WHAT’S HAPPENING TODAY: Good afternoon, and happy Juneteenth! If you are off today, we hope you are having a restful Thursday and keeping cool in this heat. 

Most of the U.S. is in for some scorching temps hitting the 100s over the next few days. So, make sure you drink plenty of water and stay cool! 

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In today’s Daily on Energy, we are monitoring oil prices as tensions in the Middle East continue. We also take a look at hydrogen advocates’ efforts to lobby lawmakers to preserve clean hydrogen tax credits. 

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.

HEAT DOME TO HIT PARTS OF THE US: Starting tomorrow, a heat dome will bring extreme heat and humidity to many parts of the U.S., marking the first heat wave of the summer. 

The extreme heat is expected to begin forming today in the eastern Rockies and Midwest, then expand to the east this weekend. The heat is expected to last throughout next week. 

Temperatures will reach the upper 90s and low 100s, which is 10-20 degrees above average in June, AccuWeather Meteorologist Alex Duffus said. 

AccuWeather said nearly 170 million people will experience temperatures above 90 degrees during the heat wave into next week. The heat wave is expected to increase energy demand due to the widespread use of air conditioning. 

“From Monday to Wednesday dangerous heat will focus on the Northeast region with widespread highs in the 90s and some areas approaching or exceeding 100 F, resulting in a surge in energy demands and the need to limit exposure to the extreme conditions,” Duffus said. 

OIL PRICES COULD SOAR AMID MIDDLE EAST TENSIONS: As oil prices sit in the mid to high $70s, analysts are now warning they could jump by another $10 as tensions grow between Israel and Iran. 

Analysts with Goldman Sachs estimated this week that geopolitics could put upward pressure on international benchmark Brent crude. They estimated that prices could even reach as high as $90 per barrel if the conflict results in a lower supply from Iran, according to Reuters. 

Rising shipping rates: Prices could very well face increased pressure from unintended consequences for the global supply chain as prices to charter large oil tankers have more than doubled since the conflict between Israel and Iran escalated last week. 

Figures from Clarksons Research obtained by the Financial Times found that the cost to charter a vessel capable of carrying 2 million barrels of oil from the Gulf to China jumped from $19,998 per day to $47,609 over the course of one week. The reason for the price increase is primarily due to fewer shipowners being willing to sail through the Strait of Hormuz. 

“Tanker freight rates on routes out of the Middle East have risen sharply over recent days, with some owners wanting to avoid the region, or demand higher risk premiums to operate in the area,” Clarksons Research managing director Stephen Gordon told the outlet, noting that oil flows have still continued. 

Plus…support for more OPEC+ output hikes: Still, prices could see some relief from OPEC+ if the bloc again decides to accelerate its planned output increases later this year.

The group is facing pressure from members like Russia, who are publicly calling for more oil to be pumped into the market. 

“To ensure and balance it, we need to return to the market part of those voluntary reductions that were adopted in 2023,” Russian Deputy Prime Minister Alexander Novak said today, pointing to rising summer demand, according to Reuters. 

As past decisions to accelerate OPEC+’s planned output hikes sent prices to the low $60s and even the high $50s, any similar action may help avoid prices from soaring too much as Middle Eastern tensions develop.  

THE BATTLE TO PROTECT HYDROGEN CREDITS: Hydrogen advocates are fighting to preserve hydrogen tax credits, even after Senate Finance Republicans joined House GOP lawmakers to slash those incentives. 

The Senate Finance Committee’s One Big Beautiful Bill Act text includes a measure to end the Section 45V Clean Hydrogen Production Tax Credit from the Inflation Reduction Act by next year, similar to the House-passed bill. This move by Senate Republicans is yet another setback for the hydrogen industry.

“The outcome that we had this week reflects the fact that a lot of 45V is very, very interesting to so many Republicans, but that it’s still at the bottom of the radar screen, relative to all the other things that are being debated,” Fuel Cell and Hydrogen Energy Association CEO and president Frank Wolak told Maydeen. 

Wolak said the industry’s messaging to lawmakers has been “refined” due to the limited time. He added that hydrogen credits are critical for the U.S. competitiveness against China. 

“We need to make these investments, or we have a strong threat of the Chinese simply taking over this industry, and we’re going to look backward and say, ‘Why did we let this happen?'” Wolak said. 

If the credits are ultimately cut, the industry will continue to operate at more of a state level, Wolak said. Still, he added that it would be a “huge withdrawal.”

