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RIVIAN FIGHTING DEALERSHIP RULES IN MISSISSIPPI: A bill that would prohibit electric vehicle manufacturers from selling their cars directly to consumers has cleared both the Mississippi House and Senate, in what opponents argue is a protectionist effort that would interfere in free markets and prohibit their investments in the state.
House Bill 401, which cleared the Mississippi Senate last week and now heads to the desk of Gov. Tate Reeves, is the most advanced current state effort to restrict EV maker sales. The bill would require automakers to sell their vehicles through traditional car dealerships or franchises, rather than operating direct-to-consumer physical locations — a restriction in direct conflict with the business models used by Tesla, Lucid, and Rivian.
Reeves has not said publicly whether he plans to sign the bill, though a final decision could come as early as this week. (A spokesperson for the governor did not respond to the Washington Examiner’s request for comment.) Supporters of the bill say it would level the playing field and ensure all automakers play by the same rules.
Rivian has lobbied against the bill and has said it will not switch to a franchise model if the law is passed. Thus, customers in the state “will just have to go without a physical presence, and it’s to their own detriment,” Rivian’s senior policy adviser, Beau Whiteman, said in testimony earlier this year.
Global companies like Tesla and Rivian are not going to change their business strategy for what is in effect 1% of the American population, Joey Fillingane, a Mississippi state senator, said last week during debate on the Senate floor.
According to data from the National Automobiles Dealers Association compiled by the Electrification Coalition, states that are open for direct sales saw an 80% increase in their sales revenue between 2012 to 2021, while closed states only saw a 61% increase.
Dealer employment also saw a lag in closed states during that time, increasing by just 6.5% versus 11% in open states.
Another feature of the direct sales model is cost transparency, which supporters say helps level out prices for buyers across the country.
“This bill takes Mississippi in the wrong direction on consumer choice and free-market values. Blocking EV-only manufacturers from investing in the state creates unhelpful restrictions for car buyers, and limits opportunities by preventing investments that will create good-paying jobs in automotive technology,” a spokesperson for Rivian’s public policy team told Breanne.
This morning, the Mississippi Freedom Caucus urged members to call on Reeves to veto the bill, describing it as “anti-free market, anti-conservative,” and in “complete opposition” with what it views as the state’s Republican Party platform.
This is a long running debate: Of note, Tesla is now headquartered in Texas and has plans for major expansion in the state but cannot sell its cars to customers at physical dealerships in the state. Legislative efforts to allow Tesla dealerships have failed to gain traction.
Welcome to Daily on Energy, written by Washington Examiner Energy and Environment Writers Jeremy Beaman (@jeremywbeaman) and Breanne Deppisch (@breanne_dep). 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.
MAJOR UPDATE: US INTELLIGENCE SUGGESTS PRO-UKRAINIAN GROUP CARRIED OUT NORD STREAM BLASTS: New intelligence reviewed by U.S. intelligence agencies reportedly indicates that a pro-Ukrainian group was behind the attacks on the Nord Stream natural gas pipelines last year.
The U.S. officials said they do not have evidence that the group was tied to Ukrainian President Volodymyr Zelensky, or that the perpetrators were acting on the orders of any Ukrainian government officials, the New York Times reported.
The intelligence officials told NYT they believe the group included Ukrainian or Russian nationals, or some combination of the two. No U.S. or British nationals were involved.
KREMLIN ‘DOES NOT RECOGNIZE’ G7-BACKED OIL PRICE CAP: A spokesman for the Kremlin said today that Russia does not recognize the G7-backed price cap on its oil exports, directly contradicting U.S. Energy Envoy Amos Hochstein, who praised the cap as “working well” in achieving its intended effect of limiting Russia’s fossil fuel revenue.
“I think the beauty of the process is that it is working and that Russian oil and Russian products are being traded below the price cap,” Hochstein said yesterday.
“We do not and will not recognise any cap,” Kremlin spokesman Dmitry Peskov said in response. “We are working so that this system does not harm our own interests.”
The exchange comes as tracking data shows Russia continues to ship its oil via a network of unregistered “shadow tankers” and by using ship-to-ship transfers as a means of getting around the price cap and skirting Western sanctions. Bloomberg reported yesterday that Russia appears to be transferring large volumes of its crude to vessels in the Spanish port of Ceuta and off the coast of Greece.
RELATED – ESTONIAN LEADER SAYS EU SHOULD CUT RUSSIAN OIL PRICE CAP IN HALF: Estonian Foreign Minister Reinsalu said yesterday that the West should halve its $60 Russian oil price cap to further squeeze Moscow’s war revenue as it continues to ship its oil beyond the reach of Western sanctions.
Cutting the cap to $30 per barrel would be “the proper direction,” said Reinsalu, whose country has committed 1% of its GDP to fund Ukraine’s military—the highest contribution of any national economy relative to its size.
Reinsalu also urged the EU to crack down on Russia’s sanctions-evading methods, such as its unregistered “shadow tankers” and the ship-to-ship transfers that allow it to sell oil higher than the capped price.
Any change to the price cap requires approval from the U.S. and other G-7 countries, however, some of which have expressed concerns that any further price reduction could cause Russia to take its oil off the market, causing a global supply shortage and severe price pain.
IOWA AND NEBRASKA ATTORNEYS GENERAL TO SUE EPA ON DELAYED E15 RULE: The attorneys general of Iowa and Nebraska notified EPA Administrator Michael Regan yesterday that they plan to sue the agency over its delay on the proposed rule to make year-round E15 sales permanent in their states.
In their request, the attorneys general asked Regan to either change the date of the rule to 2023 rather than 2024. “EPA’s finding elides an uncomfortable fact — for much of the year, the infrastructure EPA frets will struggle to comply with the waiver handles gasoline at the RVP levels the waiver will allow,” the letter said.
