Daily on Energy: Palmer aims to trade Energy Committee spot for Speaker’s office

PALMER LOOKS TO LEAP FROM ENERGY COMMITTEE TO SPEAKER’S OFFICE: A prominent House Energy Committee member is vying to wield the Speaker’s gavel: Republican Rep. Gary Palmer of Alabama.

The Alabama Republican formally announced his bid on Sunday, joining eight other GOP members in the race to be leader of the GOP conference. In a statement, Palmer argued that he can offer “steady, conservative leadership” that can unite the conference “behind a clear path forward.”

Why it’s significant: Out of the exhaustive list of candidates running to replace former Speaker Kevin McCarthy, Palmer is the only candidate that sits on the House Energy and Commerce Committee. Notably, he’s also a policy wonk, sitting as chair of the Republican Policy Committee. If Palmer were to assume the gavel, he would come in with a unique perspective on the energy landscape.

His track record: Palmer had influence over House Republicans’ sweeping energy package that passed the House earlier this year (but was stalled in the Senate). The bill includes his provisions defunding the $27 billion Greenhouse Gas Reduction Fund under the Inflation Reduction Act, and another that would prevent the implementation of an Energy Department efficiency rule regulating gas stoves.

As a prominent member of the House Energy Committee, Palmer sits on three subcommittees: the Energy, Climate, and Grid Security subcommittee; Environment, Manufacturing & Critical Minerals subcommittee; and Oversight and Investigations subcommittee.

The American Energy Alliance, a conservative advocacy group that is pro-fossil fuels, gave Palmer a 100% on their 2022 Energy Scorecard. Their annual report card is scored on principles that include “eliminating the subsidies, mandates, and special interest giveaways that lead to higher energy costs,” and “reducing the role of government in energy markets.”

Still, the congressman doesn’t always agree with his party on marquee bills. In 2016, the Alabama Republican was one of 21 House Republicans to vote against a major water infrastructure package that would improve drinking water facilities across the nation, among other things. He reasoned that the bill included a provision that would undermine Alabama’s efforts to resolve a water dispute with Georgia and Florida, arguing that it inserts federal power into a matter “that can and should be resolved by the states.” The dispute was over the allocations of water in two major river basins that cross some or all of the states’ borders: the Alabama-Coosa-Tallapoosa Basin and Apalachicola-Chattahoochee-Flint Basin.

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CHEVRON BEST ON FOSSIL FUELS WITH $53B PURCHASE OF HESS: Chevron announced it will purchase Hess Corp. for $53 billion, an all-stock transaction that comes as U.S. oil majors look to solidify their foothold in the industry amid rising oil prices and high demand forecasts.

Chevron said it will pay $171 per share for Hess, or a 10% premium to its 20-day average stock price. Hess shareholders will receive 1.025 of Chevron shares for each Hess share, a total value of $60 billion, including debt.

The deal will give Chevron access to Hess’s major oil field in the country and “positions Chevron to strengthen our long-term performance and further enhance our advantaged portfolio by adding world-class assets,” Chevron Chairman and CEO Mike Wirth said in a statement.

Chevron is looking to establish a foothold in Guyana, the new but prolific South American oil supplier. Guyana’s oil production is now the third-highest in the region, outpaced only by Brazil and Mexico. It is also on track to become the world’s fourth-largest offshore oil producer.

In announcing the deal, Chevron will join Exxon and China’s CNOOC, the only other active producers in the country. The projects are slated to produce a combined 1.2 million bpd by 2027.

Chevron’s acquisition of Hess is the second major U.S. oil deal to be struck in October alone, following ExxonMobil’s $60 billion buyout of Pioneer Natural Resources.

Together, the buyouts represent a major bet from U.S. producers on the long-term reliance of fossil fuels.

Guyana’s oil production has skyrocketed since 2019, when it had no measurable projects online. According to the U.S Energy Information, it now produces 260,000 bpd, an amount projected to rise to 480,000 bpd in 2024. Read more from Breanne here.

Wirth says Chevron is not evil: “We are not selling a product that is evil. We’re selling a product that’s good,” Wirth said in an interview with the Financial Times in which he defended his company’s plans to prioritize fossil fuels over decarbonization in the coming decades.

Wirth also said he wakes up at 3:45 every morning to work out before heading to the office after showering at 6 a.m.

CHINA SAYS IT WILL HOLD TALKS WITH RUSSIA ON ELECTRICITY: China said today it plans to hold talks with Russia on its power export pricing and volumes after Russian state energy group InterRAO raised costs for buyers to help tackle its budget deficit.

