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THE VIEW FROM LOUISIANA: Rep. Garret Graves, a Louisiana Republican, is warning gasoline shortages from Hurricane Ida are bound to get worse and is calling on the Biden administration to provide more relief.
Graves, in a call with me last night two days after surveying damage across the state by helicopter, said “there are really profound problems down here on gas,” and shared anecdotes of 45 minute wait lines at stations that do have gas, and people sleeping overnight waiting for new supply.
He predicted, “I don’t think everything is priced in yet,” as far as possible price spikes nationally.
“I don’t know if we have seen this thing play out,” Graves said.
Graves followed our call with a letter sent to Energy Secretary Jennifer Granholm and EPA Administrator Michael Regan, warning fuel shortages are likely to persist in Louisiana due a bevy of problems.
These include transmission lines falling across the Mississippi River and blocking maritime access to refineries, fuel-makers unable to produce because of power outages, gas stations lacking electricity to power pumps, and supply disruption from shut-in oil and gas output in the Gulf of Mexico.
He asked Biden administration officials to consider authorizing the release of crude oil from the nation’s emergency stockpile, the Strategic Petroleum Reserve, and to temporarily provide refiners relief from renewable fuel standard blending requirements.
At a press conference on Ida, President Joe Biden said this afternoon he has directed Granholm to use all tools at her disposal to keep gasoline flowing to pumps, including using the SPR. But the administration does not appear to have authorized an SPR release as of this writing.
Graves’ ringing of alarm bells is consistent with the tack taken this summer by Republicans, who have tried to blame Biden administration policies targeting fossil fuel production for rising gasoline prices. But it’s mostly been due to higher crude oil prices from the return of fuel demand as the world has started to recover from the pandemic.
State of play: The Interior Department reports that roughly 80% of Gulf of Mexico crude oil production and 83% of gas production was shut-in as of yesterday.
As of early this morning, 66% of gas stations in Baton Rouge were without fuel, and 65% in New Orleans, according to GasBuddy data.
The national average price of gasoline has jumped 5 cents per gallon, likely due to Ida’s impact, Patrick De Haan of GasBuddy told me. But he doesn’t expect much further increase, projecting another 5-10 cent rise in the “worst case.”
“I don’t see any national shortages,” De Haan added.
Zachary Rogers, an oil analyst at Rapidan Energy, told me he expects “upward pressure” on gasoline prices in the Gulf Coast and the East Coast markets over the next few weeks, given the refining outages in Louisiana.
He said RFS waivers as called for by Graves would be unhelpful, since the challenges in the gasoline market have nothing to do with ethanol-blending obligations, but advised that a Jones Act waiver would be more useful, allowing Houston barges to cheaply ship gasoline to the Louisiana coast.
De Haan said a SPR release of crude oil could also be necessary given the myriad challenges facing refiners that are getting back online with ports and the Mississippi River closed.
“If anything, the SPR could simply cut into the headache of getting refiners back online,” he added.
What Biden is doing: Biden has been sensitive to the specter of energy shortages as he has pushed his agenda to reduce fossil fuel use across the economy.
His administration issued Jones Act waivers to address the fallout of the Colonial Pipeline shutdown from a cyberattack in May.
Early this morning, the White House sent out a fact sheet documenting actions it has taken to “increase the availability of gasoline and ease price pressures,” including offering temporary flexibility to how many hours a truck driver can drive, and approving emergency fuel waivers for Louisiana and Mississippi, allowing them to bypass certain fuel requirements.
Biden travels to Louisiana tomorrow to meet with state and local leaders and tour storm damage.
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CHINA’S WARNING TO KERRY ON CLIMATE COOPERATION: China’s foreign minister, Wang Yi, swatted away the Biden administration’s appeals to make climate change a stand-alone issue between the two countries.
“The United States should stop regarding China as a threat and adversary,” Wang told U.S. climate envoy John Kerry yesterday, according to the Chinese foreign ministry, which translated a video chat between the two leaders.
Work between the two nations on climate change, Wang said, “cannot possibly be divorced” from other looming geopolitical tensions on issues such as human rights, intellectual property theft, and trade.
