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THE WHITE HOUSE LINES ON GAS PRICES: The White House is very pleased to see the “meaningful” more than 50-cent drop in retail gasoline prices nationally, while at the same time making the case against the oil industry that price decreases aren’t as meaningful as they should be.
White House Communications Director Kate Bedingfield, in a memo circulated yesterday, referenced analyses showing that prices have fallen every day for over a month, and that Sunday saw the largest single-day decline since 2008.
“Even as Putin’s war continues to pressure global energy supply, American families are currently living through one of the fastest declines in gas prices in over a decade,” Bedingfield said. The fall in prices “has not earned the same reception” as the hikes, she said.
A preceding tweet from President Joe Biden reflects the administration’s simultaneous displeasure with an “unacceptable” rate of decrease at the pump.
“Oil prices have come down 20% from June highs, but prices at the pump have only come down half as much,” Biden tweeted, sweeping more broadly than an earlier message targeting retailers. “It’s time for oil and gas companies to pass along their lower costs to Americans.”
The background: The White House is capitalizing on the sustained downward swing in prices while it lasts, as analysts and officials indicate there’s a considerable chance they rise once again alongside any price cap on Russian oil which the Biden administration and other leading economies agree to impose. The impending embargo of most Russian oil imports to the EU is widely expected to affect prices, too.
The administration also clearly wants things to move further, and faster: $4.495 gas, where AAA puts the national average today, is still considerably higher than the sub-$3.25 drivers were buying a year ago.
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.
BIDEN PREPARING CLIMATE EXECUTIVE ACTION? The White House announced this morning that Biden will travel to Somerset, Massachusetts, tomorrow to talk about climate, green energy, and “seizing the opportunity of a clean energy future to create jobs and lower costs for families.”
The trip announcement follows reports that Biden is set to announce a climate emergency declaration and related executive orders, under pressure from environmental activist allies and congressional Democrats.
More on that…
SENATE’S CLIMATE HAWKS ADVISE BIDEN TO TAKE LEAD: Sens. Sheldon Whitehouse and Jeff Merkley laid out a vision for Biden’s next steps on climate now that Joe Manchin put new strictures on his support for green energy spending as part of the reconciliation package under negotiation.
Those options for Biden include strong agency-level carbon regulations, including the use of executive tariff authority to impose a carbon border tariff, Whitehouse told reporters yesterday.
The administration and Department of Justice should also participate in climate-related litigation that state and local governments are carrying out against oil and gas companies and put together a legal strategy treating the oil and gas industry like Big Tobacco.
“I’d advise him to make specific reference to the tobacco litigation for fraud about the harm [of] the product that the DOJ won in a thumping victory,” Whitehouse said. “That seems to me to be a pretty good model for at least investigating whether such a case could be brought against the decades of misrepresentation by the fossil fuel industry.”
Merkley said Biden should wield the “bully pulpit” of the presidency to demonstrate how climate change is affecting different regions.
“He can visit sites around the country where egregious things are happening. He can publicize these things,” Merkley said.
Biden pledged on Friday to take “strong” executive action in the event that a Senate deal excludes spending on green energy and climate measures.
WHITE HOUSE COMMITS TO $4/GALLON FORECAST: The Biden administration doubled down yesterday on its forecast that U.S. gas prices will continue to fall toward $4 per gallon, with White House economic adviser Jared Bernstein telling reporters that the recent decline in U.S. gas prices is a “trend” and “not a blip.”
Speaking at a White House press briefing, Bernstein noted that gas prices have dropped by an average of 50 cents per gallon over the last 34 days—a drop he attributed in part to oil price declines, as well as actions taken by President Biden.
“While there’s a lot that goes into setting global oil and gas prices,” he said, Biden’s “historic actions … have helped, and continue to help, increase the global supply of oil and are therefore in the mix of factors driving down the price.”
Looking ahead: “We think it’s reasonable to expect more gas stations to lower their prices in response to lower input costs,” he said. “And thus, barring unforeseen market disruptions, to see average prices fall below $4 per gallon in more places in coming weeks.”
MEANWHILE, U.S. DIESEL EXPORTS CLIMB TO DAILY RECORD-HIGH: The U.S. exported record high amounts of diesel fuel to Latin America and Europe in July, as global demand for diesel continues to outstrip current supply.
