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TRUMP’S CHINA TRADE TRUCE GOOD FOR BOTH US AND IRAN OIL IMPORTS: U.S. oil exports stand to benefit from President Trump’s trade ceasefire with China, but it may also be sending a positive signal to Iran.

Dan Eberhart, a Trump donor and CEO of the oil services firm Canary, provided a detailed outline of his thoughts on the trade truce to the Washington Examiner, expressing relief for the positive step for the U.S. oil market.  

“Crude oil exports to China are very important to the US,” he said in an email. “China is the export market all oil producers want including the US, Saudi Arabia and Russia so the US did not want to harm the market for US oil as part of the trade war.”

The US and Iran tie: But the White House’s recognition of the importance of the oil market to the U.S. is also the reason Trump issued a waiver to China last month to continue to buy Iranian oil.

Why they need to buy: China had agreed to buy a significant amount of U.S. crude oil to feed their two giant refineries opening next year that will need 800,000 barrels of oil per day, Eberhart continued.

“Buying US crude is a hand in glove fit for these refineries’ demand and Trump’s longing to close the trade deficit,” he added.

Laying out the caveats: But Eberhart cautions that there are two reasons that the U.S. should temper its enthusiasm, which make final negotiations on trade crucial for U.S. oil.

First, China has been feverishly stockpiling crude oil as prices have fallen, which means lower demand for U.S. imports. Second, China doesn’t actually need the lighter, cleaner oil that the U.S. produces “as much as the U.S. sellers would like them to buy it,” Eberhart explained.

Nevertheless, there is a huge opportunity here that Trump should negotiate for in resolving the trade issues with the Asian powerhouse, where China directs its oil companies to purchase U.S. oil ahead of others in the queue.  

“I have always thought the easiest way to reduce the trade deficit with China that clearly irritates Trump is via selling them more oil,” Eberhart said. “China’s need for oil is huge and it can direct the state owned CNOC and SinoPec to purchase it. For China to increase imports via manufactured goods and agricultural commodities would be much more complex and take longer.”

MEANWHILE… STATE DEPARTMENT LOSES MOST OF ITS OIL ADVISERS: A State Department advisory panel on sanctions has cut loose a number of its long-time oil industry advisers, opting for more K-Street lawyers and think tanks.

Shell and the American Petroleum Institute are gone, leaving Chevron as the last standing company. The oil industry being sidelined comes at a crucial time when the U.S. is trying to keep sanctions on Iran’s oil exports strong, while not harming the global oil market where U.S. companies like Chevron operate. Read John’s full story here.

Welcome to Daily on Energy, compiled by Washington Examiner Energy and Environment Writers John Siciliano (@JohnDSiciliano) and Josh Siegel (@SiegelScribe). Email [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.  

TRUMP’S WEEKEND CLIMATE UPS AND DOWNS: The final language in a joint communique at the close of the G20 meeting in Argentina on Sunday reiterated Trump’s resolve to leave the Paris climate accord, which was seen as a small victory for the administration that saw support for the climate accord fraying.

A White House senior official told reporters that Paris was one of the last issues to be negotiated in the communique “because the countries who typically might agree couldn’t agree with each other.” What that means is that “you’re seeing a little bit of the coalition fraying,” the official noted.

“Countries like Turkey, like Saudi Arabia, like Russia, might be second-guessing some of that,” the official said. “And so that was actually the last issue to close.”

All other countries, with the exception of the U.S., said the Paris agreement is “irreversible,” according to the communique. The U.S. affirms its strong commitment to “energy access and security” by supporting all energy resources and technologies, while also protecting the environment, the G20 communique reads.

Not enough attention on UN climate meeting: Environmental groups say the focus on fossil fuels by the U.S. and the oil industry is undermining the goals of the United Nations climate conference in Poland that opens this week.

