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ABOUT THAT $2 GAS PLEDGE: Could a President Ron DeSantis actually drive down retail gasoline prices to $2 per gallon, as he promised in his energy policy platform released today?
Breanne asked gas price guru Patrick De Haan, the head of global analytics at Gas Buddy, and his answer was a resounding “no.”
“It’s extremely, extraordinarily rare to have gas prices be below $2 a gallon when the economy is growing,” De Haan said.
“DeSantis can pave the way for oil producers, but he cannot make them produce oil. And that’s where he’s mistaken,” De Haan said.
OPEC+ controls one-third of global oil production, effectively giving it three times as much control as the U.S. when it comes to impacting oil prices. The U.S could double its production and still not see prices of $2 per barrel, De Haan said.
While the US is the largest producer of oil in the world, it has no state-owned oil companies. This means that, unlike OPEC+ governments, it cannot control how much oil its producers decide to put on the market.
“It’s small-minded thinking to think that a U.S. president can have an impact over a global commodity,” De Haan said.
“The feds, in our case, cannot dictate to oil companies what they must or must not produce,” De Haan said. “So the difference here is state-owned oil companies can direct their countries and our state owned oil companies to produce x amounts of volume, but the US has no control over what US oil producers do. “
“There’s no way to disconnect and isolate the U.S. economy to make this happen,” De Haan said. In addition, he noted on Twitter that oil companies “would simply not produce as much oil if [prices] were low enough for $2 gas. Refiners wouldn’t refine as much.”
“You take economic incentive away, and boom goes your idea,” he said.
We asked the DeSantis campaign for a response…stay tuned…
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.
$4.6 BILLION IN CLIMATE POLLUTION GRANTS FOR STATES AND CITIES: The Environmental Protection Agency this morning announced the launch of $4.6 billion in grants, funded by the Inflation Reduction Act, for states and localities to cut climate pollution, Nancy reports.
Here’s what’s of particular note:
– Cities can apply even if their states won’t: Florida, Iowa, Kentucky, and South Dakota turned down an earlier batch of funding, restricting them from applying for grants in this round. But individual counties or cities could still apply for funds, if they applied for the first round of funding.
“Some of the states that are not participating also emphasized to us that they felt that the cities in the metropolitan areas were better positioned to apply for these resources,” EPA administrator Michael Regan told reporters.
– The money could be put to an extremely wide range of uses: In documentation for applying for the grants, the agency provided examples of proposals, such as programs to encourage electric vehicle use, to introduce congestion fees to cut down on traffic, to build bike storage facilities, to boost energy-efficient appliances, to restore brownfield sites, and to implement “cap-and-trade” or other methods of reducing emissions from the power sector.
But that is a nonexhaustive list, and many more programs could be funded.
MCHENRY BASHES TREASURY’S NET ZERO GUIDANCE: Republican Rep. Patrick McHenry is blasting the Treasury Department on its new set of guidelines for financial bodies working to reduce their carbon footprint.
The House Financial Services chairman argued the guidelines “politicize capital allocation and advance progressive climate priorities at the expense of sound economic management.”
“It’s clear Treasury’s intention is to direct credit to politically favored activities in order to appease far-left climate activists,” McHenry said, adding that the committee would hold the administration “accountable.”
Mchenry asserts that the guidelines are an overreach from the department, and claims the instructions will be enforced as laws rather than voluntary standards.
The principles – which are voluntary guidelines for firms with commitments to net-zero carbon emissions – were introduced to help provide best practices for financial institutions to reach their goals, and further encourage the mobilization of more private sector capital to mitigate the effects of climate change. Treasury Secretary Janet Yellen announced the principles on Tuesday during a finance forum in New York, and said that the principles would also help financial institutions that haven’t made net zero commitments, but are interested, to see what doing so might entail. More on that here from our Zach Halaschak.
BIDEN’S MESSAGE ON CLIMATE: In a speech yesterday at the U.N. General Assembly in New York, President Joe Biden touted his administration’s efforts in combating climate change and helping poorer nations cope with global warming.
Biden listed a number of natural disasters throughout the world as examples of catastrophes fueled by rising global temperatures.
“Taken together, these snapshots tell an urgent story of what awaits us if we fail to reduce our dependence on fossil fuels and begin to climate-proof our world,” he said. “From day one of my administration, the United States has treated this crisis as the existential threat that it is, not only to us, but to all of humanity.”
