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IT’S NOT EASY BEING GREEN: High and rising costs for oil are compounding the price of gasoline to record national averages, and the pressure is on President Joe Biden to bring short term relief by encouraging more extraction of fossil fuels.
But Biden’s key green constituencies are campaigning hard for the opposite approach, with some asserting his reputation as a climate change leader is on the line.
Environmentalists and other green proponents favoring a quicker shift away from fossil fuels are lobbying the Biden administration to meet this high-price moment with more wind, solar, and other lower-emitting energy technologies instead of encouraging more oil and gas production.
“The position of ‘I need to just drill more’ is like somebody who got drunk the night before, threw up, and decided the way to fix it is to have a Bloody Mary,” Nat Kreamer, CEO of the green energy industry group Advanced Energy Economy, told Jeremy.
Kreamer, who did four Special Forces tours in Afghanistan and helped found solar firm Sunrun after duty, said his position was formed partly by witnessing consequences of wars in the Middle East where enemies were “financed by petro dollars.”
He argued, as have many others who share his perspective, that the volatility we are seeing in prices for oil, gasoline, and in markets generally is inherent in fuel commodities, making stronger the case for shirking them in favor of deploying more alternatives sources.
For national security’s sake: Kreamer said further that there are special risks for the West in trading one fossil fuel source for a competitor produced elsewhere as Republicans, oil and gas industry groups, and European leaders, too, have proposed doing to replace the EU’s Russian natural gas supplies with LNG from allied nations.
“An LNG tanker going across the North Atlantic to Germany, which is — that’s going to be their quick answer… One Kilo-class Russian submarine, it doesn’t take much for them to take a billion-dollar tanker and blow it up,” Kreamer said. “When you have clean energy technologies, they’re by definition distributed in many cases. They’re resilient.”
Recalling the campaign: Others have been pointing back to Biden’s promises on the campaign trail to put an end to new oil and gas leasing on federal lands, arguing that his now-enjoined temporary moratorium and Interior’s leasing overhaul report fall well short.
Nicole Ghio, senior fossil fuels program manager for Friends of the Earth, said leaning into oil and gas in response to the war and prices contradicts Biden’s agenda will entrench the industry further.
“Biden made some very big promises during the campaign, as did most of the Democratic field,” Ghio said. “Since then, he hasn’t done much and in many cases has backslided.”
More renewables, less fossils is “the only way we’re going to actually gain independence from the oil industry and all of the problems that it’s caused,” Ghio said.
“If we allow the industry to take advantage of the crisis, what they’ll effectively do is start closing doors to those other options.”
Biden not off the green energy train: The administration’s posture has changed in the face of the war, as we discussed yesterday. White House and other officials in the administration have started to more explicitly solicit investment and production activity from industry and Wall Street
Before this week, the most forceful call to that end came back in December when Energy Secretary Jennifer Granholm first pressed oil executives to “get your rig count up” (WTI crude is up some 60% since then.)
To be sure, the Biden team is not renouncing its goals. Biden said just yesterday the strain on energy markets “should motivate us to accelerate the transition to clean energy” and that “pulling back clean energy investment will not lower energy prices for families.”
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GRANHOLM CALLS ON OIL AND GAS COMPANIES TO BOOST PRODUCTION: Secretary Granholm urged oil and gas companies yesterday to raise their output, echoing other administration officials in saying that the private sector ––and Wall Street ––have a “responsibility” to act during a moment of global crisis.
“We are on a war footing,” Granholm said yesterday during remarks at the CERAWeek conference in Houston.
“We are in an emergency, and we have to responsibly increase short-term supply where we can right now to stabilize the market and minimize harm to American families,” Granholm told attendees, noting that the U.S. government and energy industry have worked together “for over 100 years.”
“I hope your investors are saying these words to you as well: In this moment of crisis, we need more supply… right now, we need oil and gas production to rise to meet current demand,” she said.
Granholm also stressed that increasing output now does not detract from the administration’s goal of also creating clean energy alternatives. “We can walk and chew gum at the same time,” she said.
GREENS CALL FOR WAR-TIME RESPONSE ON CLEAN ENERGY: More than 200 environmental and other liberal groups are asking Biden to invoke the Defense Production Act and build more renewable energy technologies rather than encourage more oil and gas production.
“Putin’s ability to wreak such destruction on Ukraine is predicated on global dependence on fossil fuels,” the groups, which include Greenpeace USA, Center for Biological Diversity, and Sierra Club, said in a letter sent to Biden yesterday.
Using the DPA to build up more renewable technologies, heat pumps, and energy storage technologies would help reduce reliance on oil and gas and protect consumers from future price shocks.
