Welcome to Daily on Energy, written by Washington Examiner energy and environment writers Callie Patteson (@CalliePatteson) and Maydeen Merino (@MaydeenMerino). Email cpatteson@washingtonexaminer dot com or mmerino@washingtonexaminer dot com 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.

QUOTE OF THE WEEK: Not everyone is optimistic that Congress will be able to pass meaningful permitting reform this year, including West Virginia Attorney General J.B. McCuskey. 

During an interview with Callie earlier this week, McCuskey said he doesn’t believe this Congress will get permitting passed if it isn’t on the floor before the midterm elections. 

“I don’t think it’s going to get passed anyways,” he said. “I certainly hope it does, but there’s an astronomical amount of obstinance in Congress right now…it doesn’t feel like the art of compromise exists anymore.” 

STRAIT OF HORMUZ REOPENED: Iran’s foreign minister announced today that the Strait of Hormuz will be reopened for commercial vessels for the remainder of the ceasefire between Israel and Lebanon. 

Iran said the move was in line with the 10-day ceasefire agreement between Israel and Lebanon reached yesterday. President Donald Trump thanked Iran for reopening the key trading route, which has been effectively closed since the start of the war in February. 

The president noted that the U.S. blockade of the strait would remain in full force until there is a peace deal with Iran. The ceasefire is set to expire on April 22. 

Peace deal negotiations “SHOULD GO VERY QUICKLY IN THAT MOST OF THE POINTS ARE ALREADY NEGOTIATED,” Trump said on Truth Social. 

Trump has also said “Iran has agreed to never close the Strait of Hormuz again.”

“It will no longer be used as a weapon against the World!” he added.

PRICES FALLING: Oil prices plummeted today on the news of the reopening of the strait, with domestic and international benchmarks falling to around or below the $90 per barrel line. U.S. crude had plunged by as much as 12% in early U.S. trading, but recovered slightly by the afternoon. 

Just before 3 p.m. EDT, West Texas Intermediate had dropped by 10.62% and was selling at $84.63 per barrel. Brent crude was also down by 8.44% and was priced at $91.00 per barrel.

What does that mean for gas? While the markets see immediate changes in oil prices, it will take some time for that downward pressure to make its way to the pump. 

GasBuddy petroleum analyst Patrick De Haan has estimated that, based on current market conditions, the national average price of gasoline could fall to between $3.65-$3.95 per gallon by Memorial Day. By Labor Day, prices could even dip to as low as $3.35 per gallon. 

Similarly, De Haan is predicting that diesel could fall to an average of $4.95-$5.25 a gallon by Memorial Day and even drop to $4.30 a gallon come Labor Day. 

Though, as seen over the last six weeks, it’s important to remember that those predictions could soon change. 

PLUS – IEA CHIEF WARNS OF YEARS-LONG RECOVERY FOR ENERGY MARKETS: Earlier today, International Energy Agency head Fatih Birol warned that it could take years for markets to recover from the energy output lost amid the Iran war. 

In an interview with Reuters, Birol said it will take approximately two years to see worldwide energy flows reach pre-war levels. That does not mean each country will take two years to recover, as not all Gulf nations have faced the same extent of damage to their refineries and pipeline infrastructure. 

“But no new tankers were loaded in March,” Birol said. “There were no new deliveries of ​oil, gas ​or fuels to ⁠Asian markets. This gap is now becoming apparent.”

SUPREME COURT SIDES WITH OIL COMPANIES IN COASTAL EROSION LAWSUIT: The Supreme Court unanimously sided this morning with a group of oil majors, led by Chevron, who sought to move a lawsuit from state to federal courts in a bid to avoid paying damages for coastline damage caused by oil production in Louisiana. 

The details: The justices ruled 8-0 in favor of the oil companies, with Justice Samuel Alito recusing himself due to financial interests in ConocoPhillips. Justice Clarence Thomas wrote the majority opinion, saying the actions Chevron was being sued for implicate work it did for the federal government for fuel production during World War II, and therefore should be moved out of state court and into federal court.