In the first 17 days of the month, the U.S. Gulf Coast exported an average of 1.35 million barrels of diesel fuel per day, according to new data from the oil analytics firm Vortexa—roughly 10% more than the previous July record, set in 2017.
When accounting for gasoline and other types of fuel, a senior Vortexa analyst told Breanne, total U.S. transportation fuel exports soared to another record high of 92.1 million barrels per day in July.
So far, the bulk of U.S. diesel exports this month has been sent to Latin American countries, where diesel fuel shortages have touched off a recent wave of political and social unrest, and forced many leaders to up their imports of U.S. supplies.
The U.S. has also seen an uptick in diesel fuel shipments to Europe, the data showed, while exports to Asia have declined for the month.
The U.S. has seen some relief for diesel prices in recent weeks, with national averages falling 3.6% in the past month, according to AAA.
EUROPE BRACES FOR RUSSIAN GAS CUTOFF: European Union leaders said today that they expect Russia not to restart its natural gas deliveries via its Nord Stream 1 pipeline, the realization of their worst fears as the bloc braces for potentially catastrophic energy shortfalls this winter.
Supplies from Russia have already been choked off because of the temporary Nord Stream 1 shutdown for maintenance, which Russia has warned could be extended because of sanctions and other supply chain issues. Now, though, European leaders are saying that Russia’s claims are a pretext for a larger, more permanent cutoff—and that the bloc should proceed under the assumption that Russian flows will not restart anytime soon.
“We’re working on the assumption that [Nord Stream 1] doesn’t return to operation,” European Budget Commissioner Johannes Hahn told reporters today.
For weeks, EU leaders have accused Russia of weaponizing energy, and warned that Moscow might well be using the 10-day scheduled maintenance period to Nord Stream as a pretext to halt all gas deliveries to the bloc—especially after Gazprom abruptly announced a 60% supply reduction last month, a move it attributed to sanctions.
“We are working on every possible scenario, and one of the scenarios that we have to factor in contingency planning is the possibility of flows not restarting,” a spokesperson for the European Union executive said at a press briefing today.
By halting deliveries, Russia aims “to spread uncertainty, destabilize the European market and prevent adequate filling of storage,” European commissioner for Energy Kadri Simson told reporters, adding that the cuts “are designed to increase energy prices and undermine the security of supply.”
What they’re doing in the meantime: EU leaders have raced to craft new emergency measures to help prepare for a feared Russian cutoff—and tomorrow, the European Commission is slated to unveil its so-called “winter preparedness plan,” which will include calls for countries to immediately reduce their gas use.
It remains unclear whether those cuts will be mandatory or voluntary, however, and today’s news could change things. One draft measure being considered would encourage financial incentives for companies to reduce gas use and switch to alternative fuels. Read more from Breanne here.
GERMANY TO WEIGH EXTENSION OF NUCLEAR PLANTS: Meanwhile, Germany said yesterday that it is considering extending the life of its three remaining nuclear plants, a potentially extraordinary step that comes as leaders in Berlin grapple with the possibility of a Russian gas cutoff.
Extending the life of the country’s nuclear facilities would mark an abrupt, and highly controversial, reversal from leaders’ plans to shutter remaining plants by the end of 2022.
It would also break with a March assessment issued by Germany’s environment and economic ministries, which did not recommend extending the lifetime of the plants. That assessment cited “legal, licensing and insurance challenges,” as well as high costs of maintenance as the primary reasons not to keep the facilities running.
But fears that Russia might not resume deliveries via Nord Stream 1 have given new life to the prospects for nuclear in Germany.
A government spokesman told reporters yesterday that the power grid operators had requested a second assessment in wake of the current energy crisis. The second test will be more stringent than the first and “will consider the potential impact of higher gas prices on electricity prices, more serious gas supply outages and a halt in French nuclear power plants production,” according to an economy ministry document shared with Reuters. Read more from Breanne here.
The Rundown
Reuters Canada launches consultations on oil and gas emissions cap
Euractiv EU looks to autocracies in search for energy
Calendar
THURSDAY | JULY 21
10:00 a.m. The Senate Energy and Natural Resources Committee will hold a business meeting where several bills, as well as the nomination of Laura Daniel-Davis to be an assistant secretary of the Interior and minerals management.
