ICYMI: The Senate unanimously passed oil and gas royalty legislation Wednesday night – sending the popular bill to the White House after it passed the House in a similar bipartisan manner in July.
What the bill does: Dubbed the “Royalty Resiliency Act,” the measure introduced by Texas Republican Rep. Wesley Hunt is meant to improve the management of oil and gas leases by removing certain royalties, until the Interior Department approves a “communitization agreement” outlining official royalty amounts.
Under current law, DOI requires an operator to pay the entirety of an oil and gas royalty, even if a well is partially federally owned. This forces operators to hand over millions of dollars in royalties, until the Bureau of Land Management approves a communitization agreement. When the agreement is approved, BLM then returns the remainder of the money to the operator – but agreements can often take years to complete.
“The Royalty Resiliency Act is a tremendous step in the right direction for America’s oil and gas industry to ensure their resources and capital are not tied up in administrative bureaucratic processes,” Hunt said in a written statement to the Washington Examiner. “Once signed into law, this unleashed capital will be directed towards additional energy projects, additional employees, and invested back into the American economy thereby reducing energy prices.
Something to note: An overwhelming majority of on-shore exploration and production companies that produce on federal lands are located in Hunt’s district, TX-38, according to James Kyrkanides, Hunt’s chief of staff.
The heads of the Senate Energy Committee, Chairman Joe Manchin and Ranking Member John Barrasso, spearheaded the bill in the upper chamber by asking for a hotline among both parties, Kyrkanides said.
The bill passed the House by voice vote.
Why this matters: There hasn’t been a lot of bipartisan oil and gas measures passing both chambers in a divided Washington. However, it’s unclear if the White House will sign the measure into law.
A spokesperson for the White House did not immediately respond to a request for comment.
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EDITOR’S NOTE: Today is Nancy’s last day writing Daily on Energy, as she is set to leave the Washington Examiner for new endeavors. Nancy’s been on the beat for just over a year, but she’s quickly become a strong energy and environment reporter and provided valuable daily reporting for our readers. We look forward to reading her coverage in her new role. Best of luck, Nancy!
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HOTTEST AUGUST ON RECORD: Last month was the hottest August on record, NOAA’s National Centers for Environmental Information said today.
The average global land and ocean surface temperature in August was 2.29 degrees Fahrenheit above the 20th-century average of 60.1 degrees. August marked the fifteenth straight month of record-high global temperatures. It was also a record-hot summer for the Northern Hemisphere, and 2024 is very likely to be the hottest year on record.
GEVO ACQUIRES ETHANOL PLANT: Renewable fuels company Gevo is set to acquire an ethanol plant located in North Dakota that uses carbon capture technology, for a total of $210 million.
The details: Gevo has entered a definitive agreement to acquire Red Trail Energy – an acquisition that Gevo states would accelerate the company’s mission to create renewable biofuels while abating carbon. The company expects to expand the site to include net-zero sustainable aviation fuel production, and plans to continue operating the facility.
Why this matters: Carbon capture and storage technology is making it more economical for green companies to fulfill net-zero objectives and conduct business.
“We accomplish several things with this investment. It immediately puts us on a path to becoming self-sustaining and profitable as a company in advance of our Net-Zero 1 project’s commercial operation,” Gevo CEO Dr. Patrick Gruber said in a statement. “This acquisition gives us the opportunity to build capability as a company and is a terrific training ground for our Net-Zero 1 project, as we inherit a trained cadre of employees who understand plant operations.”
Red Trail Energy has a sequestration capacity of 1 million metric tons per year – of which 160,000 metric tons per year are being utilized. According to a press release, the combined earnings of both companies is expected to make Gevo’s net profit positive in 2025.
HOUSE PASSES BILL LIMITING EV TAX CREDITS: The House passed a bill this morning in a 217-192 vote limiting federal tax credits from flowing to electric vehicles with parts produced in China, part of a broader effort by Republicans to increase pressure on the Chinese Communist Party and draw a contrast with the Biden-Harris administration. Seven Democrats joined Republicans in favor of the legislation.
The details: The bill, sponsored by Republican Rep. Carol Miller of West Virginia, would tighten the restrictions on credits for EVs that have battery components sourced from foreign entities of concern.
Its passage comes months after the Treasury Department finalized rules for the EV tax credit that Republicans and Sen. Joe Manchin said were too loose.
The Biden administration voiced opposition to the bill but stopped short of vowing to veto it. Read more here.
HUNDREDS OF THOUSANDS WITHOUT POWER AMID SEVERE STORMS: More than 400,000 people were left without power across several southern states this morning as Hurricane Francine made landfall along southern Louisiana.
The details: Francine, which has since weakened to a tropical depression, brought damaging winds and intense flooding in coastal communities in Louisiana, Mississippi, and even as far as Alabama. Around 10 a.m. local time, over 416,000 homes and businesses were left without power in the three states as the storm moved more inland.
Francine came ashore Wednesday, packing winds as high as 100 miles an hour, leaving homes ripped to pieces, downed trees, and powerlines pulled towards the ground. Just over 80 flights were canceled today at Louis Armstrong New Orleans International Airport, down from 156 flights that were grounded yesterday, according to FlightAware. No severe injuries or deaths have been reported.
As of around 2 p.m., over 311,000 people remained out of power across the state of Louisiana, per PowerOutage.us. More than 67,000 were without power in Alabama and Mississippi combined. Power company Entergy Corp told Bloomberg that it does not have a timeline for restoring the power, but said it should not take weeks as it did in the aftermath of Hurricane Ida in 2021.
SOUTH KOREA APPROVES TWO NEW REACTORS IN NUCLEAR POWER PUSH: South Korea’s Nuclear Safety and Security Commission gave the go-ahead to two new nuclear reactors today, Bloomberg reports.
The projects had been shelved under the previous South Korean president, Moon Jae-in, who had sought to phase out nuclear power as a safety risk.
But President Yoon Suk Yeol, who took office in 2022, has reversed that agenda and promoted nuclear as an emissions-free source of energy. The government now aims for nuclear’s share of overall power generation to rise from 30% today to 36% by 2038.
RUNDOWN
New York Times Broken Blades, Angry Fishermen and Rising Costs Slow Offshore Wind
The Guardian Burned-out firefighters are fleeing the US Forest Service amid labor disputes: ‘We are decimated’
Financial Times Global jobs market shaken by green transition