“What we’re trying to do is just provide relief against unfair trade practices. This is not an import ban,” a senior administration official told reporters this morning.

It’s not a ban, but the decision does portend additional tariffs, which could affect imports and solar growth even before they’re implemented.

Solar companies were saying just weeks after Commerce initiated its investigation that supplies were already being disrupted by the mere threat of tariffs and retroactive application.

Those disruptions, along with other new import restrictions and other supply constraints, have slowed overall growth in solar installations this year. Tariffs are expected to further strain existing supply relationships between U.S. project developers and the targeted countries, from which the U.S. sources some 80% of its solar imports.

Go-time for the climate law: Massive growth in utility-scale and distributed solar installations are integral to Democrats’ climate agenda. Commerce’s announcement adds additional pressure to the Biden administration and to U.S. solar cell and module manufacturers to make efficient use of the new advanced manufacturing production and other subsidies provided by the Inflation Reduction Act to increase capacity and supply of those components.

Solar manufacturers have jumped at the beefed up credits, announced new manufacturing facilities and expansions at existing ones, but ramping up production and displacing dependence on foreign imports is expected to take years.

Solar project developers and their trade groups say they want to source more components from home but have stressed that it won’t happen overnight, requiring a continuation of substantial volumes of imports if Biden’s decarbonization goals are to be kept within reach.

Reaction: Biden’s declaration of a trade emergency in June protects imports from these countries from duties through the summer of 2024 would not be enough to avoid the effects of Commerce’s findings, which “will strand billions of dollars’ worth of American clean energy investments and result in the significant loss of good-paying, American, clean energy jobs,” said Abigail Ross Hopper, president and CEO of the Solar Energy Industries Association.

Hopper said two years “is simply not enough time to establish manufacturing supply chains that will meet U.S. solar demand,” although she said it was good news that Commerce didn’t conclude circumvention was occurring with all products it looked at.

Commerce found four companies, one in each country, to be circumventing, and it concluded four other companies not to be circumventing.

Domestic manufacturing interests were pleased with Commerce’s findings and called on Biden to revoke his solar emergency declaration.

“It is unconscionable that the White House wants to continue to give Chinese manufacturers a pass for illegally violating U.S. trade law to the detriment of American companies and American workers,” said Michael Stumo, CEO of Center for a Prosperous America, which represents domestic producers.

Commerce will send auditors to each of the four countries in the coming months to confirm its findings, the administration official said, and expects to issue a final determination by May 1 of next year.

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.

BIDEN ACKNOWLEDGES ‘GLITCHES’ IN INFLATION REDUCTION ACT: Biden acknowledged “glitches” in Democrats’ Inflation Reduction Act and the billions it provides to subsidize U.S. electric vehicle manufacturing and other clean energy efforts, suggesting at a press conference with French President Emmanuel Macron that there are “tweaks we can make” to the legislation that will “fundamentally make it easier for European companies.”

The IRA “was never intended to exclude,” Biden added.

Macron, for his part, told reporters that he and Biden spoke a “great deal” about trade-related concerns during their sit-down meeting.

Trade tensions were expected to be a major theme of Macron’s visit. The French president has emerged as perhaps the most outspoken European leader against the IRA, which requires EVs to be assembled in North America to qualify for a $7,500 per vehicle tax credit, and which implements strict sourcing requirements for battery components beginning in 2023.

Macron has also led the campaign for the EU to pass a retaliatory “Buy European” subsidy program aimed at prioritizing the use of European-made components in key industries.

Ahead of the meeting, trade experts said they expected Macron to try to negotiate exemptions for European companies on the model of what Mexico and Canada have in place–though securing such a trade agreement is a lengthy and highly extensive process. Read more on the brewing trade war here.

OPEC+ EXPECTED TO STICK TO CURRENT OIL OUTPUT TARGET: OPEC+ is expected to roll over its current oil policy when it meets for its December meeting on Sunday, meaning the group would not deepen production cuts past the 2 million barrels per day reduction it ordered in October.

