HOCHSTEIN TALKS CHINA AND INFLATION REDUCTION ACT: White House envoy Amos Hochstein kicked off a two-day energy summit in D.C. this morning with a candid recounting of some of the Biden administration’s biggest victories and challenges, including competing with China on clean energy manufacturing and battery production and creating tensions with allies with the Inflation Reduction Act – privileged conversations to which he has often had a front-row seat.
Hochstein, a former U.S assistant secretary of state for energy resources, now leads the U.S Partnership for Global Infrastructure (PGI)—a G-7-backed initiative aimed at competition with China, including traveling the world to look for ways Western financers can invest in mineral-rich countries while still abiding by the sourcing and manufacturing requirements under the IRA.
“Look, they’re 10 feet tall,” Hochstein said of China’s investments across the world. “Wherever I go, whether it’s Africa, Sub-Saharan Africa, Southeast Asia, Central Asia, Central South America, I get the same reaction, which is: ‘We’re going in this direction because they [China] come with money and you come with nothing,’” Hochstein said.
The countries are looking for investment, not cash, he noted, such as for railroads that can transport minerals more quickly and efficiently to international markets. These investments yield benefits over the long term, in Hochstein’s telling.
In another notable moment, he spoke frankly about the backlash to the IRA from allies and complaints of free trade violations. “When the IRA first passed, I went to Europe, or Europe came to us,” he said. “And I can’t tell you how many conversations we had in the Oval Office [with them] saying, ‘what you’re doing is “America First” … if you keep doing this we’re also going to have to do an IRA.’”
The White House answer, he said, was, “You should!”
“There’s no free trade in business. Energy has never been a subject of free trade, or free markets—it never was,” he said.
“We can’t pretend that on our side, it’s going to be a free market,” he added. “But we have to be cognizant that the other side is going to react.”
Welcome to Daily on Energy, written by Washington Examiner Energy and Environment writers Breanne Deppisch (@breannue_dep) and Nancy Vu (@NancyVu99). Email bdeppisch@washingtonexaminer dot com or nancy.vu@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.
U.S. LEADS IN OIL PRODUCTION FOR SIXTH YEAR IN A ROW: The U.S. has produced more crude oil globally than any other nation for the last six years, according to the Energy Information Administration – averaging 12.9 million barrels per day in 2023, per its latest report.
In December, crude oil production hit a new monthly record high of over 13.3 million bpd, with the EIA noting that it’s unlikely that the record will be broken by another country in the near term.
“The crude oil production record in the United States in 2023 is unlikely to be broken in any other country in the near term because no other country has reached production capacity of 13.0 million b/d,” the report reads.
As a combination, the U.S., Russia, and Saudi Arabia accounted for 40% of global oil production last year, with the three countries producing more oil than others since 1971. The next three largest producing countries – Canada, Iraq, and China – produced a combined 13.1 million b/d in 2023, only slightly more than what was produced in the U.S. alone. Read the report here.
SHELL’S EXPECTED SHIFT IN CLIMATE: Shell is considering slowing down its carbon emissions reduction plans as it updates its energy transition strategy, sources tell Bloomberg.
Changes to the company’s climate goals could come as soon as Thursday, as the company is planning on providing an update to its green energy and climate strategies. The move also comes as Chief Executive Wael Sawan has vowed to prioritize investments into oil and gas to yield more returns to shareholders.
And it’s not just them: BP announced last year it would produce more oil and gas and create more carbon emissions this decade than previously expected.
Reality check: The oil major’s 2050 net zero target has always been ambitious, with the company creating plans and outlooks on a 10-year scheme – meaning that the companies shorter-term plans wouldn’t reflect efforts to reach 2050 or 2035 carbon intensity reduction goals. Read more on that here.
FOR YOUR RADAR: The House Committee on Foreign Affairs will have a subcommittee hearing examining how to lessen the world’s dependence on Russia’s nuclear energy sector at 2 p.m. today.
Who’s testifying: David Albright, President of the Institute for Science and International Security; Anthony Ruggiero, an adjunct senior fellow at the Foundation for Defense of Democracies; and Theresa Sabonis-Helf, the concentration chair for Science, Technology, and International Affairs at Georgetown University.
Why this matters: Congress has been looking to ban uranium imports from Russia, but has fallen short of passing meaningful legislation through both chambers. Watch the hearing here.
LITHIUM COMEBACK? Lithium is showing indications of revival, with the spot price of lithium carbonate in China increasing to its highest level since December, Bloomberg reports.
As the publication outlines, prices have bounced back since supply surpluses jerked the market last year. Although lithium is a critical mineral that is essential to the creation of renewable technologies, supply has run ahead of demand, plunging prices to record lows. The retreat had forced some producers to cut output, such as Core Lithium Ltd.
“The lithium market is rebalancing, with industry curtailing production and projects,” UBS Group AG said in a recent report that also warned of an ongoing surplus. The group noted that there has been progress, “but we highlight it could be transitory if price sentiment lifts too far, too fast.”
But: Not everyone is convinced that the rebound is happening, however. The bump in lithium contracts “should not be interpreted as the end of the bear market,” Goldman Sachs Group Inc. said in a note, warning the surplus size is still notable. Read more on that here.
RUNDOWN
Wall Street Journal Why is my electric vehicle dead? Check the 12-volt battery
E&E News How Trump could exit the Paris climate deal — and thwart reentry
Reuters Nord Stream sues insurers in London over 2022 pipeline blasts
