Daily on Energy: Gallego tries to cook with heat in Arizona

Arizona reached a high of roughly 111 degrees fahrenheit on Thursday – and Phoenix breached national records of having the hottest month ever recorded in a U.S. city this past July. With unprecedented temperatures set against a national dialogue on climate change, the issue of heat is starting to gain national attention – and factor into the Arizona Senate race.

Rep. Ruben Gallego, a Democrat representing Arizona, has been at the forefront of the fight against the heat. In the last few months, he introduced a number of heat-related bills alongside his colleagues – one bipartisan measure that would add extreme heat to the Federal Emergency Management Agency’s list of qualifying events for aid, another that would create a grant program to provide funding to combat excess urban heat, and another reintroduced bill that would allocate $100 million to address the health risks of extreme heat. Gallego also joined a letter with more than 110 other lawmakers to call on the Occupational Health and Health Administration to implement a federal workplace heat standard, following the news of Texas Gov. Greg Abbott approving a law that would override local ordinances mandating water breaks for construction workers.

“Far too many people are dying or falling ill from these extreme temperatures,” Gallego said in a statement to the Washington Examiner. “We need a swift deployment of federal resources to support our local elected leaders who are on the frontlines of this crisis, and that requires FEMA declaring extreme heat an emergency.”

Gallego is also pairing up with some surprising characters in the efforts to fight heat. Sen. Kyrsten Sinema, an independent whose seat Gallego is aiming for, also reintroduced the Heat Illness and Death Acts over on the Senate side, along with Democratic Sens. Ed Markey of Massachusetts and Alex Padilla of California. And he’s teaming up with his ex-wife – Phoenix Mayor Kate Gallego – to push for extreme heat to be listed as a declared disaster on FEMA’s list.

“Our intense heat wave this summer is proof that this change is direly needed in order to save more lives,” said the Phoenix mayor. “I am grateful to Congressman Gallego and his colleagues across the aisle for introducing legislation that would alter the FEMA declarations list, in turn making available additional resources from pop-up shelters to backup generation, all of which could help us successfully navigate unforgiving summers.”

Why this matters: Heat waves are hitting a number of states like Texas, California, and Florida – but Arizona’s been hit the hardest, with some of the highest temperatures in the country. An additional 14 heat-related deaths were recorded in Maricopa County over the past week, raising the number of heat deaths to 39, with 312 in the county still being investigated.

The political rundown: Recent polls have Gallego leading Sinema in most of the three-way races that also feature a Republican challenger – and the Arizona Independent is being outraised by her Democratic challenger, by a nearly two-to-one margin. Sinema has also not announced yet whether she would run for reelection – but has stockpiled nearly $10.8 million in her bank account, as of last month. With heat being the top issue in the state as of right now, it’s likely to play a special role in the Arizona Senate elections – and the state could likely determine which party takes control of the upper chamber.

Welcome to Daily on Energy, written by Washington Examiner Energy and Environment Writers Breanne Deppisch (@breanne_dep) and Nancy Vu (@NancyVu99). Email [email protected] or [email protected] 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.

OIL RISES ON NEWS OF EXTENDED SAUDI AND RUSSIAN SUPPLY CUTS: Oil prices were slated to see their sixth straight week of gains today, on the backs of voluntary supply cut extensions announced yesterday by Saudi Arabia and Russia.

News of the extended cuts—which amount to a combined 1.3 million bpd—sent futures for international benchmark Brent crude rising to $85.47 per barrel by mid-morning, a 33-cent rise from the previous day. Meanwhile, futures for U.S.-based West Texas Intermediate climbed by 30 cents, up to $81.85.

Oil prices have increased by more than 14% in July, the largest monthly gain since January 2022, amid tightening markets and expected demand growth for the second half of the year.

…Meanwhile, OPEC+ announced it will keep production unchanged: Leaders from the group said today that they have decided to hold output steady at current levels, a decision they agreed to after voluntary production cuts from Saudi Arabia and Russia pushed prices higher.

“The committee will continue to closely assess market conditions,” OPEC said in a statement following the Joint Ministerial Monitoring Committee meeting, which was held virtually. Members added that they can call for a full meeting with members if warranted.

