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THE LATEST…US JOINS IN GLOBAL RELEASE OF OIL STOCKS: The U.S. and other major world economies will coordinate, through the International Energy Agency, the release of 60 million barrels of crude oil in an effort to lower prices.
Half the total amount, or 30 million barrels, will come from the U.S. Strategic Petroleum Reserve, the White House confirmed, while the rest will be supplied by allies in Europe and Asia.
It will be Biden’s second time tapping the SPR in as many years: It comes as world leaders seek to lessen the sticker shock for consumers, who have endured months of high gas prices and supply constraints. Prices for oil soared again this morning, with futures for Brent crude climbing to more than $100 a barrel.
In a statement, the White House said the coordinated IEA effort marked yet “another example of partners around the world” condemning Russia’s unprovoked invasion of Ukraine.
President Joe Biden “was clear from the beginning that all tools are on the table to protect American businesses and consumers, including from rising prices at the pump,” White House press secretary Jen Psaki said.
In addition, Psaki said, IEA members agreed to continue monitoring markets and will “consider further releases as necessary. “
“We are prepared to use every tool available to us to limit disruption to global energy supply as a result of President [Vladimir] Putin’s actions,” she said. “We will also continue our efforts to accelerate diversification of energy supplies away from Russia and to secure the world from Moscow’s weaponization of oil and gas.”
For context: Today’s announcement marks the first time IEA member states have coordinated oil stock release since the Libyan civil war more than a decade ago.
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BIDEN TEAM UNDER MORE PRESSURE TO CHAMPION OIL AND GAS: Oil and gas interests are calling on the Biden administration to “speak clearly and without equivocation” in support of U.S. energy production as the war in Ukraine makes prices more volatile across the globe.
American Petroleum Institute President and CEO Mike Sommers told Energy Secretary Jennifer Granholm the department should quickly approve all LNG applications and facilitate quicker environmental review of applications for other proposed energy infrastructure to enable domestic producers to help secure energy markets.
“The administration should speak clearly and without equivocation that the United States will be a reliable producer and supplier of oil and natural gas to our allies around the world both now and in the future,” Sommers wrote to Granholm in a letter made public this morning.
The campaign has been building especially stronger since Russia broke into Ukraine and sent already-high oil prices sailing above $100 per barrel.
Several other industry groups, including LNG Allies and the American Exploration and Production Council, wrote Biden Friday and asked him to embrace a “strategic asset” in America’s energy resources and to help build out more LNG export and import terminals here and in Europe.
Meanwhile, environmentalists have kept the pressure on in the other direction and with a measure of success, too, as we discussed yesterday. The Biden administration has declined to endorse the notion that a bigger, stronger oil and gas sector is the solution to the globe’s energy woes, although Biden has recognized LNG as a solution to Europe’s problems.
HARSH RHETORIC FROM MANCHIN ON DOMESTIC PRODUCTION: Senate Energy and Natural Resources Committee chairman Joe Manchin joined Republicans and the industry in criticizing the administration’s energy policies in light of Russia’s aggression, saying that they are “hypocritical.”
“While Americans decry what is happening in Ukraine, the United States continues to allow the import of more than half a million barrels per day of crude oil and other petroleum products from Russia during this time of war,” Manchin said in a statement late yesterday. “This makes no sense at all and represents a clear and present danger to our nation’s energy security.”
The “entire world is watching as Vladimir Putin uses energy as a weapon in an attempt to extort and coerce our European allies,” he said.
BIDEN’S TASK TONIGHT: Biden has a lot to accomplish in his State of the Union Address tonight. He must gin up enthusiasm for stalled legislative priorities, convey a sense of optimism about the nation’s recovery from the pandemic, and, not least of all, address the rise in gas prices caused by Russia’s assault on Ukraine — which Biden has warned will likely only get worse in the months ahead.
In previewing tonight’s speech, White House officials said Biden will seek to tout his administration’s economic achievements, passage of the bipartisan infrastructure bill, and historic investments in clean energy.
Expect Biden to focus heavily on environmental regulatory steps his administration has taken: He’ll tout those as well as the spending on clean energy projects funded by the infrastructure bill — such as lead pipe removal, construction of electric vehicle charging stations, reclamation of abandoned wells, and rare and critical earth mineral research.
Climate will also be a major theme: Biden will also have the opportunity to pitch a key legislative priority directly to the American people––his $2.4 trillion “Build Back Better” spending bill, which stalled in the Senate late last year following opposition from Manchin because of its cost.
In focusing on Build Back Better, Biden will seek to breathe new life into a bill that has for weeks been considered dead in the water, including highlighting the push for clean-energy tax credits included in the stalled legislation.
Russia’s invasion of Ukraine and the ongoing crisis in Kyiv will be a dominant focus of tonight’s speech. Speaking to reporters yesterday, Psaki said Biden’s remarks will detail the myriad ways his administration has sought to push back on Russian aggression and “rally the world” against the Kremlin.
Tonight’s speech comes as Biden’s approval ratings have soured slightly: In February, 55% of U.S. voters said they disapprove of Biden’s performance as president, compared to 44% who said they approve — down from his 60% favorable rating last summer, according to an AP-NORC poll.
BP AND SHELL TO DIVEST ASSETS IN RUSSIAN FIRMS: Oil supermajors BP and Shell are potentially losing billions of dollars by cutting ties with Russian oil firms as a consequence of the war in Ukraine, the Washington Examiner’s Zach Halaschak reports.
