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HOW LOW WILL TRUMP GO WHEN IT COMES TO IRAN OIL SANCTIONS? President Trump faces a tough challenge in trying to place maximum pressure on Iran’s economy while simultaneously protecting the global oil market.

It’s an open question how far Trump wants to push Iran, and how long that will take.

Dan Eberhart, CEO of the oil services firm Canary and a Trump donor, met with the administration on Friday to get an idea of the administration’s plans for Iran and oil sanctions.

The administration’s goal: The administration’s goal is to cut Iran’s oil production from 1.1 million barrels per day to around 800,000 barrels per day, Eberhart shared with John in a read out of his meeting with Deputy Assistant Secretary David Peyman, the State Department’s sanctions chief.

There doesn’t appear to be a timeline on how long that 300,000 barrel-a-day reduction will take.

Progress has already been made: Iran is currently producing 1.1 million barrels a day, which is 1 million barrels fewer than it was producing before, the administration argues, seeing the sanctions as already having an effect on Iran before they formally kicked in on Nov. 5.

“The administration wants to make sure that the market remains balanced and that prices don’t spike in order to protect American consumers, but the sanctions are already having an effect,” Eberhart’s notes read.

The waivers that Trump announced a week ago were given to countries who are dependent on specific grades of crude oil from Iran, like South Korea. Peyman told Eberhart that those countries that received the waivers also pledged to continue to reduce Iran imports.

Administration is optimistic about Europe cooperating: The private sector in Europe is cooperating with the new U.S. sanctions, regardless of what some government officials may be saying, is another takeaway from the meeting.

Over 100 companies have exited Iran, while some 20 countries have gone to zero imports from Iran, the administration tells Eberhart. Administration officials have fanned out to 30 countries in an effort to bolster support for sanctions. Peyman says there is intense support for the administration’s effort to end Iran’s nuclear program, according to Eberhart’s notes.

The Congressional Research Service’s top Iran expert, Kenneth Katzman, said Oct. 31 that only one country had reached zero imports ahead of sanctions kicking in — South Korea.

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.  

MEANWHILE… OPEC THREATENS TO RAISE PRICES WITH SUPPLY CUTS: Saudi Arabia and Russia signaled they are seeking to cut oil production again next year to increase prices, after temporarily boosting their output this year to mollify Trump.

OPEC, led by largest producer Saudi Arabia, and non-OPEC countries, namely Russia, did not make any formal decisions during a meeting in Abu Dhabi.

“We need to do whatever it takes to balance the oil market,” Saudi Arabia’s Energy Minister Khalid al-Falih said Monday, in comments reported by the Wall Street Journal, adding that OPEC and its partners would have to cut production by 1 million barrels per day to offset lower prices and balance their budgets.

Al-Falih said the Saudis would cut exports by 500,000 barrels per day in December. A firm decision by the group is expected at a follow-up meeting in Vienna next month.

Why prices have fallen: Brent crude, the international benchmark, has fallen to barely more than $70 per barrel after breaching $85 in October. The fall came after Saudi Arabia and Russia, the top two oil producers outside the U.S., began boosting output a few months ago, partially in response to Trump, who worried his hardline policy of cutting off Iran’s oil was leading to high prices near the midterm elections.

The Trump administration granted temporary exemptions to some of Iran’s biggest customers, allowing them to continue importing Iranian oil, which has also helped ease prices, along with prolific output from U.S. shale producers.

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

TRUMP LEVERAGES U.S. ENERGY FOR BIG GAINS ON THE GLOBAL STAGE: The tip of the spear when it comes to President Trump’s diplomacy is not the tongue of the diplomat, but the power of the pipeline.

The United States is now the world’s No. 1 producer of oil and natural gas, eating away at Washington’s past dependence on foreign producers and oil cartels — that is, petrostates like Iran and Russia and autocracies around the world.

Trump calls it “energy dominance,” and the freedom it provides has undergirded many of the president’s decisions, from moving the U.S. embassy to Jerusalem to re-imposing sanctions on Iran, according to administration sources.

“It allows us to impose these sanctions and not upset the world oil market very much,” said Deputy Energy Secretary Dan Brouillette. “It’s a fundamentally different posture to be in, in regard to our foreign policy. … It just gives us leverage.”

In negotiations with European, Chinese, and other world leaders, the president has made energy a central theme. Earlier this year, Trump even taunted NATO members at a summit in Brussels, calling them “captives” to Russian energy.

