WHAT’S HAPPENING TODAY: Good afternoon and happy Thursday, readers! President Donald Trump has reached a truce with Chinese President Xi Jinping on rare earths. China will pause its recent export restrictions on these materials, but will continue to enforce its existing restrictions on its minerals. Below, we break down the details of the agreement and the benefits China is gaining.
Trump also hinted that China could be purchasing oil and gas from Alaska as part of a broader trade deal, though the details remain unclear. We’ll be keeping an eye on this potential agreement as it unfolds over the coming weeks.
Plus, keep reading to find out which Russian oil company has ceded to the U.S. after the latest round of sanctions were announced last week.
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.
TRUMP’S TRADE TRUCE WITH CHINA: Chinese President Xi Jinping has postponed the latest export restrictions on rare earths following his meeting with President Donald Trump in South Korea today.
China has agreed to lift export controls imposed earlier this month on five additional rare earths. China controls the majority of the critical mineral and rare earths global supply chain, which has provided Beijing with leverage against the United States.
“China has agreed to continue the flow of Rare Earth, Critical Minerals, Magnets, etc., openly and freely,” Trump said on Truth Social.
Despite the recent truce between the U.S. and China over the latest export controls, the agreement does not address previous export restrictions.
Last December, China imposed similar restrictions on metallic elements used for semiconductors and military ammunition. Then, in April, China suspended exports of seven types of rare earth metals and magnets, requiring companies to gain a license from the ministry for any exports.
Plus…a possible deal with Alaska: In the same post to Truth Social, Trump hinted that the U.S. was inching closer to reaching an energy trade deal, with exports from Alaska at the center of discussions.
“China also agreed that they will begin the process of purchasing American Energy,” Trump wrote. “In fact, a very large scale transaction may take place concerning the purchase of Oil and Gas from the Great State of Alaska.”
It was clear the final terms of any such agreement have not been set, as the president said Energy Secretary Chris Wright, Interior Secretary Doug Burgum, and the administration’s “respective Energy teams” would be meeting to discuss the deal.
When pressed for further details, both Wright and Burgum’s team referred to statements previously made by the secretaries broadly praising Trump’s energy dominance agenda. During an interview with Bloomberg, Wright did say a deal could help China reduce imports of Russia oil and gas, saying it would put the U.S. and world “in a better position.”
It was not immediately clear if Alaskan officials were involved in discussions ahead of Trump’s announcement. When asked if Gov. Mike Dunleavy was aware of the potential deal, the Republican’s office told Daily on Energy, “Alaska is central to President Trump’s American energy dominance and critical minerals strategy. President Trump has not only been a vocal advocate supporting Alaska LNG and other resource development projects, but he is delivering on promises to unlock our state’s tremendous potential.”
SENATE ADVANCES PUSH TO OPEN UP ALASKA FOR DRILLING: The Senate voted in favor of walking back environmental protections in Alaska’s National Petroleum Reserve, getting the Trump administration one step closer to opening up nearly the entire region to drilling activities.
The details: In a 52-45 vote earlier this afternoon, the upper chamber voted to nullify the National Petroleum Reserve in Alaska Integrated Activity Plan Record of Decision issued by the Bureau of Land Management under former President Joe Biden.
As we detailed in yesterday’s Daily on Energy, the 2022 management plan blocked 11 million acres from being available to fossil fuel development. The plan did not completely remake guidelines for managing the NPR-A, instead reversing changes made during Trump’s first term.
Under Trump 1.0, the BLM opened up 82% of the reserve for oil and gas development.
It’s important to remember that a companion bill in the House, introduced by Republican Rep. Nick Begich, will still need to pass before Trump can sign the proposal nullifying the 2022 plan into law.
Read more from Callie here.
NUCLEAR STARTUP TO DEVELOP TEXAS DATA CENTER CAMPUS: Nuclear startup company Blue Energy has announced plans to develop a new natural gas and nuclear power plant in Texas that will be built alongside an artificial intelligence data center campus.
The details: The 1,600 acre campus will be located in Port of Victoria, roughly two hours southwest of Houston. Blue Energy is confident that it will be able to start pumping power to the nearby AI factories developed by Crusoe as soon as 2028, in a large part thanks to its use of natural gas as a bridge fuel.
Blue Energy has described its design as “the world’s first gas-to-nuclear conversion,” which will be generating nuclear power by 2031. Its nuclear reactors are expected to be light-water reactors.
“This partnership with AI infrastructure leader Crusoe marks a key milestone for Blue Energy as we work to meet rising global energy demand and, for the first time in the nuclear industry’s history, build a plant with cost and schedule certainty,” Jake Jurewicz, co-founder and CEO of Blue Energy, said in a statement.
DEMOCRATS PRESS TRUMP TO REVERSE PLANS FOR OFFSHORE LEASING: A group of Democrat lawmakers sent a letter to Trump and Interior Secretary Doug Burgum asking the administration to pull back from opening new offshore oil and gas leasing in the Atlantic and Pacific Ocean.
Democrat Sens. Alex Padilla of California and Cory Booker of New Jersey, along with Democrat Reps. Jared Huffman of California and Frank Pallone of New Jersey, sent the letter along with 100 lawmakers, warning Trump and Burgum that the leases would be a threat to coastal economies and national security.
