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WHAT’S HAPPENING TODAY: Good afternoon and happy Tuesday, Daily on Energy readers! We are watching Venezuela, where President Donald Trump said the U.S. would offer reimbursements to oil companies investing in the country 🇻🇪. As U.S.-Venezuelan developments unfold, gas prices are projected to fall under $3 this year – the lowest since 2020 ⛽. We have all the details below.
Welcome to Daily on Energy, written by Washington Examinerenergy 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 FLOATS REIMBURSING DRILLERS TO INVEST IN VENEZUELA: President Donald Trump has made it clear he wants to do everything in his power to revitalize the oil industry in Venezuela, even reimbursing U.S. companies for their investments.
The details: During an interview with NBC News, Trump said that the U.S. oil industry could expand its operations in less than 18 months. He claimed he believed it could be done in less time than that, but will cost “a lot of money.”
“A tremendous amount of money will have to be spent, and the oil companies will spend it, and then they’ll get reimbursed by us or through revenue,” Trump said.
Trump did not provide any estimates on how much he believed it would take to expand Venezuelan drilling, but many within the industry have warned that it will take tens of billions of dollars and several years to do so.
All the major oil and gas companies have avoided speaking publicly about whether they plan to expand existing or new operations in the country, though several executives are expected to meet with administration officials later this week – as we noted in yesterday’s newsletter.
Traders, however, have already dubbed most of these firms “winners” in the fallout of the capture of former Venezuelan dictator Nicolas Maduro with companies like Chevron, ExxonMobil, ConocoPhillips, and Valero seeing their stocks rise. You can read more from Callie and Joe on this here.
Key quote: “These are all the ingredients that companies need, especially when they’re making investments outside of the United States and in a less familiar political environment,” an oil and gas industry source told Callie. “All of the reasons why Venezuela was a very uncertain and riskier investment prospect for the industry are still the same today as they were before this development.”
PLUS…CANADA PROMISES TO STAY COMPETITIVE: As the prospect of increased crude from Venezuela grows, some analysts have predicted that the Canadian oil industry would be hurt, but America’s northern neighbor is now promising to stay in the field.
Earlier today, Prime Minister Mark Carney said Canadian oil can still be competitive for American and other foreign buyers as it is “clearly low risk” and at a low cost.
"That makes Canadian oil competitive for the medium and long term ... We welcome the prospect of greater prosperity in Venezuela, but we also see the competitiveness of Canadian oil," Carney said, according to Reuters.
He added that the country is looking to implement a new carbon capture project in Alberta to become even more attractive to buyers looking to meet certain climate commitments.
ANNUAL AVERAGE GAS PRICES FALL TO LOWEST IN SIX YEARS: American drivers continue to see relief at the pump, as the average cost of gasoline for 2026 is projected to be below $3, the lowest yearly average since 2020.
The details: Petroleum analysis company GasBuddy released its latest projections on Tuesday, estimating that the yearly average cost of gas will be $2.97 per gallon this year. This is 13 cents less than the 2025 average of $3.102. Overall, GasBuddy estimates that motorists will spend $11 billion less on gasoline this year compared to last.
The company warned that consumers could see a peak for prices in the spring, with gas reaching the low $3.20s as stations switch to summer gasoline. By June, however, prices should once again begin to decline. The lowest prices will be seen in the Southern and Gulf Coast regions, while California, the Northeast, and Chicago will see the highest costs.
Key quote: “It’s not a return to ultra-cheap fuel, but for the first time in a long time, the wind is clearly behind drivers’ backs,” Patrick De Haan, head of petroleum analysis at GasBuddy, said. “If the market avoids major surprises, sustained averages below $3 per gallon could become commonplace in the year ahead.”
FUSION STARTUP LOOKS TO AI FOR A BOOST: The largest private nuclear fusion company, Commonwealth Fusion Systems, is looking to artificial intelligence to accelerate its efforts to make fusion energy commercially available.
The details: The Bill Gates-backed startup announced this morning that it is teaming up with Nvidia and Siemens to develop a "digital twin" of Commonwealth Fusion Systems’ nuclear fusion machine that will use AI, data, and project management tools to speed up the production of fusion energy at large scale. This replica of the fusion machine will allow the startup to run simulations, test hypotheses, and compare experimental results.