BP said it would give up its 19.75% stake in Rosneft. CEO Bernard Looney said the war “has caused us to fundamentally rethink BP’s position” with the company, and BP could reportedly see associated losses amount to $25 billion.
Shell also said it would cut ties with Russian firms and divest a 27.5% stake in the Sakhalin-II liquefied natural gas facility and its 50% stake in the Salym Petroleum Development and the Gydan energy venture.
Economic sanctions imposed by the West could make it difficult to sell the stakes, meaning the oil giants could simply end up abandoning them and thereby billions of dollars.
GERMAN GREEN MINISTER ON ‘WARMONGER’ RUSSIA: German vice chancellor and climate minster Robert Habeck signaled a further fracturing in his country’s relationship with Russia, calling it a “warmonger” and “not a reliable partner” yesterday when talking of energy trade between the two powers.
“Strengthening our energy sovereignty strengthens our security,” Habeck said yesterday. “Therefore, we must first overcome the high dependence on Russian imports of fossil fuels — a warmonger is not a reliable partner.”
Habeck was already opposed to the previous government’s decision to deepen Germany’s energy relationship with Russia via Nord Stream 2. But the “unreliable” and “warmonger” characterizations would seem escalatory, as Germany’s prevailing strategy to cut greenhouse gas emissions has been outlined as this: to retire more coal and burn more natural gas sourced from Russia en route to a mostly renewable energy future.
Having second thoughts: Habeck and Foreign Minister Annalena Baerbock both said burning more coal is now being reconsidered to cut ties with Russian gas in the face of war, Bloomberg reported. Baerbock said more coal use is “the price that we all have to pay for this war.”
Habeck also said “there are no taboos” when commenting on the prospect of extending the life of Germany’s remaining nuclear reactors, which are on course to be retired this year.
Remember: 1. Germany wants to phase coal out by 2030, and 2. It is one of a handful of EU countries with strong opposition to nuclear power across political factions.
EU ENERGY HEAD TALKS UKRAINE GRID SYNC AND NEXT LNG STEPS: EU Energy Commissioner Kadri Simson said ENTSO-E, Europe’s grid operators, will work to connect Ukraine’s grid to Europe’s “as quickly as possible” to keep electricity flowing in the face of Russia’s assault.
Ukraine had been doing exercises to test how its grid could perform in isolation when Russia began moving in, Simson said yesterday. Europe will now pursue emergency synchronization between grids, which is “something tangible we can do for our partners,” she said.
And on LNG: Commission President Ursula von der Leyen has said the EU is on much better footing when it comes to energy supplies than it was before it had worked out agreements to secure alternatives to Russian gas, although that was notably before Russia invaded Ukraine.
Simson also said yesterday the EU “can get through this winter safely” and credited increased LNG imports for helping improve matters. That said, the bloc’s energy diplomacy will continue, she said, and the Commission will establish “a platform and contact groups with relevant Member States and LNG operators.”
FORMER FERC MEMBERS WEIGH IN ON NEW PIPELINE POLICIES: Former Republican FERC Commissioner Bernie McNamee criticized the commission’s recent votes to adopt new policies governing its consideration of pipeline projects, saying the decisions to more rigorously account for a prospective project’s effects to climate change and to populations especially subject to pollution “are on shaky legal ground” and exceed FERC’s authority.
“They’ve decided that day three unelected bureaucrats — and you know, I used to call us that when we were on FERC — have decided that because Congress can’t pass a law that they’re going to seize the control,” McNamee said in a new episode of the the Washington Examiner’s Plugged In podcast, hosted by former FERC chairman Neil Chatterjee, which is out today.
McNamee said further he views the new approach as a means to limit pipeline approvals and force project developers’ hands to support environmental causes.
Democratic commissioners who voted in favor of the new policy statements worked to rebut the claim that the new policy statements are beyond FERC’s scope.
“There’s nothing remarkable, and certainly not radical, in taking environmental considerations into account while determining the public interest,” Democratic Commissioner Allison Clements said, according to Politico.
Chairman Richard Glick also urged critics, which include Senate Energy and Natural Resources Chairman Joe Manchin, to “take a deep breath” and told the publication, “This is not the end of the world.”
Senate ENR will take up FERC’s new project guidances in a hearing on Thursday.
The Rundown
EE News What the Russia crisis means for U.S. electricity mix
The New Yorker: The Youth Movement Trying to Revolutionize Climate Politics
Calendar
TUESDAY | MARCH 1
10:00 a.m. The Senate Energy and Natural Resources Committee will hear testimony on pending legislation, including the Department of Energy Science for the Future Act of 2022 (S. 3699), the Fission for the Future Act of 2021 (S. 3428), the Energy Emergency Leadership Act (H.R. 3119), and more.
TUESDAY | MARCH 1
9:00 p.m. President Joe Biden delivers his first State of the Union address at the U.S. Capitol. His speech is slated to begin at 9 p.m. ET –– find out how to watch or stream his remarks here.
WEDNESDAY | MARCH 2
10:00 a.m. 106 Dirksen The Senate Committee on Environment and Public Works will hold a hearing on the implementation of the Infrastructure Investment and Jobs Act featuring Transportation Secretary Pete Buttigieg.
THURSDAY | MARCH 3
10:00 am The Senate Energy and Natural Resources Committee will hold a hearing to review FERC’s recent guidance on permitting construction and operation of interstate natural gas pipelines and other natural gas infrastructure projects.
