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WHAT COMES AFTER GERMANY’S NS2 DECISION: Policymakers in the U.S. and Europe are talking over new sanctions on Russia and oil prices are rising following German Chancellor Olaf Scholz’s announcement that the certification process for Nord Stream 2 has been suspended following Russia’s decision to move troops into the Luhansk and Donetsk regions of Ukraine Monday night.
Nord Stream 2, which spans 750 miles and directly links Russia and Germany, was completed in September but had not yet received final certification from German authorities.
The U.S. praised Germany’s decision: White House press secretary Jen Psaki wrote on Twitter Tuesday morning: “We have been in close consultations with Germany overnight and welcome their announcement. We will be following up with our own measures today.”
EU ambassadors are also slated to meet today to draft a new round of sanctions, which are poised to take aim at people, governments, and business entities, both in Russia and the two separatist-backed regions in Ukraine.
The U.K. unveiled new sanctions on five Russian banks this morning, in what British Prime Minister Boris Johnson called the “first tranche” of punitive economic measures against Vladimir Putin.
“We have to face the possibility that none of our messages has been heeded and that Putin is implacably determined to go further in subjugating and tormenting Ukraine,” Johnson said.
In Washington, lawmakers from both parties urged Biden to implement a swift new sanctions package. On Monday, Senate Foreign Relations Committee Chairman Bob Menendez blasted Putin’s actions as an “unprovoked aggression” and a “brazen violation of international law” and called for “tangible, far-reaching and substantial costs for Russia in response to this unjustified act.”
Meanwhile, some Republicans in Washington urged Biden to implement a more punishing response to Russia’s aggression.
House Armed Services Committee ranking Republican Mike Rogers and House Foreign Affairs Committee ranking Republican Michael McCaul asked Biden to “immediately impose real costs for this blatant act of aggression and flagrant violation of Ukraine’s sovereignty and territorial integrity.”
President Joe Biden is prepared to follow up with formal sanctions later today after issuing an executive order Monday night that prevents new investments in the region, halts imports and exports of Russian goods into the U.S., and provides the authority to impose sanctions on specific individuals, according to the Washington Examiner’s Mike Brest.
Former President Donald Trump also blasted the administration’s response, saying in a statement that Russia has become “very very rich during the Biden Administration, with oil prices doubling and soon to be tripling and quadrupling” since his successor took office.
“The weak sanctions are insignificant relative to taking over a country and a massive piece of strategically located land,” Trump added. “Now it has begun, oil prices are going higher and higher, and Putin is not only getting what he always wanted, but getting, because of the oil and gas surge, richer and richer.”
The escalation has also touched off a spike in oil prices across Europe, which threatened to close in on $100 a barrel: Futures for Brent Crude, the global benchmark, touched $99 a barrel Tuesday morning — the highest point since 2014 — before settling at $97.
Meanwhile, U.S. West Texas Intermediate (WTI) crude futures reached $93.99, a 3.2% increase from Friday.
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THE COSTS OF THE COST OF CARBON RULING: The Interior Department said “delays are expected” with its oil and gas leasing program after a federal judge blocked the Biden administration from moving the social cost of carbon dioxide emissions back up to $51 per ton from the $7 mark where it was during the Trump administration.
The Justice Department is now asking District Judge James Cain, a Trump appointee, to stay his ruling, arguing it has been unduly disruptive to federal agency operations and that disruptions could compound “due to an inability to redo related environmental analyses in time to meet mandatory deadlines.”
In a motion filed Saturday night, DOJ lawyers said Cain’s injunction affects 21 rulemakings the Department of Energy is working on and hits other executive agencies, too, including Interior.
Interior’s Bureau of Land Management “had already incorporated the [higher per ton value] into its NEPA analysis associated with several planned onshore oil and gas lease sales,” the filing said.
Melissa Schwartz, an Interior spokeswoman, said following the filing that “delays are expected in permitting and leasing for the oil and gas programs” because of the injunction and that it “continues to move forward with reforms to address the significant shortcomings in the nation’s onshore and offshore oil and gas programs.”
