Subscribe today to the Washington Examiner magazine and get Washington Briefing: politics and policy stories that will keep you up to date with what’s going on in Washington. SUBSCRIBE NOW: Just $1.00 an issue!
CRITICAL COPPER? Copper interests and a handful of lawmakers are lobbying the Interior Department to make some room for the element on the U.S. Geological Survey’s formal list of critical minerals.
That’s because the designation carries much more weight than denoting a general importance and gives a mineral and its industrial base special advantages, the most significant of which is now the business opportunities tied to the new domestic sourcing requirements for electric vehicle tax credits.
Some background: “Critical minerals” has become shorthand to refer generally to those in high demand or otherwise deemed essential to manufacturing, but it has a foundation in statute and specific criteria must be met for a mineral to be included on USGS’s formal list.
The government’s official list of critical minerals was created by a Trump executive order and was codified in the Energy Act of 2020, which directed Interior and USGS to put together a list of critical minerals and to update it at least every three years. To be included, a mineral must be non-fuel (count out uranium), deemed essential to the U.S. economy and national security, and determined to have supply chains vulnerable to disruption.
USGS’s final list was announced last February and included 50 mineral commodities. Zinc, nickel, lithium, and cobalt, all of which are inputs in green energy technologies, are among the five dozen minerals in the final list. Other metals like aluminum were also included. Copper, used widely in wiring and in piping in everything from air conditioners to EVs, was excluded.
Why Cu was left out: Copper is produced domestically at a scale that “mitigates its supply chain vulnerability,” USGS said, so it didn’t check that box. It did say, however, that supply risk for copper “has been increasing in recent years and it merits watching.”
Arizona Sens. Kyrsten Sinema and Mark Kelly, whose state is responsible for three-quarters of all U.S. copper mining, and colleagues including Sen. Joe Manchin signed a letter this week asking USGS to revisit the list and add copper because the war in Ukraine and other volatile geopolitical events have changed the supply risk picture.
Underlying their request was a report from the Copper Development Association, a copper trade group, which replicated USGS’s risk analysis using more recent data than the survey used to inform its final list and found that copper meets the criteria for inclusion.
What’s in the name: A lot is riding on the critical minerals designation, and Congress just made it even more important with the Inflation Reduction Act, which extends generous subsidies to electric vehicles if their manufacturers source their critical mineral inputs from home.
It’s a big business opportunity for mining ventures. Automakers have been cementing supply deals for lithium and other critical minerals since the IRA was passed in order to maximize the consumer EV tax credit. For now, it doesn’t matter where a battery’s copper was sourced for the sake of the credit.
Critical minerals mining projects also enjoy the privileges of FAST-41, the federal program Congress created in 2015 that was designed to speed up review, permitting, and authorization of certain infrastructure projects. Mining was added as a covered sector under FAST-41 in 2021.
Otherwise, various legislative proposals to improve supply chains that have been introduced in Congress, including Manchin’s permitting legislation, target support to critical minerals so defined by USGS.
“The issue is that with the increase in demand and no new copper coming online in the United States, we’ve now seen imports go from the 30s [percent] to near 49% of domestic copper consumption coming from imports now, and that’s as of today,” a copper industry source told Jeremy. “And that’s only going to grow.”
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.
RUSSIA TO CUT OIL PRODUCTION IN RETALIATION FOR WESTERN SANCTIONS: Russia said today it will cut oil production by 500,000 barrels a day in retaliation for Western oil sanctions that came into full force earlier this week.
The cuts amount to roughly 5% of Russia’s total exports for the month of January.
Oil prices jumped following the news, with futures for the international benchmark Brent crude at least 2.2% higher, above $86.34 a barrel by mid-morning.
The cuts were announced by Russian Deputy Prime Minister Alexander Novak after months of retaliation threats from Moscow as the G7 moved to implement its two-part oil price cap.
Though Russia framed the cuts as a response to the West’s punitive sanctions, many analysts said that cutting production at that rate shows that Moscow is feeling the pain from the sanctions, and is struggling to find buyers to fully offset its oil and refined products that it previously sent to the EU.
Russia also has limited storage space, meaning it cannot hold much supply surplus as it looks to find new buyers.
One official with the G7-backed price cap coalition told the Examiner that, despite Russia’s claims, reporting has shown a “significant amount” of Russian seaborne oil has been shipped via price cap-compliant tankers, highlighting the efficacy of the price cap plan in keeping Russian supplies on the market at lower prices.
Since the G7 and its price cap partners have largely banned the import of Russian oil and refined products, the bulk of the production cuts will be disproportionately felt by developing countries, rather than those who passed the punitive measures, this person added.
Market impact: The production cuts could give Russia better price leverage in negotiations with buyers in China and India, but analysts said that at the current rate, the cuts are unlikely to cause any immediate price pain in the West. “While jumping 3% on the news, Brent crude oil continues to trade within a range that has prevailed since November,” Saxo Bank commodities chief Ole Hansen told Reuters.
He added that longer-term cuts could accelerate a rise in global oil prices that was expected later this year.
RUSSIA VOWS CONSEQUENCES FOR U.S., STEPS UP BLAME FOR NORD STREAM: Meanwhile, Russian officials ramped up their rhetoric against the U.S., threatening unspecified “consequences” after a claim the U.S was responsible for blowing up its Nord Stream 1 and 2 gas pipelines in the Baltic Sea last fall.