BLM PROPOSES TO END NEW OIL LEASES ON 1.6 MILLION COLORADO ACRES: The Bureau of Land Management is proposing the removal of more than one million acres of public land in Colorado for future oil and gas leasing, and is seeking to protect tens of thousands of acres of new protected lands in the state, according to a new draft supplemental environmental impact statement and draft resource management plan.

According to the draft resource management plan, BLM is proposing nine formal “Areas of Critical Environmental Concern,” or ACES, on more than 100,000 acres of public lands overseen by BLM.

BLM is also proposing to ban oil and gas industry access to lands with “no-known,” or “low or medium” potential for oil drilling, or acres that are otherwise valuable for conservation, wildlife, or wilderness purposes.

But, as noted by E&E News, this would mean closing roughly 80% of lands managed by the Colorado River Valley Field Office to oil leasing, and 81% of lands in the decision area managed by the Grand Junction Field Office. Read more on the proposed revisions here.

…BIGGER PICTURE: The effort comes as a BLM’s proposed public lands rule, which would allow the agency to lease federal lands for conservation and restoration purposes, has come under fire by a group of Western states, who argued in June that the agency’s proposed rule is a “flagrant violation” of federal law, and threatens substantial harm to their respective economies, including to energy, mining, and agricultural interests operating on the lands. States are already in preliminary talks to challenge the rule if it becomes law, as Breanne reported earlier this summer.

Ultimately, more than 170,000 industry groups and other voices weighed in during the public comment period that ended in June, and if finalized, the rule is almost certain to be challenged in court.

DOE LOWERS PROJECTED SAVINGS FROM PROPOSED GAS STOVE RULE: The Biden administration lowered its estimate for how much consumers will save under its gas stove energy efficiency rule this week by 30%, sparking criticism from industry voices.

The Department of Energy made the change in a filing to its “Energy Policy and Conservation Program,” or the proposed rulemaking that would allow it to set new efficiency standards for consumer conventional cooking products, including gas stoves.

Originally, DOE estimated the rule, which would make roughly half of current U.S. stove models ineligible for repurchase in stores if it was to take force today, would save U.S. consumers up to $1.7 billion in costs, and roughly 13 cents per month.

Now it says consumer savings would be about 9 cents per month.

The Association of Home Appliance Manufacturers, or AHAM, said in a new statement that the “extremely stringent standard” DOE proposed would force consumers to lose important features and access to many gas stove models on the market, in exchange for saving only “pennies” each month.

…Bigger picture: The update comes less than a month after House Republicans blasted DOE’s proposed stove efficiency rules as a violation of its authorities under the Energy Policy and Conservation Act, or the federal program established in 1979 that directed the DOE to establish energy conservation standards for consumer products.

Rep. Pat Fallon (R-TX), said the gas stove rule “presents alarming violations” of the law and of expert witnesses who testified earlier this year before the committee, adding that the rule overall “is not a sincere attempt to improve efficiency.” And DOE is almost certain to face more of these accusations from House Republicans after they return from August recess.

GREENPEACE: CHINA’S ENERGY SECURITY PUSH DRIVES UP FOSSIL FUEL APPROVALS: As China ramps up its energy production, its focus on domestic manufacturing and its continued reliance on coal has put its climate commitments at risk, according to new research from Greenpeace.

According to Greenpeace, China approved more than 50 GW of new coal power in the first six months of 2023, threatening Chinese President Xi Jinping’s pledge to start reducing his country’s coal use over the 2026-2030 period.

And recent extreme heat conditions and drought have cut into its hydropower production and further deepened the country’s reliance on coal, the study found.

Coal output in China surged by a whopping 9% last year to 4.5 billion tons—more than 50% of the world’s total—and continued to climb further this year to help offset a more than 22% reduction in hydropower generation in the first six months of 2023.

“China’s government has put energy security and energy transition at odds with one another,” Gao Yuhe, the lead author of the Greenpeace research, told Reuters. Read more on the study here.

ESG FALLING OUT OF FAVOR, ACCORDING TO SURVEY: It’s not looking good for ESG, according to a recent Bloomberg industry survey conducted among its terminal clients, with a number of clients expecting ESG funds to underperform general market benchmarks.

