.

Republicans said the rule would put pressure on funds to prioritize non-financial goals. “The Biden administration is taking its radical climate change and pro-union boss agenda too far—this time jeopardizing…retirement savings,” said Reps. Virginia Foxx of North Carolina and Rick Allen of Georgia, the top Republicans on the Education and Labor Committee.

NET-ZERO ASPIRANTS OUTLINE THEIR POLICY NEEDS: A cross-industry coalition of businesses are outlining just what they need to achieve net-zero emissions ahead of the upcoming Glasgow climate summit.

Executives representing aviation, banking, steel, and shipping joined a forum this morning as part of the Mission Possible Partnership to discuss what they need to achieve emissions cuts sufficient to meet decarbonization goals by 2050.

The message from aviation representative Scott Kirby, CEO of United Airlines, was that the industry needs a vast expansion of sustainable aviation fuel to reduce reliance on traditional jet fuel — electric planes simply aren’t a ready technology, he emphasized — as well as accountability for competitors.

“We’ve got to avoid letting companies — airlines, steel — get away with greenwashing,” United Airlines CEO Scott Kirby said.

Executives representing steel and shipping threw around the term “level playing field,” saying that they need things like global carbon pricing or carbon border adjustment policies to decarbonize while also competing with the likes of China.

The Rundown

Washington Post Plug-in cars are the future. The grid isn’t ready.

Washington Post Democrats’ central climate program is in trouble

New York Times China’s power problems expose a strategic weakness

Calendar

TUESDAY | OCT. 19

10 a.m. 366 Dirksen. The Senate Energy and Natural Resources Committee will hold a hearing to consider the nominations of Willie Phillips to be a member of the Federal Energy Regulatory Commission, Brad Crabtree to be an Assistant Secretary of Energy for fossil energy and carbon management, and Charles Sams III to be director of the National Park Service.