WHAT’S HAPPENING TODAY: Good afternoon and happy Wednesday, readers! In today’s Daily on Energy, we continue to monitor oil prices which are beginning to recover after hitting a four-year low this morning. We also take a look at senators’ efforts to set a carbon pollution fee on high carbon emitting nations, like China.

Welcome to Daily on Energy, written by Washington Examiner energy and environment writers Callie Patteson (@CalliePatteson) and Maydeen Merino (@MaydeenMerino). Email cpatteson@washingtonexaminer dot com or mmerino@washingtonexaminer dot com 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.

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OIL PRICES START TO RECOVER AFTER HITTING FOUR-YEAR LOWS: Oil prices began to recover this afternoon after hitting four-year lows this morning, seeding doubts as to whether the oil and gas industry will be able to deliver more drilling, as sought by President Donald Trump.

Where prices stand: Just after 11 a.m. EST, both domestic and international benchmarks were trading below the $60 per barrel line, with prices reaching the lowest they have been since 2021. 

By 2:30 p.m. – not long after Trump announced a 90 day pause on his sweeping tariffs issued last week – prices dramatically recovered, sitting again above $60 per barrel. Brent Crude had recovered by 4.71% and was priced at $65.78 per barrel, while WTI saw a 5.17% increase and traded at $62.75 per barrel.

Prices had been on a steep decline since April 2, when Trump unveiled sweeping tariffs on dozens of countries. Before the tariffs were introduced, both Brent Crude and WTI were trading above $70 per barrel. 

The impact: For weeks, industry executives and analysts have estimated oil prices will need to remain at or above $65 per barrel in order for producers to profitably pursue new drilling. Any lower than that, oil drillers and developers are expected to feel negative effects – including a decline in oil production. 

“Depending on where you are in Texas or anywhere else in the U.S., there’s a certain dollar amount for crude oil that incentivizes drill. And if you fall below that, then drilling and exploration activity is disincentivized,” Karr Ingham, president of the Texas Alliance of Energy Producers and petroleum economist, told Callie.

He warned that if prices stay low and tariffs on critical products like steel remain in place for a sustained period of time, the industry could see lower levels of activity and lower revenue. As a result, producers may have to take on price-cutting measures, such as layoffs.

“I’m not suggesting that’s where we are right now,” Ingham said. “But if this ends up being a sustained period of lower pricing by, you know, 15 bucks a barrel or more, then we certainly could see that.”

Read more from Callie here.

CHEVRON REMAINS STEADY, PLANS TO INCREASE FRACKING: While it remains unclear how much the oil and gas industry will be able to carry out Trump’s “Drill, Baby, Drill,” agenda, one oil major has already spelled out its plans to do so. 

The details: Chevron confirmed to Reuters this week that it plans to increase its use of fracking in the Permian Basin, using a technique known as “triple-frac.” Like traditional hydraulic fracturing, this allows the oil major to use high pressure from a drill and perforating gun system to crack shale rock layers thousands of feet underground. The technique then goes a step further, fracking three wells at one time. 

This technique does use the same amount of sand and water – used to keep cracks open and pump natural gas and oil to the surface – as used in fracking one well. However, it is used more quickly. Jeff Newhook, a completions operations manager with Chevron, told Reuters that this means the company will need 60% more water and sand daily when triple-fracking. 

This doesn’t necessarily mean more costs. Newhook told the outlet that by using this technique, Chevron will be able to bring wells to production in 25% less time, reducing costs by 12%. 

“What’s really in it for us is a more efficient use of capital and a better return on our investment,” Newhook said.

Chevron used triple-frac for around 20% of its wells in 2024 and plans to increase that to as much as 60% this year. 

U.S. ABANDONS DECARBONIZATION SHIPPING TALKS: The U.S. exited talks on decarbonizing the shipping industry and threatened reciprocal measures against any fees on U.S. ships, Reuters reports. 

The International Maritime Organization, a United Nations agency, will host delegates this week in London to discuss measures to decarbonize the industry. In 2023, member countries at the UN shipping agency agreed to reach net zero by or around 2050. 

However, a State Department spokesperson told Reuters that the U.S. would not be “engaging” in this year’s negotiation, adding that the administration will place U.S. interests first in the “development and negotiation of any international agreements.” 

Reuters reviewed a diplomatic note from the U.S. which states “The U.S. rejects any and all efforts to impose economic measures against its ships based on GHG emissions or fuel choice.” 

The note added that if “unfair measures” go forward the U.S. will consider “reciprocal measures so as to offset any fees charged to U.S. ships…” 

CASSIDY AND GRAHAM REINTRODUCE CARBON POLLUTION FEE: Republican Sens. Bill Cassidy of Louisiana and Lindsey Graham of South Carolina have re-introduced their bill to penalize the highest carbon-emitting nations, especially China, using one of the president’s favorite tactics – a tariff. 