“The U.S. side hopes that climate cooperation can be an ‘oasis’ in China-U.S. relations, but if that ‘oasis’ is surrounded by desert, it will also become desertified sooner or later,” Wang added.
Kerry told Wang the U.S. remains committed to “cooperating with the world to tackle the climate crisis, which must be addressed with the seriousness and urgency that it demands,” the State Department said, according to the New York Times.
Kerry in meetings with China this week was expected to push the world’s top emitter to speed up phasing out use of coal at home and end financing for coal power overseas.
The U.S. is also pressing China to halt its emissions growth in the next few years, beating its current target of beginning to reduce emissions before 2030, and to strive for carbon neutrality earlier than its current goal of 2060.
LIBERAL GROUPS PRESS FOR NO GAS IN CEEP: A coalition of liberal environmental groups led by the Sunrise Movement and Oil Change International launched a campaign yesterday calling on Democrats to keep natural gas out of the “Clean Electricity Payment Program” that is the centerpiece climate policy of their planned reconciliation package.
The groups, also including Evergreen Action, Sierra Club, and more, say natural gas should not be counted as a clean power source as part of the program, which would pay utilities to generate electricity from clean sources with the end goal of having 80% clean power by 2030.
As part of the campaign, the groups created a website to track which members of Congress are supporting excluding gas from the definition of clean energy.
The groups say they plan to pressure lawmakers through “digital amplification”, Hill blasts, and local organizing efforts.
The House Energy and Commerce Committee is expected to hold a markup soon on their portion of the reconciliation bill containing the clean electricity payment program.
MEANWHILE…GAS PRODUCTION IN APPALACHIA SOARS: Climate activists have a lot more work to do if they want to see the end of natural gas. Appalachia just set a record for shale gas production, according to a note yesterday from the Energy Information Administration.
By itself, the shale formation in the Appalachian Basin that spans Pennsylvania, West Virginia, and Ohio was the world’s third largest gas producer in the first half of 2021, behind Russia and the rest of the U.S.
The region averaged 31.9 billion cubic feet per day of production during the first half of this year, the highest average for a six-month period since production began in 2008.
BIDEN’S NEW CLIMATE SCIENCE ADVISER: The White House Office of Science and Technology Policy announced the hiring yesterday of Phillip Duffy as climate science adviser.
Duffy was president and executive director of the Woodwell Climate Research Center, where he focused on understanding the socioeconomic consequences of climate change, and using that to inform societal decisions and policies, according to the White House.
In previous government roles, Duffy represented the U.S. government at the “approval sessions” for five U.N. IPCC reports.
“The recent prominence of extreme weather events reminds us that the need for science-based policies to address climate change has never been greater or more urgent,” Duffy said in a statement.
PUSH FOR STRONGER CORPORATE CLIMATE COMMITMENTS: Ceres, a group focusing on corporate sustainability, launched a new initiative today aimed at decarbonizing six of the highest-emitting sectors — electric power, food, oil and gas, steel, banking and transportation — which together are responsible for up to 80% of global emissions.
The Ceres Ambition 2030 initiative aims to encourage new, more ambitious commitments from companies aiming to cut emissions in these sectors, including often-overlooked “Scope 3” indirect emissions addressing the full supply chain.
Ceres aims to press banks to treat climate as a systemic financial risk, move electric power companies to shift away from fossil fuels, reshape food industries by reducing emissions from agriculture and deforestation, spur oil and gas companies to pivot into clean energy, accelerate the steel industry toward the use of zero-emission technologies, and drive the vehicle sector toward full electrification.
The Rundown
Associated Press Ida remnants dump ‘historic’ rain on New York and New Jersey, at least 9 killed
New York Times Lack of power hinders assessment of toxic pollution caused by Ida
Politico Ida churns up tension on infrastructure vs. climate change
Calendar
WEDNESDAY | SEP. 15
9:30 a.m. 406 Dirksen. The Senate Environment and Public Works Committee will hold a business meeting and hearing on EPA nominees.
