WHAT’S HAPPENING TODAY: Good afternoon and happy Friday, readers! With the help of our editor, Joe Lawler, we take a look in this letter at the market reaction to Israel’s strike on Iran.
In other news, the Environmental Protection Agency has raised biofuel requirements for transportation fuel, and the announcement looks like a win for the ethanol industry. Keep reading for coverage of a shift in Democrats’ rhetoric against Republican efforts to repeal most of the Inflation Reduction Act.
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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 said during the signing ceremony yesterday for resolutions to repeal California’s vehicle emissions waivers that the administration would not approve any wind projects. The administration has been a strong critic of wind energy, clawing back policies favoring wind power and pausing construction of wind projects.
“We’re not going to let windmills get built because we’re not going to destroy our country any further than it’s already been destroyed,” Trump said. “You go and look at these beautiful plains and valleys, and they’re loaded up with this garbage that gets worse and worse looking with time.”
“We’re not going to approve windmills unless something happens that’s an emergency. I guess it could happen, but we’re not doing any of them,” he added.
WHERE THINGS STAND AFTER ISRAEL’S STRIKE ON IRAN: Oil prices spiked last night on the news of Israel’s strike on Iran but so far have not risen as much as the worst cases imagined for this scenario.
International benchmark Brent Crude was up 6.5% on the day to near $74 a barrel as of the early afternoon, as traders priced in the risk from the attacks and the expected reprisals from Iran.
Israel has moved to halt some fossil fuel production out of fear of Iranian attacks.
Still, the market fallout has been less than projected, for example, by JPMorgan, which had said that oil could go to $120 a barrel on an Israeli attack on Iran.
Eyes on the Strait of Hormuz: The big risk that could send oil much higher is if there is military conflict around the Strait of Hormuz that limits shipping out of the Persian Gulf.
“In theory, Iran could halt tanker traffic in the Strait for a short period by attacking or threatening vessels transiting the narrow waters at the entrance to the Gulf,” market analyst John Kemp wrote in a note Friday. “But the most likely response is that the United States and its allies would organise an armed convoying system with U.S. and allied warships escorting tankers.”
Nuclear watchdog ready to travel to Iran: International Atomic Energy Agency director Rafael Grossi said he was prepared to travel to Iran to assess the extent of damage to nuclear facilities.
The nuclear site at Natanz was among the targets of the attacks. Grossi said the facility was hit but that there were no elevated radiation levels.
“I call on all parties to exercise maximum restraint to avoid further escalation. I reiterate that any military action that jeopardizes the safety and security of nuclear facilities risks grave consequences for the people of Iran, the region, and beyond,” Grossi said in a statement.
EPA RAISES BIOFUELS REQUIREMENTS: The Environmental Protection Agency pleased the ethanol industry with its new proposed Renewable Fuel Standard volume requirements for 2026 and 2027.
The agency said that it would require a total of 24.02 billion Renewable Identification Numbers (RINS) for 2026 and 24.46 billion for 2027, up from 22.33 billion for 2025. One RIN is equivalent to one ethanol-equivalent gallon of renewable fuel.
Also, foreign biofuels and feedstocks will only get 50% of the credit given to domestic sources. “We can no longer afford to continue with the same system where Americans pay for foreign competitors,” Administrator Lee Zeldin said in a statement.
The EPA also said it was removing credits generated by electric vehicle makers, eRINs, to further President Donald Trump’s goal of removing EV “mandates.”
Reactions: The biofuels industry reacted positively to the announcement, with the Renewable Fuels Association calling it a “very positive signal.”
So did Iowa Sen. Chuck Grassley, who said that, “Under the Biden administration, five biodiesel plants in Iowa closed or idled in part because RVOs were set too low. Today, President Trump and Administrator Zeldin turned the ship around, delivering a victory for American energy security and following through on their promise to support American agriculture.”
The key question: The major question looming over implementation of the standards is how the Trump administration will approach waivers to the requirements for small refiners.
The RFA said that “The entire supply chain is seeking certainty regarding EPA’s plans on SREs, and today’s proposal helps to clarify the agency’s approach moving forward.”
TESLA RAISES PRICES ON NEW MODELS: Tesla today launched new Model S and Model X vehicles in the U.S., but with a higher price tag.
The Model S is starting at $84,990 and Model X is at $89,990, which is a price increase of $5,000. Tesla said the vehicles offer new features, such as improved battery range and better aerodynamics.
A major concern for U.S. electric vehicles is range. The Model S is the longest-range Tesla, at up to 410 miles. Tesla is continuously competing with its Chinese counterparts, which have offered EVs with longer ranges and quicker battery charge times.
The announcement comes as Tesla stock dropped this month, following CEO Elon Musk’s public fallout with Trump.
A SHIFT IN DEMOCRATIC RHETORIC AGAINST THE GOP TAX BILL: The Examiner’s Ramsey Touchberry notes a new line of attack from Democrats as they try to prevent Republicans from repealing much of the Inflation Reduction Act via their reconciliation bill.
Instead of criticizing the proposed rollbacks of clean energy subsidies as bad for the climate, Democrats are arguing that they would slow energy production and thus raise prices, in effect using Republicans’ own energy rhetoric against them.
“They could get rid of this stuff because of their politics, but they would end up with electricity rates skyrocketing in their home states and a big job loss,” climate hawk Sen. Brian Schatz of Hawaii told Ramsey. “I think that’s certainly a stronger message in that corner of the political universe than whatever I want to say.”
Read the whole story here to learn more about the shift in messaging, and the GOP response.
TRUMP CANCELS BIDEN COLUMBIA BASIN SALMON RUN AGREEMENT: The Trump administration has canceled an agreement reached by the Biden administration relating to the restoration of salmon runs in the Columbia River Basin, a deal that involved several states and tribal entities and provided a path to removing dams on the Lower Snake River, the Seattle Times reports.
Trump said in a memo Thursday that the 2023 agreement “placed concerns about climate change above the Nation’s interests in reliable energy sources.”
The agreement was celebrated by power producers and other river users. But Democratic Sen. Patty Murray of Washington said that “Donald Trump doesn’t know the first thing about the Northwest and our way of life — so of course, he is abruptly and unilaterally upending a historic agreement that finally put us on a path to salmon recovery, while preserving stable dam operations for growers and producers, public utilities, river users, ports and others throughout the Northwest.”
Read the whole story here.
ICYMI – HOUSE LAWMAKERS INTRODUCED BILLS TO STREAMLINE REVIEW UNDER THE CLEAN WATER ACT: Republican lawmakers on the House Transportation and Infrastructure Committee yesterday introduced 15 resolutions to reform the Clean Water Act permitting process.
The committee said the bills will streamline environmental reviews, reduce regulatory delays, and provide more clarity. They seek to ensure that critical infrastructure projects can be built quickly. The EPA and U.S. Army Corps of Engineers review permitting under the CWA.
“The Clean Water Act was intended to protect water quality, support healthy communities, and balance the demands of economic growth across the United States,” Republican Committee Chairman Sam Graves of Missouri said.
“Over the years, however, this law has been abused and weaponized by some bureaucrats, activists, states, and others to delay permits and block critical infrastructure and energy projects for reasons that have nothing to do with ensuring water quality,” he said.
The bills are meant to provide clarity for those seeking permits in the manufacturing, agriculture, energy, and housing sectors.
RUNDOWN
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