OPEC+ sources told Reuters the group is hoping to assess how the Russian oil price cap will affect oil markets after it takes effect Monday, and to get a better understanding of demand in China, which has struggled to reopen its economy as planned due to a resurgence of COVID-19 cases.

But the volatility and uncertainty have put OPEC+ in a difficult position: “They haven’t faced a period of this much short-term uncertainty in decades,” Raad Alkadiri, managing director for energy, climate and resources at Eurasia Group, told the New York Times.

OPEC+ CUTS LARGELY BLUNTED BY RUSSIA: Members of the OPEC oil cartel led by Saudi Arabia slashed production by roughly 1 million barrels per day (bpd) in November, fulfilling their commitment coordinated by the broader OPEC+ coalition the previous month.

Output averaged around 28.79 million bpd—the lowest rate of production since 2020, and which comes as OPEC attempts to correct for a feared market oversupply.

But the effects of the cuts were offset by Russia, a member of the OPEC+ coalition. In contrast to the rest of OPEC+, Russia increased production to 10.9 million bpd in November, a Bloomberg survey found—causing the overall OPEC+ oil cuts to average to just 361,000 barrels a day.

Russia is racing to export its oil ahead of new EU sanctions and the G-7 price cap, both slated to take effect on Monday.

But costs for shipping Russian crude have skyrocketed ahead of the sanctions: Rates for the Baltic Sea to India shipping routes are now in the neighborhood of roughly $15 million, or $20 per barrel, for loadings after the sanctions take effect on Dec. 5—up from around between $9 and $11.5 million before.

It’s unclear whether the Baltic-to-India freight rates will hold around $15 million should prices for Russia’s Ural crude fall below the price cap, Bloomberg reports.

… MEANWHILE, EUROPEAN SUPPLIES FIND A NEW HOME: Russian seaborne crude exports to European buyers rose to a six-week high in early November. Those trends began to reverse in recent weeks—but any additional supply was quickly snapped up by Asian buyers.

Shipments to Asia rose for the fifth consecutive week, while the volume of Russian crude sent to China, India, and Turkey, as well as the quantities on ships that have not yet shown their final destination, increased to a new high of 2.5 million bpd.

SILICON VALLEY’S EMBRACE OF NUCLEAR ENERGY: Venture capitalists in Silicon Valley are investing at historic rates in nuclear energy.

From 2015 and 2021, venture capital deal flow in nuclear energy increased 325% by volume and 3,642% by dollar value, according to Pitchbook data compiled for CNBC.

Supporters say the Inflation Reduction Act, which includes $369 billion to fund clean energy and fight climate change, is even more of a win for the nuclear industry. “There’s not been a resurgence of nuclear power, ever, since its heyday in the late 1970s,” Ray Rothrock, a longtime venture capitalist with investments in 10 nuclear startups, told CNBC.

But things are different now. “I have never seen this kind of investment before,” Rothrock added. Ever.”

DOE HOPES TO DELAY MANDATED SPR SALES: The Energy Department wants to either cancel or delay pending congressionally mandated sales from the Strategic Petroleum Reserve in order to accommodate the acquisition of new oil to refill the reserve, a top official told the Senate Energy and Natural Resources Committee yesterday.

Douglas MacIntyre, deputy director for the Office of Petroleum Reserves, said the department “can’t fill and release from the same site at the same time” and that “it doesn’t make sense for us to be releasing oil while we’re trying to refill the SPR from the emergency sales.”

The Biden administration intends to begin purchasing oil to refill the reserve depleted by Biden’s emergency drawdowns when WTI steadies in a $67-72 per barrel range — whenever that may be.

MacIntyre said the department specifically wants to delay or cancel sales mandated by Congress in fiscal years 2024 through 2027.

The Rundown

Washington Post Officials fear ‘complete doomsday scenario’ for drought-stricken Colorado River

E&E News Struggle over EPA air nominee foreshadows future fights

Calendar

FRIDAY | DECEMBER 2

3 p.m. The Environmental and Energy Study Institute (EESI) holds a virtual discussion to review what occurred at the COP27 summit and implications for U.S. policymakers. Learn more and register here.