CHEVRON CEO: NATURAL GAS MARKETS ‘FUNDAMENTALLY CHANGED’ BY WAR: Russia’s war in Ukraine has “fundamentally” changed the natural gas market and global supplies in the long-term, Chevron CEO Mike Wirth said in Houston yesterday.
“There’s not a lot of swing capacity, there’s not a lot of inventory capacity,” Wirth said at the CERAWeek conference, which he said underscores the challenges and risks of transitioning too quickly to a low-carbon energy industry.
A disorderly transition could be “painful and chaotic,” he said.
“We have to be very careful about turning system A off prematurely and depending on a system that doesn’t yet exist and hasn’t been proven,” Wirth added.
U.S. REGULATORS WEIGH FREEPORT LNG’S REQUEST FOR A FULL RESTART: U.S. regulators sent Freeport LNG another list of questions yesterday as they continue to evaluate its request to restart full commercial operations at its Texas facility that was knocked offline following an explosion last June.
In its request, FERC and the U.S. Pipeline and Hazardous Materials Safety Administration asked for details on the status of Freeport’s hiring efforts to address “operator fatigue” that helped contribute to last year’s explosion
U.S. natural gas futures plunged by roughly 12% yesterday amid forecasts for more mild weather and lower-than-expected heating demand.
HOCHSTEIN RECONCILES CLIMATE PUSH WITH OIL NEEDS: Amos Hochstein sought to reconcile the administration’s intent to enable a phasing out of fossil fuels over the long term with Biden’s demand for more production.
Hochstein, who is helping to lead the administration’s energy task force with Europe, said the administration is committed to displacing oil demand over time but that the economy “can’t afford” lower levels as things stand.
“How can you tell us that you want us out of business, ultimately, and you’re asking us to produce more?” Hochstein said yesterday at CERAWeek, summarizing what he’s hearing from oil and gas companies. “And the answer is, we don’t see a conflict.”
“We do want to eventually — we want to see a reduction in demand for oil, but we can’t afford that right now,” he added.
Industry executives, in remarks throughout the conference, have been talking up their intent to increase production and welcomed Biden’s invitation.
Biden wants low energy prices, jobs, and investment at home, John Hess, CEO of Hess Corporation, said this morning.
“Oil and gas check all three boxes,” he said.
PODESTA PROMISES ELECTRIC VEHICLE CREDIT GUIDANCE BY END OF MARCH: The Treasury Department will make its self-imposed March deadline to publish guidance on the Inflation Reduction Act’s consumer clean vehicle tax credit, John Podesta said yesterday during remarks at CERAWeek by S&P Global in Houston.
“We have statutory deadlines. We have missed one,” he said of the 30D clean vehicle credit. “I pledge to you it will be done in March.”
The delayed guidance for the “very, very complex” credit (Podesta’s words) is the source of immense frustration for Sen. Joe Manchin, who shaped the tax credit to include the domestic sourcing requirements for battery components and minerals.
The Treasury Department, in a series of notices released in December, pointed to language in the IRA providing that the requirements don’t go into effect until it issues guidance.
“Nice to hear him finally say it,” one source close to Manchin said of Podesta’s comments about missing the deadline.
Expectations are the guidance will come on the last day of March, the source told Jeremy.
GREEN COALITION SUES TO STOP GULF LEASE SALE REVIVAL: Environmental groups filed suit yesterday to block Lease Sale 259, one of the previously canceled offshore oil and gas lease sales revived by the Inflation Reduction Act.
The complaint argues the Bureau of Ocean Energy Management performed faulty environmental analysis and failed to weigh alternatives to its ultimate decision to offer 73.3 million acres in the Gulf of Mexico lease sale, which is scheduled to be held on March 29.
BOEM violated NEPA “by failing to consider reasonable scaled-back alternatives to its proposed action” and by failing to “reasonably respond” to public comments before issuing its record of decision.
They’ve won on this before: Green groups, including some who joined this suit against 259, such as Friends of the Earth, have succeeded on similar grounds recently. Judge Rudolph Contreras of the U.S. District Court for the District of Columbia vacated the record of decision underpinning Lease Sale 257, the Gulf of Mexico lease sale held in November 2021.
Plaintiffs filed their suit yesterday against 259 in the same court.
This time it’s different: The Inflation Reduction Act ordered BOEM to hold 259 and other lease sales, including one in Alaska’s Cook Inlet, by specified dates.
An attempt to block the Cook Inlet lease sale back in December failed, and plaintiffs are faced with overcoming explicit directions from Congress that BOEM must advance the lease sales.
CORRECTION: A previous version of this newsletter incorrectly attributed comments from Mississippi state Sen. Joey Fillingane to Beau Whiteman. It also attributed auto sales data to the National Automobiles Dealers Association but inappropriately omitted that the data was compiled by the Electrification Coalition. Daily on Energy regrets the errors.
The Rundown
New York Times Rail heat sensors, under scrutiny in Ohio crash, face few regulations
Reuters Biden’s clean energy factory jobs may elude U.S. union workers
Calendar
TUESDAY | MARCH 7
2:30 p.m. 406 Dirksen. The Senate Environment and Public Works Subcommittee on Clean Air and Nuclear Safety will hold a hearing on legislation that would require cryptocurrency companies to disclose environmental impacts of their crypto-asset mining operations.
THURSDAY | MARCH 9
10 a.m. 406 Dirksen. The Senate Environment and Public Works Committee will hold a hearing to examine efforts to protect public health and the environment in the wake of the East Palestine train derailment and chemical release. Details and witnesses are expected to be announced in the coming days.
