A POTENTIAL BOOST FOR CALIFORNIA OIL 

Phillips 66’s return to California could offer a boost for the state’s oil market, as refiners have fled and drivers in the state face some of the highest gas prices in the country.

After ending its refining operations last year in California, Phillips 66 announced earlier this week that it will be returning to the state to work on a massive pipeline project that will bring fuel to California from the Midcontinent and Gulf Coast region. 

As a reminder: Phillips 66 is partnering with Kinder Morgan and HF Sinclair on the $5 billion Western Gateway Pipeline project. The 1,300-mile pipeline would transport up to 230,000 barrels of oil per day from St. Louis and the Gulf Coast to Arizona and California. The project is expected to be completed by 2029. 

The California impact: A spokesperson for California Gov. Gavin Newsom’s office expressed support for the new pipeline, telling Daily on Energy that the industry has long described California as a “fuel island” and said that status has been a challenge.

“Now, we have a solution underway — a bridge connecting California to the rest of the country’s fuel supply,” the spokesperson said. “We’re encouraged by this investment and support efforts that strengthen the resiliency of California’s fuel supply as we continue reducing our dependency on oil.”

California for years has relied heavily on foreign oil sources, including from countries in the Middle East, and faced some supply chain disruptions due to the war in Iran. At the same time, California has lost about 17% of its oil refining capacity in recent years. 

Michael Mische, professor at the University of Southern California, told Maydeen that the pipeline will be very effective, adding that anything that reduces foreign dependency on crude oil and gasoline is welcomed. 

In regards to California gas prices, Mische said there will be little influence from the project, but it will have “a psychological effect on stabilization.” 

He noted that out of the 230,000 barrels, at best, around 105,000 will go to California, citing that Phillips 66 has said the pipeline would supply Arizona with about 125,000 barrels of oil. 

“It is badly needed, and it’s going to have a positive effect on the markets. There’ll be some stability and some more assurance as to the availability of the product,” Mische said. 

However, he added that “it does nothing for the in-state producers of crude oil and it does nothing for the in-state producers of gasoline. There’s no value to the producers of crude oil here or gasoline to the surviving refineries.” 

BULLDOZERS IN TEXAS’S BIG BEND NATIONAL PARK – WHAT’S GOING ON? 

You may have seen videos circulating around on social media this week of bulldozers and other construction equipment in the Big Bend National Park. 

This park stretches around 800,000 acres in Texas, featuring stunning landscapes, canyons, desert mountains, and is home to hundreds of species of reptiles, mammals, birds and plants. Sea fossils and dinosaur bones have also been found in the national park, which contains more than 500 miles of the U.S.-Mexico border. 

So what’s happening to this federal land? 

The plan: The Trump administration is spending about $1.7 billion to increase border security in the region. This includes the construction of several miles worth of vehicle barriers, surveillance cameras, lights, sensors, and a new patrol road. 

Images show that officials have already begun to transport heavy machinery into the park, clearing brush and trees. 

The Daily Mail, citing sources with Border Patrol, previously reported that Customs and Border Protection was planning explosives to blow craters into bedrock in the park. 

The pushback: The construction has been subject to criticism from both Republicans and Democrats, who have expressed concerns that the border security infrastructure will ruin the beauty of the park, disrupt wildlife migration, threaten Native American sites, limit access to certain areas, and harm the local economy. 

One local sheriff, a Republican, has questioned whether the extent of the construction and clearing of the desert land so far has been at all necessary. 

“Border security matters. But before permanently altering a national park, Americans deserve clear evidence that the environmental cost is necessary, and that less destructive options cannot do the job,” the Republican leaning-American Conservation Coalition also said this week. 

Texas Republican Sen. John Cornyn even sent a letter to DHS Secretary Markwayne Mullin last week, urging him to meet with local stakeholders before any more construction continues.

So far, Mullin has waived dozens of federal and state requirements to allow for the construction activities, including requirements under the Endangered Species Act and National Environmental Policy Act.   

The project is facing a number of lawsuits from environmental and conservation groups. The most recent was filed by a tribal nonprofit and outdoor recreation company today. 