The ruling means Chevron’s case will continue in federal court, and it puts into question the holding of a $745 million judgment a jury reached against the oil companies in state court. Chevron celebrated the Supreme Court’s ruling, saying it looks forward to advancing the case in federal court.

Read more from the Examiner’s Supreme Court reporter Jack Birle here. 

ANWR LEASE SALE SCHEDULED FOR JUNE: The Interior Department’s Bureau of Land Management announced this morning that it will be holding an oil and gas lease sale in the Coastal Plain of the Arctic National Wildlife Refuge on June 5. 

The details: The area stretches across 1.56 million acres, and at least 400,000 acres will be made available. It was not immediately clear exactly how many acres and tracts will be available in the June sale. BLM is legally required to conduct at least four lease sales in the Coastal Plain by 2035. 

The auction is the first in ANWR since the final days of the Biden administration. The Trump administration has since pointed to its March lease sale in the National Petroleum Reserve of Alaska, which saw historic bidding, as evidence that the oil and gas industry wants to develop oil and gas resources in the remote regions. 

“The record-breaking success of last month’s lease sale in Alaska’s National Petroleum Reserve sent a clear signal: There is robust and continuing demand for Alaskan energy, underscoring the need for more opportunities like the Coastal Plain sale,” Acting BLM Director Bill Groffy said in a statement. 

Read more from Callie here. 

U.S. RIG COUNT DROPS AGAIN: The number of active oil and gas drilling rigs in the U.S. dropped again this week by two, bringing the total to 543 rigs, roughly 42 fewer than this time last year, according to Baker Hughes. 

In total, Baker Hughes found that the number of offshore rigs dropped by two and the count of land-based rigs fell by one. The number of inland waters rigs rose by one. 

Broken down further, there are two fewer gas rigs online in the U.S. and one fewer oil rig. One miscellaneous rig was added to the total count. 

MAINE DATA CENTER BAN: Maine state legislators earlier this week passed a bill that would ban data centers until Fall 2027. 

However, the question remains whether Democratic Maine Gov. Janet Mills will sign the bill into law because it did not include an exemption for a small data center project that has been under development. Mills has prioritized a data center project that would reuse a former paper mill facility. 

Mills told reporters she has received the bill but said it is concerning that the exemption is not included. If the bill is signed into law, Maine will be the first state to ban data centers. 

The governor has until the end of next week to sign or veto the legislation. 

KENNEDY ON THE HILL: Health and Human Services Secretary Robert F. Kennedy Jr. was on the Hill this week, where he was questioned by lawmakers about a number of issues, including microplastics and a home energy assistance program. 

In a House Ways & Means Committee hearing earlier this week, Kennedy was asked to expand on the agency’s efforts to address the contamination of microplastics and PFAS, also known as the “forever chemical.” 

The secretary noted that the agency has put $144 million into its Systematic Targeting Of MicroPlastics program to create tools to measure and detect microplastics in humans. It would also develop ways to remove microplastics in humans. 

“The average American has a teaspoon full of microplastics in his brain,” Kennedy said. 

The Environmental Protection Agency and HHS earlier this month announced a plan to add microplastics as priority contaminants in drinking water. 

HHS also oversees the federal initiative known as LIHEAP or the Low-Income Home Energy Assistance Program. Trump’s fiscal year 2027 budget request would slash funding from LIHEAP, which helps cover heating and cooling costs for low income households. 

Kennedy told lawmakers on the House Appropriations Committee that there are some issues with LIHEAP. 

“The [Inspector General] report that came out in February showed a lot of corruption and LIHEAP, and there’s a lot of duplication in the States,” Kennedy said. but I want to say this, you gave me money this year for LIHEAP, and I spent that money. If you give me the money I’m going to spend it.” 

Kennedy is expected to testify in front of the House Energy and Commerce and Senate Finance Committees next week. 

RUNDOWN 

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