Above all, the comment was aimed at Germany, which is working with the Russian state-run energy firm Gazprom to build the Nord Stream 2 pipeline.

Read the entire Washington Examiner magazine story here on Trump’s energy dominance agenda.

RICK PERRY SEES A PLACE FOR U.S. COAL IN DIVERSIFYING EUROPE’S ENERGY SUPPLIES: After presiding over a major natural gas deal in Poland, Energy Secretary Rick Perry traveled to Ukraine over the weekend to tout the place for U.S. coal in the European energy mix.

Perry touts shipping Pennsylvania coal to Ukraine: “The shipment of Pennsylvania coal from @XcoalEneegyRes to Ukraine is just one example of America’s readiness and commitment to help diversify Europe’s energy markets,” Perry tweeted on Saturday.

Perry toured the Kyiv’s Trypilska Thermal Power Plant, pointing out that it is now powered “in part by abundant, affordable coal from Pennsylvania.” He said the Energy Department supports Ukraine’s move to modernize its power plants, “and is encouraged by their efforts to diversify fuel supplies.”

Natural gas was just the beginning: Last week, he presided over a deal between Cheniere, the U.S.-based liquefied natural gas exporter, and Poland’s government-run oil and natural gas company on a 24-year deal to import U.S. LNG to the country.

The administration wants Poland to serve as a transit point to move more U.S. shale natural gas into the European continent to diversify its energy supplies away from Russia. But Perry is also pointing out that coal will also be part of that push.

Why coal, why now? The administration has been struggling to help the U.S. coal industry recover from waning demand that peaked in 2016 and continues to this day. Exports is a big part of that push, although government projections show that will fall in the next year, while LNG exports are reaching historic highs.

Sanctions possible on Russian energy project: At the same time, Perry is warning Russia it could impose sanctions on the Russian natural gas pipeline project Nord Stream II that is slated to traverse through Germany.

The Energy Department tweeted out a story on Monday in which Perry said the U.S. is still considering sanctions against the Russian energy project.

Trump has said that the pipeline makes Europe into a “captive” when it comes its energy supplies. The Nord Stream II is currently under construction to move natural gas through Germany.

SAUDI NUCLEAR DEAL NEARS DEATH AFTER KHASHOGGI MURDER: Negotiations between the U.S. and Saudi Arabia over a nuclear energy deal appear to be on hiatus after the kingdom admitted to murdering journalist Jamal Khashoggi last month, forcing the administration to reconsider its relationship with the Gulf powerhouse.

“It seems like the Saudis have suspended the bidding process, which was due to be about complete by now,” said Andrew Holland, chief operating officer at the nonpartisan American Security Project in Washington. “Certainly, if the bid happened today, I think Congress would force the White House to cease cooperation.”

The White House has been tight-lipped in discussing the status of U.S.-Saudi negotiations, even as top Democrats and Republicans urge the president to back out of, or suspend, the deal. Most recently, five Republican senators sent Trump a letter urging him to stop negotiations in light of the Saudi government’s involvement in the death of Khashoggi, a U.S. resident and Saudi Arabian.

And a Democratic bill expected to be introduced soon will specifically target the nuclear deal to punish Saudi Arabia over the reporter’s death. California Democratic lawmaker Rep. Brad Sherman plans to drop the bill soon.

The bill will be called the “No Nuclear Weapons for Saudi Arabia Act of 2018,” because of the risk Saudi Arabia could divert a civil nuclear energy program into a weapons program, Vox first reported.

NEW WAVE OF DEMOCRATIC ATTORNEYS GENERAL VOW TO FIGHT TRUMP’S ENERGY AGENDA: Democrats claimed a majority of state attorneys general offices in the midterm elections, and incoming Democratic attorneys general in Colorado, Michigan, Nevada, and Wisconsin promised in their campaigns to protect their state’s air and water from what they view as irresponsible and illegal actions by the Trump administration to roll back President Barack Obama’s agenda to mitigate climate change.

Trump’s trouble in the courts: The State Energy & Environment Impact Center, a coalition launched in August 2017 to assist state attorneys general contesting Trump’s deregulatory agenda, says attorneys general have filed 38 lawsuits against the administration on energy and environmental issues as of Oct. 5. Some of them have already been successful, and have forced the EPA and Interior Department to regroup by proposing narrower replacement rules to replace stricter Obama ones, setting up a new stage for legal battles.