One big issue is that the climate conference is being sponsored by fossil fuel companies. Some groups say they expect to see a way forward for countries to support more renewable energy under the Paris deal — but “the choice of fossil fuel companies to sponsor the conference casts a long-shadow over such hopes,” said May Boeve, executive director of 350.org, a top proponent of a plan to switch to 100-percent renewable energy by mid-century.

The Paris deal laid out what countries would do to lower emissions, but the U.N. meeting in Poland that lasts until Dec. 14 will instruct countries on how they will actually do that while keeping each other accountable.

TRUMP’S GM THREATS PUT ELECTRIC VEHICLES AT RISK: Trump’s threats toward General Motors Co. over its move to shutter plants threaten to undermine the advancement of electric vehicles and stymie congressional efforts to help the industry.

“We are at a pretty critical point in the development and sales of electric vehicles,” Dylan Reed, head of congressional affairs for Advanced Energy Economy, told Josh. “Trump’s meddling could disrupt that.”

Tax credit under the gun: Trump’s threats to cut off GM’s subsidies have slowed momentum for a bipartisan push in Congress to reform the electric vehicle tax credit.

“The time has come for the tax credit to end,” Thomas Pyle, president of the American Energy Alliance, a pro-fossil fuels group, said in a statement. “We shouldn’t be giving handouts to wealthy individuals to offset the costs of their luxury vehicles.”

However, the electric vehicle credit does not have an expiration date, and a new tax extenders package introduced by House Republican tax-writers last week did not feature a provision to repeal the subsidy.

The electric vehicle industry, led by Tesla and GM, is calling for Congress to reform the $7,500-per-vehicle tax credit for electric and plug-in hybrid vehicles, primarily by lifting the individual manufacturer cap, and allowing the credit to be used into future years.

The credit, first introduced in 2009, is capped at 200,000 vehicles sold per automaker.

GM is close to using up its availability of the tax credit, while Tesla already has.

Read Josh’s full report, here.

RUSSIA’S PUTIN SAYS HE HAS DEAL WITH SAUDIS TO CUT OIL PRODUCTION AGAIN: Russian President Vladimir Putin said this weekend that he has reached an agreement with Saudi Arabia to renew a deal to cut oil production again next year to raise prices, after temporarily boosting their output this year to mollify Trump.

OPEC, led by largest producer Saudi Arabia, and non-OPEC countries, namely Russia, are expected to announce a formal output cut amount during a meeting Thursday and Friday in Vienna. Putin did not specify a specific number, but OPEC’s Economic Commission Board on Friday recommended a total output cut of 1.3 million barrels a day, the Wall Street Journal reported.

“We have an agreement to extend our deal,” Putin said Saturday after a meeting with Saudi Crown Prince Mohammed Bin Salman at the Group of 20 summit in Argentina, where the two leaders were seen warmly embracing in a viral photo.

Why OPEC and Russia want to act, despite Trump: Oil prices have fallen in recent weeks after Saudi Arabia and Russia began boosting output, partially in response to Trump.

Before recently raising oil output, OPEC and Russia had implemented an agreement to cut production for 18 months.

Now, the market is in a oversupply situation because of the severe reaction by Russia and the Saudis to cover for Iran losses, which did not materialize as feared.

Trump last month credited Saudi Arabia for bringing down oil prices, but encouraged the Kingdom to continue pumping. The Saudis appear poised to ignore his warnings this time, as the oil-dominant kingdom seeks to balance its budget.

QATAR TO LEAVE OPEC AFTER FEUDING WITH SAUDIS: Ahead of the Vienna meeting, Qatar said Monday it intends to leave OPEC after 57 years as part of the oil cartel.

Qatar does not produce much oil, and prefers to focus on its massive natural gas business, said the country’s Energy Minister Saad al-Kaabi.

Qatar is OPEC’s smallest Middle East oil producer, representing less than 2 percent of the group’s output, according to a research note Monday morning from Wood Mackenzie.

“The smaller nations of OPEC have a relatively quiet role in the group’s decision making and Qatar may also see that it has less to gain from its membership now that is not involved in the [Gulf Cooperation Council],” said Ann-Louise Hittle, vice president for oil analysis at WoodMackenzie.