Bloomberg recently held its second survey among terminal clients to get their views about environmental, social and governance principles. A number of clients who were “not directly engaged” in ESG are becoming more skeptical about the investment strategy than those “who are engaged.”

Even those that are engaged with ESG – an estimated 55% of 181 terminal clients– are also reportedly pessimistic about the sector, even within having more skin in the game.

Almost 70% of those who weren’t involved in ESG say that the investment strategy is nothing more than a fad, while just 18% of those who are engaged expect ESG issues to become more critical in business and markets, down from 25% in the earlier survey.

Some background: Back in July, House Republicans called for quashing the Securities and Exchange Commission’s efforts to enforce more transparent corporate-disclosure requirements of ESG-related factors. GOP lawmakers have also been pushing for stricter oversight of proxy-advisory firms and also favor limiting – or even excluding – ESG-focused investments from the Employee Retirement Income Security Act (ERISA) funds.

ON AN ESG RELATED NOTE: BlackRock executives are touting their third-party voting policies that allow investors to vote in specific corporate affairs, in a Wall Street Journal op-ed published yesterday. The opinion piece comes as Republican lawmakers have launched efforts against ESG investing, assailing the sector as “woke” capitalism that prioritizes liberal goals over investor returns.

Last month, the world’s largest asset management launched a pilot program that offers choices to individual investors in their exchange traded fund – and would allow individual investors to select from different policies to decide how their share of the ETF will vote on the companies they own.

BlackRock distanced themselves from the GOP’s criticisms, arguing that their clients’ financial interests are what’s “paramount.”

“For BlackRock, it’s about financial value, not social or political values,” the op-ed reads. “On proxy voting, our clients’ financial interests are paramount. BlackRock makes its decisions independently, informed by company disclosures, engagement with management, and proprietary and third-party research.”

HOUSE DEMOCRATS BACK CUELLAR IN REELECTION BID: House Democrats have rallied behind Rep. Henry Cuellar, the Texan who is one of the party’s most vocal supporters of oil and gas interests, as he seeks reelection.

House Minority Leader Hakeem Jeffries praised Cuellar in a statement as an “accomplished advocate for the people of South Texas,” and noted his “unwavering support” helping push key legislative priorities, including the Bipartisan Infrastructure Law and the Inflation Reduction Act, across the finish line in the chamber.

Other prominent Democrats have also endorsed Cuellar for reelection, including current party whip Katherine Clark, as well as Nancy Pelosi, Steny Hoyer, and other major names.

Their endorsement is a sharp reversal from the 2022 primary election, when Cuellar narrowly beat out the more progressive Jessica Cisneros. Cuellar also provoked ire from some in the party just months ago when he voted in March to support the sweeping GOP energy bill, H.R. 1, becoming just one of two Democrats to do so.

TERRESTRIAL AND WESTINGHOUSE SIGN CONTRACT FOR GOVERNMENT-BACKED IMSR FUEL PLANT: Terrestrial Energy signed a manufacturing and supply contract with Westinghouse for the design and construction of an Integral Molten Salt Reactor, or IMSR, fuel pilot plant in the UK that uses molten salt reactor technology to power nuclear reactors.

The contract, supported in part by $3.8 million in UK government funds, is aimed at delivering a “pilot plant” in advance of a scaled-up fleet of IMSR plants slated to open in the UK in the 2030s.

Springfields Fuels Limited, a subsidiary of Westinghouse, has a reactor fuel manufacturing site in the UK with “extensive” existing infrastructure available to support fuel supply for IMSR development, as well as its eventual fleet, Terrestrial said in a statement.

The IMSR plant uses new, high-temperature fission technology, known as “Generation IV technology” for nuclear energy, and relies on conventional nuclear reactor fuel—or Standard Assay Low Enriched Uranium (LEU)—for operations. LEU fuel is the only fuel available and transportable for civilian reactor use today, and has international regulatory acceptance following a multi-year review from the Canadian Nuclear Safety Commission.

“Our commercial strategy for IMSR is to use existing nuclear industrial infrastructure, materials, skills and capabilities to the greatest extent in the operation of the IMSR plant,” Terrestrial CEO Simon Irish said in a statement.

The Rundown

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