China’s State Grid vice president Jin Wei told Reuters that the companies agreed to Russa’s 7% “price adjustment” through the end of 2023.

As for 2024 prices and volumes, however, he said “it’s yet to be decided.” The two countries are expected to begin formal talks in November.

InterRao announced the price hikes earlier this month, and threatened to curtail or cut off completely supplies to countries that did not comply.

Russia has sought to forge closer ties to Asian buyers amid its ongoing war in Ukraine and punishing energy sanctions from the West. China is now on track to become the second-largest buyer of Russian power— second only to the landlocked Central Asian nation of Kazakhstan, which shares a border with both countries.

Moscow said last week it is also forging ahead with its Power of Siberia 2 gas pipeline, slated to run to China through Mongolia and provide an additional 50 bcm of gas annually.

EPA MOVES TO BAN TRICHLOROETHYLENE: The Biden administration has proposed a new ban on trichloroethylene or TCE chemicals—a “highly toxic” chemical used in cleaning and furniture care, arts and crafts spray coating, and automotive products, such as degreasers, brake cleaners, and tire repair sealants.

The proposed TCE ban is part of the Toxic Substances Control Act, or TSCA, which was amended in recent years to include health-base safety standards. If finalized, EPA officials said, the ban would take effect next year and immediately prohibit all manufacturing, processing, and distribution of consumer products containing TCE, as well as most commercial products.

Any continued use would be allowed only in areas where there is no known alternative—including, critically, the separation of EV battery materials, EPA officials said.

In that case, the rule calls for stringent workplace protections, including requiring companies to pass and abide by a workplace chemical protection plan.

Exposure to TCE even in highly limited concentrations is linked to serious health risks, including liver and kidney cancer, non-Hodgkin’s lymphoma, neurotoxicity, and reproductive toxicity.

It is also commonly found at Superfund sites across the country as a soil or groundwater contaminant, according to EPA officials.

The proposed ban aligns with the White House’s Cancer Moonshot, or the whole-of-government initiative aimed at “ending cancer as we know it” and limiting consumer exposure to known carcinogens.

“For far too long, TCE has left a toxic legacy in communities across America,” Michal Freedhoff, EPA’s assistant administrator for the Office of Chemical Safety and Pollution Prevention, said in a statement.

NEWSOM PRESSES CLIMATE AGENDA IN CHINA: California Gov. Gavin Newsom traveled to China Sunday to kick off a week-long tour focused on climate change, economic development, and areas of potential agreement—a trip that was authorized by the White House but sparked bipartisan criticism from members of Congress.

During the trip, Newsom will focus on areas on bolstering a working relationship with Beijing, including on areas of mutual interest, such as reducing air pollution, offshore wind, and solar manufacturing.

Newsom’s visit first included a stop in Hong Kong today, where he sought to tout California’s role as a partner in fighting climate change. Speaking to an audience at the University of Hong Kong, Newsom said they “can rely on California” to be an ally on climate issues, regardless of the results of the 2024 presidential election.

“I want you to know, regardless of what happens nationally, sub-nationally, you have a partner in the state of California,” he said.

Newsom will also travel to Beijing and Shanghai, as well as the Guangdong and Jiangsu provinces, his office said in a statement.

California and China have long shared a closer economic relationship compared to the rest of the country: China is California’s largest trading partner, and Newsom’s state is the largest importer of Chinese goods in the U.S. His predecessors, Jerry Brown (D) and Arnold Schwarzenegger (R) also visited China while in office.

But the trip has sparked criticism in Congress from Republicans and some Democrats amid rising tensions over trade, human rights, and Russia’s war in Ukraine, among other things—Chinese President Xi Jinping hosted Russian President Vladimir Putin earlier this month.

Newsom should “speak very clearly against the repression of the Hong Kong people,” Sen. Jeff Merkley, the Oregon Democrat, who co-chairs the Congressional Executive Commission on China, told Politico.

It has also invoked the ire of advocacy groups, pro-democracy groups, and human rights organization—more than 60 of whom blasted Newsom’s trip in a joint letter Friday, saying it “sets a problematic tone for future diplomatic engagement” by focusing narrowly on climate issues, and instead moves to “explicitly turn away from engaging on critical human rights issues.”

Newsom’s office has dismissed the criticism. “The climate crisis will not wait for geopolitical winds to shift, and we cannot achieve our shared goals without China,” Newsom spokesperson Erin Mellon said in a statement.

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