WHAT’S HAPPENING TODAY: Good afternoon and happy Friday, readers! We are kicking off Daily on Energy with news coming from the Transportation Department, which finalized a rule that declared the Biden administration’s fuel economy standards ignored statutory requirements by including electric vehicles.
Callie and Maydeen also delve into Elon Musk and President Donald Trump’s public feud over the House Republicans’ “big, beautiful bill.” We take a look at provisions within the bill that could affect Musk and his businesses.
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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.
QUOTE OF THE WEEK: President Donald Trump is on shaky ground with some of the largest investors in the shale industry, as energy-focused private equity firm Quantum Capital Group’s CEO Wil VanLoh accused the president and his administration of causing “a lot of chaos.”
“Obviously, the president didn’t check to see that ethane is a byproduct of all that shale oil that we’re producing out there in the Permian,” VanLoh was quoted as saying by Bloomberg, referring to the Department of Commerce’s ban on exports of ethane to China. “If we can’t sell it, how are we going to keep producing what we’re producing out there?”
TRANSPORTATION DEPARTMENT DECLARES BIDEN ‘CAFE STANDARDS’ ILLEGAL: The Transportation Department finalized a rule declaring that the Biden administration’s fuel economy rule went beyond the government’s legal authority by including electric vehicles.
The department finalized a new rule, Resetting the Corporate Average Fuel Economy Program, in which it stated that the Biden administration’s fuel economy standards, also known as CAFE standards, ignored statutory requirements.
The DOT rule faulted the Biden administration for accounting for electric vehicles when promulgating the standards, resulting in more stringent standards, since EVs have a higher fuel economy than gas-powered vehicles.
The Biden administration’s National Highway Traffic Safety Administration “assumed significant numbers of EVs would continue to be produced regardless of the standards set by the agency, in turn increasing the level of standards that could be considered maximum feasible,” the final rule reads.
The rule also said it would ensure the standards are aligned with Trump’s executive orders, which call for repealing policies and regulations that boost EVs. The department said the rule does not change the existing standards but NHTSA will exercise its enforcement aligned with the interpretation of this rule.
The Biden administration finalized the CAFE standards last June to reduce vehicle emissions. The rule at the time increased fuel economy standards by 2% per year for passenger cars and light trucks. It also required heavy-duty vehicles to increase fuel efficiency by 10% per year for model years 2030-2032.
The prior administration said the standards would have saved vehicle owners more than $600 in fuel over the lifetime of their vehicles.
Read more by Maydeen here.
MORE NEWS ON FUEL ECONOMY STANDARDS: Meanwhile, the Senate Science, Commerce and Transportation Committee Republicans released text late Thursday as part of the Senate’s version of the reconciliation bill, which proposes terminating the penalties for automakers who fail to meet CAFE standards.
WHERE TRUMP’S ‘BIG, BEAUTIFUL BILL’ WILL HIT ELON: Trump and billionaire Elon Musk’s alliance with Trump ended dramatically this week as the two publicly feuded on social media over Republican lawmakers’ One Big Beautiful Bill Act.
The legislation, which passed in the House in late May, would cut several green initiatives and tax incentives set under the Biden administration that have benefited Musk and his businesses, especially Tesla. Here are three main provisions that could likely hurt Musk and his electric vehicle-venture if passed as written.
Solar subsidies and investments: Musk and Tesla have advocated rooftop solar subsidies for years, particularly as the EV company merged with leading solar panel manufacturer SolarCity in 2016. Since the acquisition, Tesla’s energy division has quietly grown, selling various solar and battery storage projects while benefiting from federal subsidies.
The House-passed reconciliation bill currently includes a provision to repeal the 2022 Inflation Reduction Act’s residential solar credit, which is equal to 30% of the costs of new, qualified clean energy property installed on residential homes.
Emissions rule rollbacks: Also on the chopping block are stringent emission standards set by the Biden administration to accelerate the transition toward EVs. The House version of the legislation would repeal several IRA programs designed to reduce vehicle emissions as well as Biden-era CAFE standards.
Tesla has benefited from the programs, as it receives regulatory credits that can be traded or sold to other automakers who need to meet the standards.
