WHAT’S HAPPENING TODAY – AND A NOTE ABOUT THE NEWSLETTER SCHEDULE: Good afternoon and happy Friday, readers! What a week it has been. We hope you are looking forward to a restful holiday season, surrounded by friends and family. Daily on Energy will be suspended during the weeks of Christmas and New Year’s, so we will be back in your inbox Jan. 5 🎄🎆🎊! Don’t miss us too much.
In today’s newsletter, House lawmakers have requested that the Department of Defense utilize tools that could provide stability for the lithium sector as it explores opportunities in the Smackover Formation region. Keep reading to learn about the Treasury Department and IRS move to make it easier for taxpayers to claim carbon capture tax credits.
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.
QUOTE OF THE WEEK: Clean energy advocacy group American Clean Power confused Democrats and Republicans alike this week when it revoked its support for the SPEED Act after conservatives squeezed in a last-minute amendment.
“It’s super weird they pulled the endorsement,” a Democratic advocate closely involved in permitting discussions told E&E News. “Not one Democrat bought that. Republicans thought they were cowards. You can understand the thought process. But it’s like let’s pick the worst option.”
LAWMAKERS ASK PENTAGON TO CONSIDER TOOLS TO BOOST THE LITHIUM INDUSTRY: A group of House lawmakers is requesting that the Department of Defense consider utilizing the Defense Production Act to help provide stability for the lithium sector as it explores opportunities in Arkansas and Texas.
In a letter, exclusively obtained by Daily on Energy, Republican Reps. Bruce Westerman, Steve Womack, Rick Crawford of Arkansas, and Nathaniel Moran and Pat Fallon of Texas request that the Department of Defense, now referred to as the Department of War, consider using the Defense Production Act in the Smackover region for lithium development.
“The Smackover region in southwest Arkansas and east Texas offers a domestic alternative, possessing the highest-grade lithium brine resource in North America. As the U.S. Lithium industry evaluates opportunities to develop the region, the Department can employ tools such as the Defense Production Act Title III,” the letter reads. “This would provide domestic producers with the certainty to invest, while securing a stable, reliable supply of this strategic material for national defense.”
The Defense Production Act was invoked by Trump in March, allowing agencies, including the Defense Department, to use it to facilitate domestic production of critical minerals.
The Smackover region spans several Gulf states, including Arkansas, Louisiana, and Texas, and contains significant lithium resources. Lithium is used in defense applications like drones, missiles, and satellites.
Currently, the mining company Standard Lithium, along with the energy company Equinor, is seeking to embark on the South West Arkansas Project, which would be the region’s first lithium production.
In October, Republican Sens. Tom Cotton and John Boozman of Arkansas and John Cornyn of Texas sent a letter to Hegseth, asking the Department to consider using the DPA to send clear signals to the industry that it can invest in the region.
“This sends a clear signal to market participants that it’s worthwhile to invest in our domestic capacity, and by taking this necessary step, we could significantly reduce our dependence on Communist China for lithium,” the senators wrote.
China controls about 90% of the global supply of critical minerals and rare earths. The Trump administration has taken steps to expand the domestic supply chain of minerals to reduce its reliance on China.
IRS PROVIDES SAFE HARBOR FOR CARBON CAPTURE TAX CREDIT: The Treasury Department and IRS are moving to make it easier for taxpayers to claim the carbon capture tax credit, which some say was threatened by the Environmental Protection Agency’s plans to end the Greenhouse Gas Reporting Program.
The details: The IRS issued new guidance this morning, providing a safe harbor for determining eligibility for and the amount of the 45Q tax credit. The guidance details that if the EPA fails to launch its Greenhouse Gas Reporting tool by June 10, 2026, taxpayers can prepare and submit an annual report to a qualified independent engineer or geologist to still claim the credit.
“The engineer or geologist must then certify that the capture and disposal described in the annual report is in compliance with relevant greenhouse gas reporting program requirements as in effect on December 31, 2025, in the manner specified in today’s guidance,” the safe harbor reads.
Some background: The guidance comes in response to concerns from the fossil fuel industry over the EPA’s proposal to revoke the reporting requirements, as many oil and gas producers and ethanol producers rely on the reporting tools to claim the credit.
You can read more from Callie about these concerns from fossil fuel groups as well as Republican leaders here.
BIPARTISAN PROPOSAL TO FURTHER LIMIT EXECUTIVE BRANCH ON PERMITTING: Just when you thought you were done reading about permitting before the holidays! A bipartisan group of House lawmakers is still working to strengthen legislative language limiting the executive office’s ability to revoke and stall federal permits for certain energy projects.