The details: The senators introduced the latest version of the “Foreign Pollution Fee Act” yesterday afternoon with the aim of holding countries like China accountable for unfair trade practices while encouraging domestic and cleaner manufacturing. 

The legislation would impose tariffs on high-emitting countries like China and Russia. The tariffs would be based on the amount of greenhouse gas emissions and pollution associated with the production and transportation of products like iron, steel, aluminum, cement, glass, fertilizer, hydrogen, solar components, and certain battery inputs.

While the bill targets carbon emissions, the Republicans have seemingly stopped short of framing it as a piece of climate legislation. An announcement from Cassidy’s office unveiling the legislation made no mention of “climate change,” “carbon,” or “greenhouse gas emissions” outside of industry quotes of support. 

The impact: Preliminary modeling conducted by Washington, D.C., think tank Resources for the Future has found the proposed tariff could help shift U.S. imports to countries with lower carbon intensity manufacturing, while also increasing domestic production of the covered products. 

“All of those taken together would reduce the emissions that are kind of embodied in US consumed products for those sectors,” RFF Federal Climate Policy director Kevin Rennert told Callie. 

While environmentalists and left-leaning lawmakers have long called for a carbon border adjustment mechanism to reduce global emissions, Rennert said this proposal would not have a big effect on overall emissions. 

“I think the focus from Senator Cassidy has always really been on leveling the playing field for US manufacturing,” Rennert said. “And the additional benefits that come along for reducing carbon intensity have been important, but not necessarily the primary goal of the legislation.” 

OFFSHORE WIND QUIETLY SEES MOVEMENT UNDER TRUMP: The offshore wind industry may not be entirely dead under the Trump administration, as construction for at least one new project began this month. 

The details: The Empire Wind 1 project seemingly began construction this month on the 810-megawatt wind farm set to be located less than 20 miles from New York City, according to Canary Media. The project’s developer, Equinor, did not issue any press releases regarding the major milestone. 

Instead, it was discovered through an email notice targeting boat captains and local residents dated March 24. The notice, obtained by Canary Media, revealed that the first phase of construction would start April 2025 and last until July. This phase will consist of installing a rock layer on the seabed to create a solid foundation for the wind turbines and protect the area from erosion. 

It is the first step toward installing the project’s 54 turbines, which will generate enough carbon-free energy for roughly 500,000 homes connected to the New York grid. The project is expected to be completed by 2027. 

Avoiding the spotlight: The lack of fanfare comes as no surprise, given the president’s disdain for the industry. On his first day in office, Trump signed an executive order temporarily blocking all lease sales for offshore wind projects and pausing any new approvals, permits, leases, or loans for wind projects both on and offshore.

“There’s a bit of hesitancy to be out in front,” Hillary Bright, executive director of Turn Forward, told Canary Media. ​“It’s about not wanting to stick their heads up and drawing more attention, potentially, from the administration, which is already giving quite a bit of attention to offshore wind.”

TRUMP CUTS PROGRAM FUNDS THAT PRODUCES CLIMATE CHANGE STUDY: The Trump administration is ending funding for the U.S. Global Change Research Program that helps develop the federal government’s climate change study, Politico reports. 

The U.S. Global Change Research Program produces a mandated congressional report, called the National Climate Assessment. The report, which comes out every four years, examines the impacts of climate change in areas like the environment, agriculture, and energy production. 

Politico said that, according to three federal officials familiar with the matter, NASA canceled the contract with the consulting firm ICF International, which helps to coordinate the report among the research program and federal agencies. 

One of the sources told the outlet that the cancellation of the contract has “forever severed” climate change work across agencies. The outlet added that several officials from the program were fired yesterday. 

ICYMI – TRUMP ATTACKS STATE CLIMATE LAWS: Trump has taken aim at state climate laws that he says threaten American energy dominance. 

Yesterday, Trump signed several climate-related executive orders, with one calling on the Justice Department to identify state climate laws that are a burden to domestic energy resources. 

In the executive order, Trump listed several state laws that the administration believes are hampering domestic energy, including New York and Vermont laws that impose fines on fossil fuel companies as well as California’s cap-and-trade policy. The president also cited states’ efforts to sue energy companies for their role in climate change. 

The executive order said these state laws and policies “weaken” national security and increase energy costs for Americans. 

The co-chairs of the U.S. Climate Alliance, New York Gov. Kathy Hochul and New Mexico Gov. Michelle Lujan Grisham, said in a statement that the administration “cannot unilaterally strip states’ independent constitutional authority.” 

RUNDOWN

The Guardian Revealed: Big tech’s new datacentres will take water from the world’s driest areas

Los Angeles Times How one woman is doggedly transforming a trash patch into a fragrant habitat garden

New York Times Finding Positive Climate News, One State at a Time