“So many companies’ component systems are commercially ready now. They don’t need to go backward. They need to go forward, and 45V is an enabler,” Wolak said. He added that, while U.S. hydrogen operations will be limited, most activity will shift to Japan, India, Europe, and China.

DOE Hydrogen Hubs: Today, seven of the Energy Department hydrogen hubs sent a letter to Senate Majority Leader John Thune, Senate Finance Committee Chairman Mike Crapo, and the Senate, urging them to preserve and strengthen 45V. 

“Allowing 45V to lapse prematurely would put at risk these projects, the hundreds of

thousands of jobs they will create, and approximately $140 billion in economic benefits they

forecast,” the letter reads. 

“It would also risk ceding leadership in hydrogen technology and supply chains to foreign competitors at a time when the U.S. should be asserting global leadership in energy innovation by securing local, domestic fuel supply,” it added. 

The DOE Hydrogen Hubs are part of a program funded by the Bipartisan Infrastructure Law to help accelerate the deployment of clean hydrogen production. 

EPA PROPOSING A SMALLER SCIENCE WING: The Environmental Protection Agency is proposing to shrink its science wing such that it would only include three divisions, according to an internal summary viewed by E&E News. 

According to the internal summary, the Office of Applied Science and Environmental Solutions (OASES) will include three divisions, consisting of coastal areas, drinking water safety and methodologies for assessing environmental contamination. 

The agency said in an email roundup that the OASES will focus on shorter-term projects that meet “statutorily required functions.” Two employees said the email was sent to research staff this week to summarize a recent town hall meeting. 

“OASES is expected to be much smaller than ORD, so teams will look much different and will have different goals, strategies, etc.,” it said. 

The OASES integrate scientific research and expertise to help the agencies with rulemaking and assistance to states. 

DOOR CRACKED FOR MORE DRILLING IN THE UNITED KINGDOM: While climate activist organizations like Just Stop Oil declared victory over efforts to increase oil and gas development off the coast of the United Kingdom, ministers have taken a step closer to approving new drilling operations. 

The details: The U.K. government released new guidance today related to environmental impact assessments for offshore oil and gas developers. The guidance does not appear to shun the fossil fuel industry, as energy security minister Michael Shanks said it will offer “clarity on the way forward for the North Sea oil and gas industry.” 

It specifically aims to ensure that future assessments review all effects of oil and gas extraction in the North Sea, and how those environmental impacts should be assessed. The government said developers will not be able to submit applications for approval to drill for oil and gas in already licensed areas – something that had been on pause since last year. 

Back and forth: Last summer, the U.K.’s Labour government said it would not permit any new oil and gas drilling licenses in the North Sea as part of the country’s broader effort to reach net-zero carbon emissions by 2050. However, there has since been an acknowledgment from leaders that fossil fuel production will play a critical role in supporting local energy demand. The government insisted today that it is committed to not issuing new licenses on new oil and gas fields.

ICYMI – FEDERAL REGULATORS REMOVE BARRIERS FOR NEW GAS PROJECTS: Yesterday, the Federal Energy Regulatory Commission (FERC) took several actions boosting the natural gas industry, making it easier for developers to build new facilities and projects. 

The independent agency specifically granted a two-year temporary waiver to raise the cost limit for when natural gas developers are allowed pursue construction or pipeline modifications without being forced to obtain additional case-by-base certifications. FERC also moved to permanently repeal a previous commission rule that prohibited construction activities for natural gas facilities while certain requests for rehearing were pending before the commission. 

FERC has said these two steps will give natural gas companies more flexibility and less regulatory burdens when pursuing new projects. 

In line with Trump: FERC’s actions clearly stem from the administration’s efforts to support the oil and gas industries and deliver on the president’s agenda for increased domestic energy production. With yesterday’s announcement, commission chairman Mark Christie pointed to the need for more natural gas generation as data centers and artificial intelligence drive soaring energy demand. 

“As the demand for electrical power continues to grow, getting more natural gas generation built is critically important and that means we must get natural gas infrastructure to supply that generation built more quickly as well, so that we can provide consumers with reliable power,” Christie said. 

RUNDOWN 

The Guardian ‘This isn’t a gimmick’: the New Yorkers trying to restore the American chestnut

Politico ‘Throwing us off a cliff’: Megabill could derail hundreds of planned clean energy projects

Fast Company What is ‘wet bulb’ temperature? How heat and humidity combine to dangerous levels