The partnership was announced at the Consumer Electronics Show in Las Vegas, where CEO and co-founder Bob Mumgaard said the tech will “compress years of manual experimentation into weeks.”
"Through this collaboration, we're demonstrating how AI and integrated digital engineering can accelerate progress from design to grid power,” Mumgaard said. “This will allow us to transform how we build and operate fusion machines in the race to commercial fusion."
Quick reminder: Fusion energy is the type of power generation that replicates processes that fuel the sun and other stars, when two nuclei combine to create a nucleus. This alternative source of energy does not produce greenhouse gases, produces less radioactivity than nuclear fission, and is estimated to produce 10,000,000 times more energy per unit of fuel than traditional fossil fuels like coal. However, technology has yet to be developed to harness this energy at commercial scale.
BILLIONS GOING INTO NATURAL GAS INFRASTRUCTURE THIS YEAR: Energy Transfer, one of the largest midstream energy companies in the U.S., is planning to invest between $5 billion and $5.5 billion this year into natural gas pipeline projects, according to Reuters.
The investment comes as the firm previously announced that it would be shifting its priorities to support natural gas network projects, such as new and expanded pipelines, and away from liquefied natural gas production and exporting. This shift began in December, when Energy Transfer said it was suspending development of its Lake Charles LNG project.
On Tuesday, Energy Transfer reportedly said that it expects to see several natural gas pipelines projects accelerate or come online this year, according to Reuters. This includes projects related to its Nederland Flexport NGL, Mustang Draw I and Mustang Draw II processing plants in the Permian basin.
Energy Transfer owns and operates roughly 140,000 miles of pipeline in the U.S., spanning 44 states.
DOI AWARDS $5 MILLION FOR WILDFIRE RESPONSE: The Department of the Interior awarded $5.08 million to local governments to purchase slip-on tanker units to help quickly respond to wildfires.
The award is through the administration’s Slip-on Tanker Pilot Program, which helps local governments purchase slip-on tanker units. The units are portable firefighting systems that can be mounted on a truck or flatbed to function as a wildland fire engine.
DOI said local governments that provide emergency services to areas with a population of 50,000 or less are eligible to receive grants from $10,000 to $500,000. Awards were given to 97 local emergency response agencies in 26 states.
ARCTIC FREEZE IN EUROPE: An Arctic freeze has hit parts of Europe, bringing frigid temperatures and snowfall.
Temperatures dropped yesterday and today in northern and central Europe due to the significant cold snap. Bloomberg reported that temperatures in Marham, southeast England, fell to -12.5 degrees Celsius (9.5 degrees Fahrenheit). Then, temperatures in Mouthe, eastern France, and Oberstdorf, in the Bavarian Alps, dropped to -22 degrees Celsius or -7.6 degrees Fahrenheit.
Due to the frigid temperatures, power demand rose, and France ramped up its gas generators to meet the demand, hitting a five-year high, Bloomberg said. The publication said Germany's power demand has climbed to about 69 gigawatts, which is above the seasonal average of 63 gigawatts.
The snowfall has caused many travel delays, with flights and trains canceled and delayed. The airlines at Paris's main Charles de Gaulle airport have been ordered to cancel at least 40% of flights. Meanwhile, the Netherlands is expecting a blizzard to hit tomorrow, and the government has asked people to stay home.
ICYMI - TRUMP SUES CALIFORNIA CITIES OVER NATURAL GAS INFRASTRUCTURE AND APPLIANCE RESTRICTIONS: The Trump administration filed a lawsuit yesterday against two San Francisco-area cities, Morgan Hill and Petaluma, for ordinances that restrict natural gas infrastructure and appliances in new construction.
The administration filed a lawsuit in the U.S. District Court for the Northern District of California against the two cities for ordinances passed in 2019 that allegedly violated a 1975 law that prevents states and cities from regulating the "energy use" of products subject to federal standards, Reuters reported.
For several years, Democratic-run cities have imposed laws that would restrict natural gas hookups in new buildings to reduce greenhouse gas emissions. However, the Trump administration has sought to protect gas-powered appliances and to roll back energy efficiency standards for home and commercial appliances.
RUNDOWN
USA Today Inside Venezuela's rich oil and gold reserves: See maps and charts
Canary Media Is the US headed toward an electricity crisis of its own making?
New York Times Optimism About Nuclear Energy Is Rising Again. Will It Last?
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