GUYANA TENSIONS UPDATE – VENEZUELA DEFENDS MILITARY BLUSTER: Venezuela’s government did not dispute new evidence that it is bolstering its military presence along its eastern border with Guayana— with leaders instead arguing the actions are a necessary response to Guayana’s granting of what it called illegal contracts in the oil-rich Essequibo region.
Asked Sunday about satellite images obtained by the Center for Strategic and International Studies that appear to show Venezuela building its presence on the Ankoko Island, long a point of contention between the two countries, Venezuelan officials simply accused Guyana of granting oil concessions “in a maritime area that is indisputably Venezuelan.” They did not deny the accusations of additional troops or construction materials.
The deputy head of CSIS’s Americas program, Christopher Hernandez-Roy, described the movements as “escalatory behavior on the part of Venezuela” that “creates opportunities for miscalculation and loss of control over events on the ground.”
Background: Tensions over the Essequibo, the 61,000-square-mile territory granted to Guyana by international arbiters in 1899, soared beginning in 2015 after its waters were found to house vast offshore oil resources. Since then, Venezuela has revived its claims to the territory, and prompted Venezuelan President Nicolas Maduro to hold a December referendum claiming sovereignty in the region.
That vote sparked fears of annexation and put Latin American countries on edge. And although Guyanese President Irfaan Ali and Maduro appeared to reach consensus at negotiations hosted later that month on the island of St. Vincent—during which both leaders agreed not to use force against or threaten one another—Venezuela’s recent activity near the Ankoko Island raises the specter of future conflict and could undo months of diplomacy.
Brazil, which shares a border with both countries, has been on edge for weeks, sent additional soldiers, military trucks and armored vehicles to reinforce their shared border earlier this month.
U.S. officials staged several trips to Guyana this year in a show of support, and the Associated Press reports that Ali and Maduro are expected to meet a second time to discuss the Essequibo, though no details have been publicly announced. Read more from CSIS here.
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DIAMONDBACK ENERGY PURCHASING ENDEAVOR IN $26B DEAL, REFLECTING BROADER PERMIAN PUSH: The shale producer Diamondback Energy said today it plans to purchase Endeavor Energy Partners in a $26 billion deal that would give it control of the largest private oil and gas company operating in the Permian Basin.
Combined, the merged company would pump roughly 816,000 barrels of oil and gas per day, behind only Exxon and Chevron, two energy majors that recently announced major deals aimed at expanding their presence in the Permian.
Exxon, for its part, announced its roughly $60 billion purchase of Pioneer Natural Resources in October—a deal that gives it control of a combined 1.3 million barrels of oil and gas in the Permian. Chevron, meanwhile, narrowly beats out the expected production rate of Diamondback-Endeavor, with plans to produce 867,000 barrels of oil and gas per day.
SAUDI MINISTER CITES GREEN TRANSITION FOR 180 ON OIL CAPACITY EXPANSION: Saudi Arabia’s energy minister cited the so-called green transition as the reason behind the decision to halt state-owned oil giant Saudi Aramco’s planned oil capacity expansion, noting Aramco already has investments in other areas of energy production that will help it meet its 2060 net-zero emissions target.
Asked today about halting the plans—which would have increased capacity to 13 million barrels per day by 2027, or an 8% uptick from current levels— Saudi Energy Minister Abdulaziz bin Salman said the kingdom is “transitioning.”
And Aramco, which has invested in petrochemicals, renewables and other forms of energy, is doing the same, he said.
“I think we postponed this investment simply because … we’re transitioning,” bin Salman said at a conference in Dhahran. “And transitioning means that even our oil company, which used to be an oil company, became a hydrocarbon company. Now, it’s becoming an energy company.”
Still, he stressed the decision is under ongoing review. “We are in a continuous mode of reviewing and reviewing and reviewing, simply because you have to view the realities [of the market],” he said.
…Meanwhile, Saudi Aramco CEO Amin Nasser said that the state-owned oil giant has a large cushion of spare oil to help prevent any major price hikes or supply disruptions. Aramco “remains ready” to increase or expand its capacity at the order of the kingdom, he said during an interview at the same conference.
Nasser also said they expect to see “robust” global oil demand this year, projecting demand will increase by 1.5 million million barrels per day through 2024. “We see 104 million barrels of demand for this year, so a growth of about 1.5 million barrels,” he said.
…MEANWHILE, FRENCH CEO WARNS OF UNDERSELLING COST OF TRANSITION: French TotalEnergies CEO Patrick Pouyanné warned governments against underbilling the cost of the energy transition, saying in an interview that leaders must acknowledge publicly what he says is a simple truth: lower-emissions power sources will come with a higher price tag.
