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THE BOTTOM LINE: Consumer energy prices are up 41.6% in the past year, the Bureau of Labor Statistics reported today.
Defining Biden’s presidency: Soaring energy prices are setting the course of President Joe Biden’s tenure.
The highest inflation in four decades – 9.1% in June, according to today’s consumer price index release – has badly hurt his approval ratings. Half of that inflation has been rising prices for fuel, oil, gas, and electricity.
And the surging price of gas, especially, has forced Biden to put aspects of his climate change agenda on pause and encourage the oil industry to increase production, in hopes of both limiting price increase for consumers and helping Europe weather the disruptions caused by the Russian invasion of Ukraine.
Gas prices also rose by more than 11% in June, when national average costs rose to their highest-ever point of $5.016 per gallon, according to AAA. The gasoline index soared in the past 12 months, rising by a whopping 59.9%—the largest 12-month increase since March 1980.
But gas prices weren’t the only contributing factor: The index for electricity also rose by more than 13% over the last 12 months, the largest single-year increase since 2006, while the natural gas index rose by 38.4%—the biggest 12-month jump since October 2005.
Biden, of course, has tried to signal to voters that he’s addressing costs, including by ordering the release of 180 million barrels of oil from the U.S. emergency stockpile and urging Congress to pass a three-month federal gas tax holiday. (But that effort landed with a thud last month in Congress, and analysts largely view any federal suspension as an ineffective method to drive down prices, and one that would likely yield little benefits for U.S. consumers.)
The White House response: In a new statement, Biden characterized the CPI report as “out of date” since gas prices have declined since June. (As of today, the national cost per gallon stands at $4.63, according to AAA.) Today’s data, Biden said, “does not reflect the full impact of nearly 30 days of decreases in gas prices that have reduced the price at the pump by about 40 cents since mid-June.”
“Those savings are providing important breathing room for American families,” Biden said.
But there’s no guarantee that oil and gas prices are headed down: “While the price of oil has declined on easing global demand, it would not take much to cause a reversal and send those prices back up and inflation higher with it,” said chief RSM economist Joe Brusuelas.
Asked yesterday whether Biden will use his trip to the Middle East to urge countries to increase their oil production, White House national security adviser Jake Sullivan declined to offer specifics—saying only that the administration “will convey our general view … that there needs to be adequate supply in the global market to protect the global economy and to protect the American consumer at the pump.”
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WHITE HOUSE COURTS MANCHIN WITH NEW OIL AND GAS PROJECTS: The White House is seeking new ways to get Sen. Joe Manchin on board with Biden’s signature climate spending bill—prompting the administration to postpone decisions on energy projects favored by the West Virginia centrist, including on a long-delayed Mountain Valley Pipeline project, as well as future drilling plans in Alaska and the Gulf of Mexico, the Washington Post reports.
But these steps would not come without a steep emissions cost: Outside groups estimate the projects in question would generate “anywhere between 680 million metric tons of carbon dioxide to up to six times that amount.”
The support of Manchin, who single-handedly tanked a previous version of the climate spending bill, is key for Democrats if they hope to clear their signature spending legislation and send it to Biden’s desk for signing.
Senate Majority Leader Chuck Schumer told lawmakers last week that, should Manchin signal his support, the bill could come to the floor as soon as early as this month for a vote.
But Politico reports that Democrats’ attitudes have run the gamut—ranging from “near-certain” to “fretful” that anything substantive will ever materialize. “I am generally optimistic. I’ll believe it when there’s a deal,” Sen. Chris Coons of Delaware told Politico last week. “I believe there is positive momentum, I believe there have been constructive conversations. But the specifics, the details, I think it’s best to let that work itself out.”
TOP EU COURT SIDES WITH NORD STREAM 2 OPERATOR: The EU’s top court delivered a victory to Swiss-based operators of Nord Stream 2 yesterday, allowing it to move forward with its appeal of EU rules that require separate companies to build and operate gas pipelines.
In issuing its ruling, the European Court of Justice (ECJ) rejected the basis of a lower court’s decision, which said the rules would not affect the company. According to the ECJ, “the General Court was wrong to hold that Nord Stream 2 AG was not directly concerned” by the EU pipeline rules, and sent the case back to the General Court.