“Our assumption was that the US and several NATO allies were involved in this disgusting crime,” Deputy Foreign Minister Sergei Ryabkov told reporters in Moscow yesterday. His comments were in reference to a report published by the controversial investigative reporter Seymour Hersh. The report, based on a single anonymous source, was the subject of a lot of scrutiny yesterday.
White House National Security Council spokeswoman Adrienne Watson told the Examiner Hersh’s report was “false and complete fiction,” and CIA spokeswoman Tammy Thorp told Breanne the allegations are “completely and utterly false.”
Russian President Vladimir Putin has long blamed the U.S. for carrying out the attack.
SOUTH AFRICA DECLARES EMERGENCY OVER ‘EXISTENTIAL’ BLACKOUT THREAT: South African President Cyril Ramaphosa declared a “national state of emergency” amid the country’s worst-ever string of rolling blackouts, which have caused outages every single day this year as state-owned utility Eksom scrambles to avoid total grid collapse.
2022 was the worst year of blackouts in South Africa, and this year could be even worse, as the utility struggles to maintain its aging fleet of coal-fired power plants or afford diesel fuel for its generators. Last month, conditions worsened again after Eksom announced the breakdown of 11 of its plans, forcing rolling blackouts of between four to 10 hours per day for consumers and some businesses.
The blackouts are an “existential threat to our economy and social fabric,” Ramaphosa said yesterday during his state of the nation address.
The declaration of a disaster “will enable us to exempt critical infrastructure such as hospitals and water treatment plants from load shedding … it will enable us to accelerate energy projects and limit regulatory requirements,” he added.
Ramaphosa said he also plans to appoint a dedicated electricity minister who will report directly to him and assume “full responsibility for overseeing all aspects of the electricity crisis” and response.
TC ENERGY LIFTS FORCE MAJEURE ON GAS LINE NEAR OHIO TRAIN DERAILMENT: TC Energy lifted its force majeure on a gas line on its Columbia Gas Transmission system today, three days after it suspended flows near the site of a train that derailed last week in East Palestine, Ohio.
The company said it had isolated and purged a segment of the gas line to protect against risk of explosion after it was revealed that one of the tank cars on the train had been carrying vinyl chloride.
The gas transmission system impacted connects large natural gas basins with markets in the Midwest and along the East Coast.
FUSION STARTUP MOVING AHEAD WITH NEW MASSACHUSETTS CAMPUS: Secretary Jennifer Granholm and members of the state’s congressional delegation are participating in a ribbon-cutting ceremony today for Commonwealth Fusion Systems’ commercial fusion campus in Devens, which the nuclear fusion startup intends to shape into the “birthplace of the commercial fusion energy industry.”
CFS, a spinoff of MIT’s Plasma Science and Fusion Center, is building a facility at the site for its SPARC fusion technology. SPARC uses its large high-temperature superconducting electromagnets to replicate fusion reactions.
Granholm recently celebrated the prospects of fusion as an abundant, carbon-free energy source after scientists at an Energy Department lab achieved net energy gain during a fusion reaction.
SPARC uses a different method and technology than the DOE experiment, which used laser energy to replicate a fusion environment.
PRO SPORTS DIPPING INTO SOLAR ENERGY: More than 40 professional sports teams have installed solar PVs at their stadiums or otherwise purchase electricity generated at off-site installations, including the two contenders in this weekend’s Super Bowl, according to a report put together by the Solar Energy Industries Association.
The Philadelphia Eagles and Kansas City Chiefs are two of the 13 NFL franchises that “turn to the sun every Sunday,” SEIA’s report said.
Philly is the no. 2 solar power procurer after the Sacramento Kings, while the NBA is the leading league for installed solar capacity.
EPA DISPERSING $1 BILLION TO REMEDIATE POLLUTION AT SUPERFUND SITES: The Environmental Protection Agency is expending $1 billion to clean up more than two dozen Superfund sites.
EPA announced the disbursement this morning, which was funded by the bipartisan infrastructure law. The 22 sites are located across the country and include locations tainted by groundwater pollution from industrial dumping of waste containing mercury, acids, and other chemicals.
GRANHOLM MET WITH GROUP BEHIND GAS STOVE STUDY: Secretary Granholm held a private meeting with former CEO Jules Kortenhorst of RMI, the group behind the study at the heart of the political frenzy over gas stoves.
Watchdog group Americans for Public Trust accessed Granholm’s official calendar through a FOIA request and found the two met in June 2021.
RMI, formerly known as the Rocky Mountain Institute, is a non-profit research and clean energy advocacy group.
The Rundown
Wall Street Journal Europe’s next energy test: Wrestling solar back from China
Politico Manchin ‘raising hell’ over White House handling of marquee Dem bill
Calendar
WEDNESDAY | FEBRUARY 15
10 am. 406 Dirksen. The Senate Environment and Public Works Committee will convene for a hearing to examine the future of low carbon transportation fuels in the U.S. and considerations for a nationwide clean fuels program.
THURSDAY | FEBRUARY 16
10 am. 366 Dirksen. The Senate Energy and Natural Resources Committee will hold a hearing to examine the impact Russia’s war in Ukraine has had on global energy security nearly one year after its invasion. Learn more here.