Colorado joins the fight: Phil Weiser, the winning Democratic attorney general candidate in Colorado — replacing a Republican — said he’s eager to join the fight when he takes office in January.

“Clean air and water, and protecting public lands, are part of our ethos as Coloradans, and were an important part of our campaign,” Weiser told Josh. “There is a critical nexus of issues we care about in Colorado to unlawful actions being taken at the federal level that go against that.”

On the agenda: Weiser said plans to target at least four Trump administration actions.

These include opposing Trump’s effort to weaken Obama’s two signature climate change regulations: his strict fuel efficiency standards for cars and light trucks, which were set to  steadily rise through 2026, and the Clean Power Plan. In addition, Weiser vowed to contest the Trump administration’s proposed softening of an EPA rule targeting methane leaks from oil and gas drillers and fracking operations. And he promised to join ongoing legal challenges to the Trump administration’s decision to shrink the Bears Ears national monument in neighboring Utah.

Read more of Josh’s story here.

WILDFIRES CONTINUE TO RAGE ACROSS CALIFORNIA: Firefighters continue to battle two California wildfires that have killed at least 31 people as of Monday morning.

More than 200 people are missing, meaning the death toll could rise. The Camp Fire in northern California is the most destructive in the state’s history, and was just 25 percent contained as of Sunday, destroying about 6,500 homes and 260 businesses.

In Southern California, meanwhile, the Woolsey Fire reached 83,275 acres Sunday.

Zinke chimes in on wildwifes: Interior Secretary Ryan Zinke took time out to tweet about the wildfires on Monday.

“My thoughts and prayers go out to the families and victims of the wildfire in California,” he said. “Thank you firefighters and first responders for your sacrifice and continued heroism.”

Amid Justice Department probe: Zinke has been under scrutiny by the Department of Justice, with President Trump saying Friday that he was not inclined to fire the secretary over the allegations that he used his position for personal gain.

Zinke announced Friday that we would be deploying up to 4,000 Interior Department personnel to help counter a Central American caravan looking to cross the U.S. border with Mexico.

TRUMP CRITICIZED FOR THREATENING TO BLOCK WILDFIRE FUNDING: Trump came under fire from Democrats, firefighters, and even some Republicans for threatening to cut federal aid to California for an alleged “mismanagement” of forests. The president walked back the tweet later, expressing condolences to families who have lost loved ones and gave thanks to firefighters for their work to control the fires.

“I don’t think it’s appropriate to threaten funding,” Sen. Cory Gardner. R-Colo., said on NBC’s “Meet the Press.” “That’s not going to happen. Funding will be available. It always is available to our people wherever they are, whatever disaster they are facing.”

Harold Schaitberger, general president of the International Association of Fire Fighters, on Saturday issued a statement saying: “To minimize the crucial, lifesaving work being done and to make crass suggestions such as cutting off funding during a time of crisis shows a troubling lack of real comprehension about the disaster at hand and the dangerous job our firefighters do.”

Trump has a one-sided view of the fire problem: The president was amplifying a push by his administration for improvements to forest management policies, rather than blaming climate change for the worsening wildfires across the West.

He has accused environmentalists of holding up forest management projects, which involve the removal of trees and vegetation in forests to take away fuel for fires.

The U.S. faces a backlog of needed forest management projects, as federal and state agencies have used more of their budgets responding to wildfires, rather than preventing them.

There’s also a climate component: But federal officials who specialize in firefighting response, and California officials, say hotter and drier weather is contributing to more destructive wildfires, along with the fact that fires are increasingly burning close to homes and people as the West becomes more populated.

“Managing all the forests everywhere we can does not stop climate change, and those who deny that definitely are contributing to the tragedies that we are witnessing and will continue to witness,” California Gov. Jerry Brown, a Democrat, said in a news conference Sunday.

A state report earlier this year found that California’s record stretch of wildfires the past few years will get worse because of climate change, making conditions drier, and fire seasons longer.

RUNDOWN

Reuters Big Oil spent 1 percent on green energy in 2018

Wall Street Journal Canada’s crude problem: Lots of oil with nowhere to go

Bloomberg Duke Energy CEO Lynn Good says it will continue to close coal basins

Washington Post Virginia regulators balk at voting on pipeline permit affecting historic African American community