The ruling is a win for the project to ship Russian gas to Europe, but of course the situation has become much more complicated in the meantime…
The court ruling comes after Russian state-owned gas giant Gazprom shut down the key Nord Stream 1 gas pipeline earlier this week for planned maintenance. European leaders, including German economic minister Robert Habeck, have warned Moscow might be using the planned maintenance as a “pretext” to halting gas flow to the EU for the foreseeable future.
U.S. GREENHOUSE GAS EMISSIONS LINKED TO $1.8 TRILLION IN ECONOMIC LOSS, NEW STUDY FINDS: A new Dartmouth College study found that greenhouse gas emissions from the U.S. and China are each linked to more than $1.8 trillion in global economic losses between 1990 and 2014—possibly giving documentation to legal efforts that seek to hold individual countries responsible for their contribution on global warming.
The report, published in the journal Climate Change, said three other countries—Russia, India, and Brazil—individually caused economic losses exceeding $500 billion during the same 25-year period.
In total, researchers said, those five countries caused a combined loss of roughly $6 trillion GDP, or about 11% of total GDP. It’s one of the first studies linking individual countries’ fossil fuel emissions to economic harm.
Climate change has caused economic harm in a variety of ways, researchers said, including through lowering agricultural yields, reducing labor productivity, and decreasing industrial output.
“This research provides an answer to the question of whether there is a scientific basis for climate liability claims—the answer is yes,” Christopher Callahan, first author of the study and PhD candidate at Dartmouth, said in a statement. “We have quantified each nation’s culpability for historical temperature-driven income changes in every other country.”
EU LEADERS EYE MORE ENERGY SAVINGS AMID FEARS OF A RUSSIAN GAS CUTOFF: The European Parliament’s energy committee backed a proposal to raise EU targets for energy savings to 14.5% by 2030—a sharp uptick from the 9% energy savings Brussels originally proposed last summer, and one that will set binding contributions for every country.
The proposal, which cleared the energy committee by a 50-7 vote, was praised by European Parliament member Niels Fuglsang on Twitter as “Good for the climate and bad for Putin.”
Lawmakers also backed a new target for the EU to get 45% of its energy from renewable sources by 2030, up from its 22% levels in 2020.
The new votes come as EU leaders scramble to end the bloc’s reliance on Russian gas imports and prepare for further cuts. News of the efforts also comes just days before the European Parliament is slated to unveil a formal proposal next week for how countries could cope this winter if Russia moves to fully cut its natural gas deliveries.
MOST U.S. CITIES UNPREPARED FOR RISING HEAT: Most U.S. cities are unprepared for severe heat conditions, according to a new analysis from UCLA’s Luskin Center for Innovation.
Researchers examined municipal plans from the country’s 50 most populous cities, and while they found that the term “heat” was often mentioned in planning documents, few cities offered concrete strategies to address it, or to protect residents from the threat of rising temperatures.
The new study, published in the journal Environmental Research Letters, comes as extreme heat events rise across the globe. Extreme heat is considered one of the deadliest effects of climate change, and scientists predict the severity and frequency of heat events to increase amid future population growth.
“Just a couple of years ago, very few cities were talking about preparing for rising temperatures, so it’s an important step that heat is becoming a larger part of the conversation,” V. Kelly Turner, lead author of the study and co-director of the Luskin Center, said in a statement. “But without concrete steps to protect residents, cities are lagging behind the problem.”
The Rundown
Washington Post Republicans threaten Wall Street over climate positions
Associated Press Spate of wildfires scorches parts of Europe amid heat wave
Reuters Shareholder ESG support down but not out, researchers say
CBS News Lake Mead shrinks to record low amid punishing drought and consumer demand
Bloomberg Freeport LNG Blast Created 450-Feet-High Fireball, Report Shows
Calendar
WEDNESDAY | JULY 13
2:30 p.m. 366 Dirksen The Senate Energy and Natural Resources’ Energy Subcommittee will hold a hearing on pathways to lower energy prices.
THURSDAY | JULY 14
10:00 a.m. 1300 Longworth The House Agriculture Committee will hold a hearing on “A 2022 Review of the Farm Bill: The State of Credit for Young, Beginning, and Underserved Producers.”