Admin’s defense: The Trump administration has defended the construction and specifically criticized those who accused officials of erecting a 30-foot-wall. It is worth noting that the administration’s plan initially was to build a 30-foot steel fence through the park, though the plans were quietly changed after local objections. 

“What people are seeing right now is survey and design work—NOT construction of a wall through the park,” CBP Commissioner Rodney Scott said in a statement. “We are working to preserve the landscape and protect the access visitors and local businesses depend on…As we strengthen the border across the Southwest, we will not leave Big Bend as an opening for cartels to exploit by shifting their routes and tactics.”

While the administration has pointed to border security concerns as its reasoning for the construction, illegal border crossings in the national park have significantly fallen in recent years. 

In fact, CBP data reviewed by Daily on Energy show that crossings in the Big Bend Sector have made up the smallest amount recorded in the Southwest region so far this fiscal year. 

All the rest

OIL HEADED FOR WEEKLY GAIN: We’re headed to another market close and still have no news on the potential ceasefire deal between the U.S. and Iran, leaving crude prices in limbo once again. 

After sharply increasing at the start of the week, prices have hovered around similar levels the last couple of days. Part of this is due to the administration’s insistence that more oil is making it through the Strait of Hormuz, but it still remains a fraction of what was seen before the war. There has also been little to no change in the amount of refined products making it out of the gulf. 

“The lack of a durable Hormuz agreement and continued threats across both Hormuz and the Red Sea should keep a sizeable geopolitical premium embedded in oil prices,” Soojin Kim, analyst with MUFG, told the Wall Street Journal. 

Just after 3 p.m. EDT, Brent crude was up 1.68% and was selling at $88.53 a barrel. Meanwhile, West Texas Intermediate rose 1.34% to sell at $82.34 a barrel. Week-over-week, both international and domestic benchmarks were up by around 5%. 

TEXAS VOTERS AREN’T OPENING THEIR ARMS FOR DATA CENTERS: As Republican politicians become more wary of greenlighting rapid construction of data centers, some of their constituents are sharing that skepticism. 

If you forgot: Texas Republican Gov. Greg Abbott issued a moratorium earlier this month on the construction of data centers until these projects are subject to an audit by state regulators. 

What’s interesting: New polling conducted among Texas voters, show that most – regardless of politics – are not in favor of these AI facilities being built in their communities. 

In fact, 60% of those polled in the recent Emerson survey said they would oppose data centers being built in or near their areas. Only 30% said they would support the construction. 

Broken down further, 73% of Democrats, 47% of Republicans and 67% of Independent voters said they were in opposition. Republicans made up the largest share of those in support, at 43%, while only 22% of Democrats and 24% of Independents agreed. 

You can find the full survey here. 

CAFE STANDARDS SET TO BE ROLLED BACK: The Department of Transportation’s final rule weakening the Biden administration’s corporate average fuel economy standards of CAFE standards have completed its White House review, E&E News reports. 

What are the CAFE standards? The CAFE standards require automakers to meet fuel efficiency targets for all cars and trucks. The targets are aimed at lessening energy consumption and reducing consumer costs and greenhouse gas emissions.

As a reminder: The president’s One Big Beautiful Bill Act eliminated penalties for automakers who failed to meet the CAFE standards. Last December, the administration proposed an overhaul of the Biden administration’s CAFE standards for model years 2022 to 2031. 

The new CAFE standards proposal would significantly scale back the requirements by allowing manufactures to meet standards by gas-powered cars, and not requiring a shift to EVs.

ICYMI – DOI EXPANDS HUNTING AND FISHING OPPORTUNITIES: The Department of the Interior announced yesterday that it would expand hunting and fishing opportunities on federal lands. 

Under the department’s final rule, more than 95 million acres, or over 95%, of National Wildlife Refuge System Lands will be available for hunting and other outdoor recreation. 

The rule will add 1,488 new hunting and sports fishing opportunities across 32 states, DOI said. It would increase access at 111 field stations, including 107 national wildfire refuges and four national fish hatcheries. It also establishes the first-ever hunting or sport fishing opportunities at 14 refuges and three hatcheries. 

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