HOUSE ADVANCES OIL BAN LEGISLATION: House lawmakers voted overwhelmingly to advance legislation yesterday that would ban all Russian oil imports to the U.S., voting 414-17 to advance the bill to the Senate.
Notably, the measure goes further than the ban announced by Biden earlier this week, the Washington Examiner’s Emily Brooks reports, “including by directing the United States Trade Representative to encourage other World Trade Organization members to suspend trade concessions to Russia” over human rights violations, in a bid to further isolate Moscow from the global economy.
“I think we’re all pretty good,” House Speaker Nancy Pelosi said yesterday when asked if the White House supports the separate effort. “We’re so pleased that the president has [taken executive action], but you know, you’re here at a legislature. This is a democratic process where people have weighed the equities, expressed their views, and the timing is what the timing is.”
UAE CALLS ON OPEC TO BOOST PRODUCTION: U.S. oil prices dropped by 12% yesterday after the UAE’s ambassador to the U.S. called on its OPEC partners to scale up production, citing the country’s desire to help scale up oil production and replace Russian barrels.
“We favor production increases and will be encouraging OPEC to consider higher production levels,” UAE ambassador Yousef al Otaiba told the Financial Times yesterday in a statement. “The UAE has been a reliable and responsible supplier of energy to global markets for more than 50 years and believes that stability in energy markets is critical to the global economy.”
NEWSOM WEIGHS GAS REBATE PROGRAM: California Gov. Gavin Newsom said he is exploring the possibility of a gas rebate program, seeking to give California residents relief from soaring gas prices, which have climbed to upwards of $7 a barrel in some parts of the state.
Newsom said during his annual State of the State address that he is working with lawmakers on “a proposal to put money back in the pockets of Californians to address rising gas prices.”
Though Newsom did not offer further details, a senior adviser said it “would be a rebate totaling billions of dollars, the Washington Examiner’s Tori Richards reports
“No one’s naïve about the moment we’re living in with high gas prices, and the geopolitical uncertainty fueling them,” Newsom said.
CO2 EMISSIONS HIT RECORD HIGH IN 2021, PER IEA: Energy-related CO2 emissions reached their highest level in history last year, according to new data released by the International Energy Agency. In 2021, energy-related CO2 emissions climbed by 6%, researchers found, reaching a record output of 36.3 billion metric tons.
IEA cited an increased reliance on coal as being the main driver behind the spike in emissions.
“The recovery of energy demand in 2021 was compounded by adverse weather and energy market conditions – notably the spikes in natural gas prices – which led to more coal being burned despite renewable power generation registering its largest ever growth,” the IEA said.
COAL ISN’T GOING AWAY ANYTIME SOON: Russia’s invasion of Ukraine has touched off a renewed demand for coal, the world’s dirtiest fossil fuel, as estimated fuel shortages have sent energy prices soaring.
The volatility has prompted coal prices to spike roughly 30% in one week, Breanne reports. Asian Newcastle benchmark futures rose to $440 per metric ton, while Europe’s futures reported trading above $350 a metric ton — triple their pre-pandemic levels.
Analysts said they don’t expect the prices to drop anytime soon, and are bracing for an estimated supply shortage of 3-5% in 2022.
“Everything related to energy is in deficit,” Siddharth Choudhary, an executive of thermal coal at global commodities trading firm Trafigura, told Reuters. “So there is not [an] alternative. With the current crisis for Europe, coal looks to be the best option.”
DIRE STRAITS FOR DOMESTIC SOLAR: U.S. solar prices rose 18% last year, threatening deployment of more of the renewable energy which the Biden administration and others argue is necessary to mitigate climate change.
A new report from the Solar Energy Industries Association and Wood Mackenzie established that solar capacity additions in 2021 reached a record 23.6 GW. But strains on global supply chains for solar products, as well as ballooning costs of critical minerals and trade actions, are projected to cut into additional growth, it said.
Wood Mackenzie has adjusted its forecasts for near-term solar additions downward by 19% due to those issues.
The Rundown
AP News Pressure builds on Biden to repay Venezuela’s goodwill moves
The Atlantic On Top of Everything Else, Nuclear War is a Climate Problem
Axios Biden restores California’s ability to set stricter auto pollution rules
Calendar
WEDNESDAY | MARCH 16
10 a.m. The Senate Environment and Public Works Committee will hold a hearing to evaluate the formula for the EPA’s Clean Water State Revolving Loan Fund (CWSRF)––a federal-state partnership that seeks to provide communities with low-cost financing for water infrastructure projects.
10 a.m. The House Agriculture Committee will hold a hearing to review USDA’s climate change programs.