Speaking to the Financial Times, Pouyanné said it is “naive” for politicians and leaders to think they can reduce oil and gas production before securing reliable renewable energy resources— especially given the fact that global energy demand has and will continue to grow.
“The pace of transition will not be the same everywhere,” Pouyanné said.
He also reiterated his view that the transition to renewable sources will result in permanently higher energy costs: “I know that there is a theory which says renewables are cheaper, so it will be a lower price,” Pouyanné said. “We don’t think so because a system where you [have] more renewable intermittency is less efficient … so we think it’s an interesting field to invest in.”
Pouyanné’s plan for TotalEnergies—which includes increasing oil and gas output by a combined 2%-3% per year through the end of the decade—has remained largely unchanged in his 10 years as CEO. Perhaps the biggest shift was his push for the European Union to diversify its energy supply following Russia’s war in Ukraine.
In particular, he said, the bloc should seek to protect long-term U.S. LNG exports, following Biden’s pause on new export terminal approvals. “The U.S. says that they can help Europe with their security of supply,” Pouyanné told the outlet. “Let’s negotiate that agreement.” Read the interview in full here.
ADS CRITICIZING BIDEN’S EV PUSH TO RUN IN PURPLE STATES: The American Fuel & Petrochemical Manufacturers launched a seven figure ad campaign across seven purple and red states, criticizing the Biden administration’s efficiency standards for combustion vehicles – outlining how fossil fuel groups are planning to come after President Joe Biden during this election cycle.
The ad is expected to run in mostly purple states – Pennsylvania, Wisconsin, Michigan, Nevada, Arizona, Ohio – and the red state of Montana, where there will be a key Senate race this year. In the ad, the trade association called the Biden administration’s new regulations a “ban” on gas-powered cars, and highlighted the various issues that electric vehicles face on the road: the lack of chargers in rural areas, the difficulty of driving long distances with EVs, and the expenses associated with the vehicles.
A refresher: The Environmental Protection Agency has introduced rules that would set stronger tailpipe emissions standards and the National Highway Traffic Safety Administration has moved to tighten fuel efficiency rules – supporting a transition to EVs.
Why does it matter: Expect for Biden to get a lot of flack from trade groups and conservatives for their rollout of their efficiency standards on everything ranging between appliances and cars. But the states these ads are running in could make or break Biden’s reelection bid.
U.N. MIGRATORY SPECIES REPORT LOOKS GRIM: The United Nations is out with the first ever global survey focused on migratory species – and the findings are looking dire.
The report, released this morning, showed that more than one in five of migratory species are threatened with extinction – and while some migratory species are improving, nearly half are showing population declines. Nearly all – 97% – of the migratory-listed species of fish are threatened with extinction.
While the report focuses mainly on species that have been granted legal protections, it also features analysis linked to over 3,000 additional species – and found that 399 species are threatened or near threatened.
Why is this happening: The report points to two main threats to the migratory species: overexploitation and habitat loss due to human activity. The report also lists out climate change, pollution, and invasive species as having a profound impact on migratory species. Read the study here.
LCV POURS SIX FIGURES INTO GEORGE SANTOS’ OLD SEAT: The League of Conservation Voters is getting involved in the special election for New York’s 3rd District, pouring just over $700,000 in a race that’s expected to be highly competitive, E&E News reports.
The campaign figure is more than LCV Victory Fund spent on any House race in the 2022 midterm election cycle – and it’s for a seat that was previously represented by former GOP Rep. George Santos before he was expelled over ethics and campaign finance-related allegations.
The candidates: Former Rep. Tom Suozzi is making a comeback bid, and running against Mazi Pilip, a Republican Nassau County state legislator.
Suozzi represented the district from 2017 to 2023, forfeiting his seat to run for governor – but lost to now-Gov. Kathy Hochul in the primaries. His district, however, became more Republican in the 2022 redistricting.
In an interview with Pete Maysmith, LCV’s senior president for campaigns, the group made it clear that they see the district as an opportunity to flip the House back to Democratic control.
“We have to put pro-climate, pro-democracy leadership back in charge of the House, and that process, that journey, starts with a special election in the disgraced George Santos’ seat,” Maysmith said in the interview. Read more on that here.
RUNDOWN
Wall Street Journal Can the U.S. Break China’s grip on solar?
E&E News EVs or ethanol? Midwest eyes deep CO2 cuts in transportation.
Politico House Dems game out climate messaging at policy retreat