EV tax credits: The bill would also repeal a slew of subsidies that incentivize consumers and businesses to purchase EVs and plug-in vehicles, including previously owned clean vehicle credits, clean vehicle credits, qualified commercial vehicle credit, alternative fuel vehicle refueling property credit, and the transferability of clean fuel production credits.
Read more from Callie and Maydeen here.
SMOKE AND DUST EXPECTED TO HIT THE U.S. THROUGH THE SUMMER: The U.S. this summer could expect rounds of smoke and dust as a result of the hundreds of wildfires occurring in Canada and strong winds blowing off Sub-Saharan Africa, according to AccuWeather.
Earlier this week, parts of the U.S. experienced poor air quality due to the hundreds of wildfires in Canada. Although the air quality has improved, meteorologists are expecting more smoke to hit throughout the summer, starting as soon as next week.
“Pockets of smoke and haze are expected to hover over portions of the Upper Midwest and Great Lakes through this weekend,” said AccuWeather Meteorologist Brandon Buckingham. “However, the density and overall aerial coverage of the smoke will continue to decrease.”
As of Thursday, there are over 200 wildfires in Canada with about half of them burning out of control, according to the Canadian Interagency Forest Fire Center.
Meteorologists also warned that strong winds in the Saharan Desert will result in places like Florida and the South experiencing a heavy amount of dust in the air.
‘DRILL, BABY, DRILL’ STILL ON THE DOWNWARD TURN: The total number of active drilling rigs in the U.S. is down once again this week, dropping by more than 30 rigs over the last year, according to data released by Baker Hughes today.
The details: The number of domestic active rigs dropped by roughly four this week to 559 and was down by 35 from this time last year. All of the rigs dropped this week were located onshore, with the offshore total remaining unchanged.
The number of active rigs dropped all throughout the month of May and could continue to decline throughout June as the price of oil per barrel has recently stayed in the low $60s and tariffs on steel jumped to 50% this week. Though, prices did start to recover this week, with both international and domestic benchmarks hitting the mid $60s.
Just before 3 p.m. EST, West Texas Intermediate had increased by 1.93% and was selling at around $64.59 per barrel. Similarly, Brent Crude jumped 1.74% and sat at roughly $66.50 per barrel.
The jobs numbers: Employment in the oil and gas industry is down by 200 over the year through May, according to the jobs report released by the Bureau of Labor Statistics this morning. Support activities for mining – a category that includes a lot of oilfield services – is up 1,200.
ICYMI – OVER 200 INDUSTRY GROUPS CALL ON SENATE TO PRESERVE HYDROGEN TAX CREDIT: As the Senate takes up the One Big Beautiful Bill Act to advance the president’s spending and tax agenda, more than 200 industry groups, energy companies, fossil fuel trade groups, and chambers of commerce are calling on the upper chamber to save one tax credit related to hydrogen.
What’s at stake: The House-passed bill currently includes a provision to repeal the Clean Hydrogen Production 45V tax credit, which provides a 10-year incentive for clean hydrogen. Under the legislation, projects that begin construction after December 31, 2025 would no longer be eligible to receive the credit, eliminating federal support for any projects poised to start construction after this year.
The plea: In the letter sent to Senate Majority Leader John Thune and Senate Finance Committee Chairman Mike Crapo yesterday, the hydrogen advocates said repealing this credit so soon would cede the future of hydrogen to China.
“If the United States pulls back on 45V, it risks repeating the path of other industries — where China captured global leadership while America stood still,” the letter reads.
Rather than ending the credit this year, the groups have proposed maintaining the subsidy for projects with a commence construction date of no earlier than December 31, 2029.
Notable signatories include the American Petroleum Institute, National Association of Manufacturers, the U.S. Chamber of Commerce, the Business Council for Sustainable Energy, the U.S. Hydrogen Alliance, and Entergy Texas.
RUNDOWN
Inside Climate News How Nantucket Is Preparing for Rising Seas
The Guardian Minnesota’s Boundary Waters are pristine. Trump’s ‘Big, Beautiful Bill’ could pollute them forever
Reuters On Ireland’s peat bogs, climate action clashes with tradition