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THE LATEST FROM THE GULF OF MEXICO: A federal judge struck down the Biden administration’s proposed restrictions on Lease Sale 261 and ordered it to expand the offshore acres included in next week’s Gulf of Mexico auction, in a major victory for oil and gas majors in the area.
In his decision last night, Judge James Cain of the Western District of Louisiana, a Donald Trump appointee, said BOEM failed to justify its new restrictions on the offshore acres, leaving the impression that they are “merely an attempt to provide scientific justification to a political reassessment of offshore drilling.”
“The process followed here looks more like a weaponization of the Endangered Species Act than the collaborative, reasoned approach prescribed by the applicable laws and regulations,” he added.
The details: The injunction blocks BOEM’s new proposed restrictions aimed at protecting the Rice’s whale in the Gulf. Environmental groups had argued that restrictions are necessary to protect the critically endangered species, whose population is believed to have declined to just 51.
These included adding new rules for oil and gas companies operating in the area, iIncluding adding speed limits for their vessels and limiting the hours in which they can operate.
Plaintiffs, including the American Petroleum Institute, the state of Louisiana, and major oil companies, argued that the restrictions were unjustified by Rice’s whale activity in the western Gulf (as it is primarily active in eastern Gulf waters), and that they unfairly and “unilaterally” target oil and gas companies—despite the fact that the area is one of the most heavily trafficked commercial vessel waterways in the nation.
Lawmakers also opposed the new restrictions: Republicans Sen. John Barrasso, Sen. Bill Cassidy, Rep. Bruce Westerman and Rep. Garret Graves were among the 10 lawmakers that filed an amicus brief seeking injunction, arguing that BOEM’s regulatory push violates the express text of the IRA and is also a breach of executive power.
Now, Lease Sale 261 can move forward under its original conditions next week.
What’s next: Environmental groups said they are considering options to appeal, citing the urgent need to protect the dwindling whale population.
Kristen Monsell, the Center for Biological Diversity’s attorney for oceans, lamented the “astounding” greed of the oil and gas industry, adding that she is “heartbroken that oil executives won’t make even minor accommodations to protect a whale from going extinct.”
“The Gulf doesn’t belong to the industry. It belongs to the people and wildlife living there, and it’s time to start saying no to harmful drilling activities,” she said.
Welcome to Daily on Energy, written by Washington Examiner Energy and Environment Writers Breanne Deppisch (@breanne_dep) and Nancy Vu (@NancyVu99). 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.
FERC’S RELIABILITY STANDARD RECOMMENDATIONS: The Federal Energy Regulatory Commission released recommendations yesterday on revising reliability standards for power grid and natural gas infrastructure to avoid issues during severe weather, as part of findings from a report on winter storm Elliot in 2022, Reuters reports.
The report, which is set to be published later this year, outlines 11 recommendations for actions to help prevent unplanned outages during extreme winter weather. One recommendation includes completing cold weather reliability standard revisions from Winter Storm Uri from 2021 – which resulted in the largest controlled blackout in U.S. history – and making U.S. natural gas infrastructure more reliable.
Other recommendations include robust monitoring of the enactment of reliability standards, and urging the North American Energy Standards Board to organize a meeting among gas, electric, grid operators and gas distribution companies to improve communication during severe cold weather incidents to boost awareness throughout the natural gas supply chain. The FERC report also states congressional and state legislation or regulation is needed to establish reliability rules for natural gas infrastructure. More on that here.
RUSSIA’S FUEL BAN STOKES DEMAND CONCERNS: Russia temporarily banned nearly all exports of diesel and gasoline products on Thursday, further squeezing already tight markets and sparking concern that the Kremlin is once again weaponizing its energy supplies.
The export ban, which Russia said was intended to help stabilize domestic markets, came into force immediately. Moscow also did not announce an end date to the ban, sparking fear that it could move to further throttle exports, as it did with its piped natural gas exports to the European Union last summer, Breanne reports.
It will not extend to four former Soviet countries—Belarus, Kazakhstan, Armenia, and Kyrgyzstan, according to Russian officials.
“Temporary restrictions will help saturate the fuel market, that in turn will reduce prices for consumers” in Russia, the Kremlin’s press office said on its website.
The announcement caused European diesel prices to jump by 5%. Russia has already slashed its exports of diesel fuel and gasoline by roughly 30% so far in September, to roughly 1.7 million metric tons, compared to the same period in August.
Diesel prices had already been climbing higher on tighter supplies and sent prices soaring last year for consumers in Europe and the northeast U.S., which rely on the fuel for home heating oil.
“Despite this being only a temporary ban, the impact is significant as Russia remains a key diesel exporter to global markets,” Alan Gelder, the vice president of refining, chemicals and oil markets at consultancy Wood Mackenzie, told Bloomberg. Read more here.
…COMMODITIES MARKETS ARE ALREADY FEELING THE SQUEEZE: The news is also shaking tables on the global market, stoking demand fears. Brent crude reached nearly $94 a barrel on Friday, with West Texas Intermediate following closely behind with a barrel costing more than $90.
KING CHARLES BANGS CLIMATE CHANGE DRUM: In a speech to the French Senate, King Charles III said France and the U.K must work together in order to combat climate change, noting the “existential” importance of the issue. But his speech was delivered less than 24 hours after U.K. Prime Minister Rishi Sunak announced the paring back of several green policies – a move that was greeted with fury from opposition politicians, green activists, and some business groups.
As Politico EU lays out, Charles, who’s known for his outspoken views on climate change, had already called for “fighting the scourge that is climate change” in a speech at the Palace of Versailles Wednesday night. But he went further in his speech to the upper house of French parliament on Thursday.
“Just as we stand together against military aggression [in Ukraine], so must we strive together to protect the world from our most existential challenge of all: that of global warming, climate change and the catastrophic destruction of nature,” he said.
In his address, Charles emphasized the contribution both countries could make to the fight against climate change. His speech is notable amid scrutiny of Sunak’s climate policies back home, after the U.K. prime minister eased targets meant to assimilate electric cars and encourage cleaner heating. Read more on that here.
SOCIAL COST OF CARBON IN AGENCY BUDGETS: The Biden administration is issuing recommendations for federal agencies to consider the economic effects of greenhouse gas emissions in their budgeting and purchasing decisions, an unprecedented move meant to harness the government’s power of the purse against climate change.
The White House’s guidance released Thursday will be issued to agencies across the board, from agriculture to health, and could affect purchasing decisions in various departments. The recommendations would allow agencies to consider the “social costs of greenhouse gases” generated by goods and projects, how they worsen global warming, and the cost of that to the economy.
The order “will help protect people from the growing impacts of the climate crisis and save hardworking families money,” the White House said in a fact sheet.
The guidance would work to inform and justify agencies’ budget proposals, the costs and benefits of certain grants, and international assistance. The guidance also directs agencies to explore penalty processes set in monetary terms to reflect the harm imposed on the environment. More from Nancy here.
The Rundown
Bloomberg Government Shutdown Poses ‘Seismic’ Threat to Pollution Controls
E&E News Strike puts green Democrats in a bind
Reuters EU countries agree proposal on new Euro 7 car emissions regulation