A disguised blessing for Biden? Remember, the Biden administration wanted a pause on new oil and gas leasing in the first place and, at least publicly, only moved forward with the recent auction for federal Gulf of Mexico waters because another Louisiana-based federal judge said a blanket moratorium couldn’t fly.
This disruption serves Biden’s impulse — and that of his vocal environmentalist constituencies — to rein in fossil fuel development. But certainly it isn’t the preferred means.
FIRMS APPEAR WITH BIDEN TO ANNOUNCE NEW INVESTMENT IN MINERAL SUPPLY CHAINS: At a virtual meeting this afternoon, Biden plans to announce a $35 million federal contract with mineral company MP Materials for the collection and processing of critical earth minerals at its facility in Mountain Pass, California, the Washington Examiner’s Christian Datoc reports.
White House officials say the contract, awarded through the Pentagon’s Industrial Base Analysis and Sustainment Program, will help with “establishing a full end-to-end domestic permanent magnet supply chain.” As part of its bid, MP Materials has also pledged to invest an additional $700 million to expand the program over the next two years, which the White House estimates will create more than 350 jobs in the U.S.
The meeting will also be attended by Secretary of Energy Jennifer Granholm, White House National Climate Advisor Gina McCarthy, Deputy Secretary of Defense Kathleen Hicks, and California Gov. Gavin Newsom, according to a White House announcement.
USGS makeover: The Interior Department announced on Friday a $167 million allocation to replace laboratories used by scientists with the U.S. Geological Survey working on critical energy and mineral programs at the Colorado School of Mines in Golden.
HARRIS OFFERS ANOTHER FUEL COST WARNING: Vice President Kamala Harris delivered another warning over the weekend about consequences American consumers may face if things get uglier between Russia, Ukraine, and its western allies, the Washington Examiner’s Katherine Doyle reports.
“When America stands for principles … it requires sometimes for us to put ourselves out there in a way that maybe we will incur some costs,” the vice president said in Munich. “In this situation, that may relate to energy costs.”
Remember, Biden first delivered the message last week that drivers should expect higher fuel prices — and they’ve already been high and rising.
Oil is inching ever higher today, and the national average price for a gallon of gasoline is $3.53 as of today, per AAA.
Europe’s status: The EU’s energy supply is much more closely linked with Russia and members face much tougher circumstances than the U.S. on that front, but certainly the worst fears as to what a Russia-Ukraine escalation would do to Europe’s energy supplies seem to have largely abated.
EU Commission President Ursula von der Leyen now says the bloc is “rather on the safe side” after it, with the Biden administration’s help, worked out arrangements with major natural gas producing and consuming nations for contingency plans if gas deliveries are disrupted.
GOP PRESSURES BUTTIGIEG ON HIGHWAY FUNDING GUIDANCE: Senate Republicans are putting more pressure on the Biden administration to “rescind or substantially revise” its guidance on implementing highway funding in the new infrastructure law, arguing a memorandum put out by the Federal Highway Administration in December unduly acts on Democrats’ priorities where the law doesn’t provide for them.
Twenty-nine Republican senators, including a number who didn’t vote for the infrastructure law, wrote Transportation Secretary Pete Buttigieg on Friday to say the memo reflects “a decidedly different approach” than the law allows and one “that appears to restrict the flexibility of states and impose one-size-fits-all solutions to solving communities’ surface transportation challenges.”
The memo said in part that funding authorized by the law should be used to repair existing transportation infrastructure “before making new investments in highway expansions.”
Senate Environment and Public Works Ranking Member Shelley Moore Capito and Minority Leader Mitch McConnell had already raised the issue with governors and dismissed FHWA’s guidance.
The Rundown
Politico The group that brought down Keystone XL faces agonies of its own
The New York Times How Europeans are responding to exorbitant gas and power bills
Wall Street Journal: Wary of being left in the dark, Americans produce their own power
Calendar
TUESDAY | FEB. 22
3:30 PM: The White House hosts a virtual event announcing progress on securing critical mineral supply chains.