The president added that he wanted to “responsibility manage” the U.S.’s competition with China, offering a collaborative message by stating officials “stand ready to work with China on issues where progress hinges on our common efforts.”
Both the U.S. and China, the world’s top two polluters, have previously signaled they found areas of common ground for reducing emissions. But talks have been rocky since Chinese President Xi Jinping declared in July that Beijing is going solo on how the country will address climate change.
BIDEN GETS HIS CLIMATE CORPS: The Biden administration announced on Wednesday the launch of an American Climate Corps to train thousands of young workers to pursue careers fighting climate change, a pared-back version of the program Democrats first proposed in sweeping climate legislation.
The New Deal-style program, which is expected to involve at least $40 million in funding, will aim to hire and train a new generation of the workforce focused on clean energy and a climate-resilient economy through projects such as conserving and restoring lands and waters while deploying clean energy. But the new program is a sliver of what was initially proposed in President Joe Biden’s 2021 American Jobs Plan, which would have invested $10 billion for a 300,000 workforce but failed to become law.
The move comes amid revived pressure from Democrats, who just days earlier called for the White House to create the program through executive order after it was left out of the Inflation Reduction Act. Led by climate hawks Sen. Ed Markey of Massachusetts and Rep. Alexandria Ocasio-Cortez of New York, they argued the program was necessary to work on key conservation and climate priorities. More on that here.
GAZPROM CEO: OPEC+ TO EASE OIL CUTS IF MARKETS SEE SUBSTANTIAL DEFICIT: The head of Russia’s Gazprom said today that OPEC+ producers will ease its oil production cuts if markets see a “substantial” deficit in the last quarter of 2023—opening the possibility for leaders in Riyadh and Moscow to backtrack on their previous decision to extend the cuts through the end of the year.
“If a situation emerges with an oil shortage, then, accordingly, there is OPEC+, which can react to this and increase the volume of oil supply to the market,” Gazprom CEO Alexander Dyukov said today at a conference in Siberia.
Russia and Saudi Arabia announced earlier this month that they would be extending the supply cuts, keeping a combined 1.3 million bpd off of global markets.
WOOD MACKENZIE PREDICTS LOWER EUROPEAN GAS PRICES: European natural gas prices next summer could be 20% lower than current estimates, thanks to decline in demand from power plants and supplies in storage, according to a report from consultant Wood Mackenzie.
As Bloomberg reports, the region is heading into the colder months with stockpiles above the seasonal norm. There’s also been a drop in gas use, with renewables gaining more traction in the market, nuclear output increasing, and economic pressures weighing on industrial and household consumption.
“The European gas sector looks set to see a fall in gas demand that will have a knock-on effect for prices next year,” Wood Mackenzie said Wednesday in the report. “Gas in power is expected to decline by 12% year-on-year in 2024, a similar decline to that of 2023.”
European gas prices have been turbulent this year, reacting to threats to global flows, such as strikes at liquefied natural gas facilities in Australia along with prolonged maintenance outages in Norway. Still, the firm expects a tighter market in 2025, when Russia’s gas-transit deal with Ukraine expires. Read more on that here.
UK ANNOUNCES FIVE YEAR DELAY FOR GAS VEHICLE BAN: The UK will push back its ban on new ICE-powered vehicle sales from 2030 to 2035, British Prime Minister Rishi Sunak said today, a five-year delay that was met with sharp criticism from some Conservatives and requests for clarity from automakers.
Speaking to reporters outside 10 Downing Street, Sunak said he is still committed to delivering on its goal of reaching net-zero emissions by 2050, but believed the UK should do so in a “more proportionate way” that takes into account cost of living struggles.
“It cannot be right for Westminster to impose such significant costs on working people,” Sunak said today. “At least for now it should be you, the consumer, who makes that choice—not the government forcing you to do it.”
He also said he believes that due to the improvements in EV technology, the “vast majority” of UK drivers will already have switched out their gas powered cars by 2030.
During the news conference, Sunak dismissed suggestions that he is “watering down” climate targets with the announcement, telling reporters that his commitment remains on the UK’s net zero emissions target, and all other domestic and international clean energy targets. Read more on the UK’s new timeline here.
The Rundown
Detroit Free Press ‘I want to work’: UAW members face financial turmoil amid strike, share frustrations
New York Times Gas prices have crept higher this summer, a challenge for the Fed
Bloomberg Congo sees expanded UAE mining investment, seeks Inga partners