The group of lawmakers, led by Democratic Rep. Scott Peters of California and Republican Rep. Gabe Evans of Colorado, introduced draft legislation called the Create Expedited Reviews to Transform American Infrastructure Now Act, or the CERTAIN Act.
The proposal is meant to streamline the federal permitting process by providing certainty that “lawfully issued permits” that are still in compliance are safeguarded from “political interference.” It would also provide specific deadlines, timelines, and milestones for federal agencies to speed the environmental review process and strengthen communication between agencies and project sponsors.
Additionally, the draft bill would provide transparency and accountability through the permitting process and encourage federal agencies to analyze and respond to workforce and technical needs.
Key quote: “It’s no secret that our surging energy demand is straining our grid and our wallets,” Peters said in a statement. “As we face the growing challenge of powering our nation’s future, we must act quickly and effectively. Our CERTAIN Act is the comprehensive solution we need—giving us the tools to tackle energy challenges head-on, without unnecessary delays, and ensuring we’re meeting the moment with urgency and responsibility.”
DRILL, BABY, DRILL UPDATE: The number of active drilling rigs is down once again, falling by six for the week.
Data released by Baker Hughes this afternoon reveals there are 542 active oil and gas drilling rigs in the U.S., 47 fewer than this time last year. Technically, roughly eight oil rigs were dropped during the week, while two miscellaneous rigs were added, bringing the net drop to six. Of the six that were taken offline, four were located onshore and two were located offshore.
The declining rig count comes just days after several oil and gas executives reported lower drilling and exploration activities for the end of the year in the latest quarterly Dallas Fed Survey.
You can find Callie’s report on the survey and executives’ attitudes on the drilling markets here.
Where prices stand: Both domestic and international crude benchmarks were slightly up compared to yesterday, but are still significantly down for the week.
Just before 2:30 p.m., Brent Crude toed the $60 per barrel line, rising by 1.07% to sell at $60.46 per barrel. West Texas Intermediate was also up by 0.89% and selling at $56.50 per barrel.
COLORADO FACES MORE POWER OUTAGES DUE TO HIGH WINDS: Parts of Colorado are facing another round of power outages this week due to extreme winds and high risk of fires.
Xcel Energy today said it has to shut down power to customers in Boulder, Clear Creek, Gilpin, Jefferson, Larimer, and Weld counties. The company said conditions are expected to improve toward the evening today, but high winds causing additional outages will persist beyond 10 p.m. tonight. It added that crew members will prepare to inspect power lines and restore service when it is safe to do so.
“Turning off the power is not a decision we take lightly, and we will strive to restore power as soon as it is safe to do so. We stress that some customers may experience extended outages lasting several hours to several days as crews work to restore power,” Xcel wrote today.
The National Weather Service issued a red flag warning this morning in the Boulder and Jefferson County foothills, which will see gusts of 80 to 100 mph. There will be sustained winds in the area of 45 to 55 mph.
EU DELAYS DEFORESTATION BAN: European Union countries have approved a deal to delay the bloc’s deforestation ban, which was set to go into effect in just a matter of days.
The details: Yesterday, the member states voted in favor of delaying the law by one year, punting the policy meant to ban the imports of products connected to forest degradation. The law was originally expected to go into effect in December of last year.
Some liberal members of the European Parliament previously claimed that delaying the deforestation ban would be a move to appease the Trump administration, which has repeatedly urged the EU to soften its climate and environmental regulations.
In case you forgot: The deforestation ban was first approved by the EU in June 2023 and is intended to reduce the number of products consumed in the region that contribute to deforestation, while also reducing carbon emissions. Once in effect, the law will prohibit products made from commodities such as coffee, palm oil, soy, cocoa, cattle, wood, and rubber that were imported from recently cleared forests or contributed to forest degradation.
ICYMI – ENERGY TRANSFER SUSPENDS LNG PROJECT: Texas-based oil and gas firm Energy Transfer is suspending the development of a liquefied natural gas facility in Louisiana, signalling a shift in the race to build out the county’s capacity to export LNG.
The details: Yesterday afternoon, Energy Transfer announced that it would be suspending development of its Lake Charles LNG project to shift its focus to building out natural gas pipeline infrastructure.
“Energy Transfer management has determined that its continued development of the project is not warranted by Energy Transfer but remains open to discussions with third parties who may have an interest in developing the project,” the company said in a statement.
Energy Transfer owns and operates roughly 140,000 miles of pipeline in the U.S., spanning 44 states. The oil and gas firm explained that protections to expand this network have “superior risk/return profiles” compared to the LNG export facility.
RUNDOWN
Washington Post New York realizes it cannot afford its green promises
Grist One word sums up climate politics in 2025: Greenlash
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