The move comes after Saudi Arabia has led an economic blockade against Qatar because of allegations that it finances terrorism, which Qatar denies.

“Rather than being a reaction to the 18-month long regional blockade against it, Qatar’s withdrawal is more likely a result of its effort to focus on its place as one of the world’s leading gas producers,” said Hittle.

SHELL COMMITS TO SHORT-TERM CARBON EMISSIONS REDUCTION TARGETS: Oil and gas giant Shell on Monday announced it will set near-term carbon emissions goals for its products.

The move is a big step, because most oil and gas giants have set long-term carbon reduction targets, not shorter ones.

Shell laid out its plans in a joint statement with the shareholder group Climate Action 100+.

What Shell committed to: The company said it will start setting carbon emissions targets starting in 2020 for three or five year periods, all the way until 2050.

Shell has already pledged to cut emissions by 20 percent by 2035 and in half by 2050.

ZINKE ESCALATES FIGHT WITH GRIJALVA AHEAD OF INVESTIGATIONS: The relationship between Interior Secretary Ryan Zinke and Rep. Raul Grijalva, D-Ariz., who is set to lead the House Natural Resources Committee, is looking strained, to say the least, following Friday’s accusation from Zinke that Grijalva is an alcoholic.

What prompted the attack: Zinke was responding to an op-ed Grijalva wrote Friday calling on him to resign because of numerous ethics allegations investigations he is facing.

“The American people know who I’m here to serve, and they know in whose interests I’m acting,” Grijalva said in a statement responding to Zinke’s attack tweet. “They don’t know the same about Secretary Zinke.”

Check the record: Zinke, in his attack, is likely referring to a $48,000 settlement Grijalva approved in 2015 “to a woman who accused him of being frequently drunk and creating a hostile work environment,” a severance agreement that the Washington Times has reported on.

Grijalva later denied the allegations in the Arizona Daily Star, despite paying the severance.

Zinke, meanwhile, is facing his own troubles.

According to the Center for Western Priorities, as of October, there have been 18 probes launched or requested by members of Congress against Zinke, including investigations by the Office of Special Counsel and Interior’s inspector general.

RYAN ZINKE LAYS A GUILT TRIP ON CALIFORNIA: Zinke pushed California Friday to adopt President Trump’s forestry management recommendations by noting new federal data illustrating the carbon dioxide pollution California emitted this year as a result of massive wildfires.

The data released Friday showed that the California fires produced the equivalent in carbon emissions to one year of power plant electricity production.

“Proper management of our forests, to include small prescribed burns, mechanical thinning, and other techniques, will improve forest health and reduce the risk of wildfires, while also helping curb the carbon emissions,” Zinke said in a statement.

MEXICO’S NEW PRESIDENT ATTACKS ENERGY REFORMS UPON TAKING OFFICE: Mexico’s new leftist president Andres Manuel Lopez Obrador attacked the country’s energy reforms upon taking office Saturday, re-upping campaign rhetoric.

Lopez Obrador said breaking state-owned Pemex’s monopoly had not resulted in savings for Mexicans, and that foreign investment in oil and gas has been less than expected.

“They told us it was going to save us but it has only meant the fall in oil production and the excessive increase in gasoline, diesel, gas and electricity prices,” he said in Spanish during a speech in Mexico City, according to Argus Media, which was attended by Energy Secretary Rick Perry.

Lopez Obrador also pledged to build a new refinery, and repair six existing refineries.

However, he said his government would honor existing contracts.

RUNDOWN

Washington Post ‘Just a lot of alarmism’: Trump’s skepticism of climate science is echoed across GOP

New York Times In the blink of an eye, a hunt for oil begins in ANWR

The Guardian The ‘climate diaspora’ trying to save the Paris agreement from Trump

Reuters The truth about ‘clean’ coal

Bloomberg A coal mine is devouring a 12,000 year-old forest

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