Key quote: “The United States already leads the world in oil and gas production. The industry currently holds more than 2,000 offshore leases covering over 12 million acres of federal waters — yet fewer than 500 of those leases are actively producing oil and gas,” the lawmakers wrote. “There is no justification for opening vast swaths of our oceans to leasing when existing leases remain largely unused, while imposing mounting environmental and economic costs on coastal communities.”
The letter is in response to the White House considering leasing offshore drilling of federal waters in the East and West Coast.
Earlier this week, Bloomberg reported that the administration walked back its proposal to sell offshore oil and gas leases along the East Coast. However, the Interior Department could still consider sales of leases in the Gulf of Mexico and waters along the West Coast and Alaska.
RUSSIA CEDES TO U.S. OIL SANCTIONS: Russia’s second largest oil company, Lukoil, has reportedly agreed to sell its international assets after it was slammed by the latest round of sanctions from the Trump administration last week.
The details: Lukoil confirmed earlier today that the Moscow-headquartered company accepted an offer from Swiss commodities trader Gunvor to purchase Lukoil international, according to the Wall Street Journal.
Details about the value and timeline of the deal have not been released, but the firm reportedly said key terms have been agreed to by the two companies. One analyst with Russian brokerage Finam told the Financial Times that they estimated the total value of Lukoil’s international assets to be around $12 billion, but the sale was likely to feature a discount.
Lukoil did also confirm that the sale was prompted by the U.S. sanctions, which it described as “restrictive measures of some states introduced against the company and its subsidiaries.”
The deal is expected to include most of Lukoil’s operations that occur outside of Russia, including refineries, drilling operations, and gas stations located in Egypt, Azerbaijan, Uzbekistan, Iraq, and even the U.S.
Quick reminder: Last week, Trump introduced new sanctions on Russian energy majors Rosneft and Lukoil in the administration’s latest attempt to reduce the revenue Moscow earns for its war in Ukraine. At the time, Russia’s foreign ministry called the sanctions “entirely counterproductive.”
WORLD POWER DEMAND SOARING OVER NEXT 10 YEARS: Power demand worldwide will surge by around 30% over the next decade, thanks to the rapid build-out of data centers, continued push for electrification, and increased manufacturing, energy research firm Rystad Energy predicts in a new report.
The biggest drivers behind the growth in demand will be industrial sectors like iron and steel, closely followed by residential and transportation-related energy usage. Surprisingly, data centers are forecast to be one of the smallest growth areas, with Rystad Energy predicting their energy usage will only grow from 1.5% of global demand in 2025 to 3.5% in 2035.
Rystad Energy is predicting that oil demand will peak by the early 2030s, with growth of natural gas use also slowing down in the same time frame. For their analysts, this will make renewable energy resources like wind, solar and battery storage critical for meeting new demand. The report estimates that renewables will supply 55% of total electricity by 2035. This year, they make up around 34%.
Despite rollbacks seen in the U.S., the research firm remains confident that a global transition cleaner sources of fuel will prevail.
“Already today, we’re seeing the energy system shift to a hybrid model of renewable and fossil energy,” Rystad Energy founder and CEO Jarand Rystad said in a statement. “With half of global power generation capacity now renewable and one in four new cars sold being electric, the energy system is transforming rapidly.”
HURRICANE MELISSA UPDATE: Hurricane Melissa is heading toward Bermuda after causing widespread destruction in Jamaica and Cuba.
Jamaica has started recovery efforts, as 77% of the island remains without power. Kingston, the capital of Jamaica, recently opened its airport to bring in critical aid to the land. Jamaica was hit the hardest by Hurricane Melissa, which at the time was a Category 5 storm with winds up to 185 mph.
Fatalities are expected to climb throughout the recovery effort. The death toll across Haiti, Jamaica, and the Dominican Republic is at least 28.
The storm is expected to pass near Bermuda today or early Friday as a Category 2 or 1 hurricane, according to the Weather Channel.
ICYMI – TRUMP ORDERS U.S. TO RESUME NUCLEAR WEAPONS TESTING: Late last night, Trump ordered the Pentagon to begin testing nuclear weapons on an “equal basis” with China and Russia.
The move appears to signal the end of a 33-year period in which the U.S. has not tested a single nuclear weapon. The U.S. conducted its last nuclear testing in the early 1990s as part of Operation Julin, with the last test taking place on Sept. 23, 1992. The U.S. is signed on to the Comprehensive Nuclear-Test-Ban Treaty, alongside more than 150 countries, which bans all nuclear explosions.
Trump later told reporters on board Air Force One that the decision was driven by his observations that other nations are also conducting nuclear weapons testing.
“We don’t do testing. We’ve halted it years, many years ago. But with others doing testing, I think it’s appropriate that we do also,” Trump said.
The Arms Control Association estimates that no country, except for North Korea, has conducted a nuclear explosion test in the last 25 years.
It was not immediately clear what kind of weapons Trump was referring to in his post, whether they would be missile flights, explosive weapons, or nonexplosive tests. The uncertainty has sparked concern among several nuclear weapons experts.
“Trump is misinformed and out of touch. The U.S. has no technical, military, or political reason to resume nuclear explosive testing for the first time since 1992,” Daryl Kimball, director of the Arms Control Association, wrote in a post to X. “It would take least 36 months to resume contained nuclear tests underground at the former test site in Nevada.”
RUNDOWN
Canary Media Meet the coal miner who just started a geothermal drilling business
Washington Examiner Electric slide: Why Trump can’t afford to ignore rising prices
National Geographic Why hurricanes are getting more powerful—more quickly
