WHAT’S HAPPENING: Good afternoon, and happy Friday, readers! In today’s Daily on Energy, Callie and Maydeen continue to cover the destructive fires burning throughout Los Angeles County. Our hearts go out to those who have lost their homes, belongings, or loved ones. Here is a list of evacuation centers for both people and animals in Los Angeles County.
Meanwhile, the newsletter takes a look at efforts by the Biden administration to crack down on Russian oil exports due to the continuation of the war in Ukraine. Also, continue reading to learn about what guidance the administration provided on the Clean Fuels Production Credit.
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: “We’re pretty much trying to keep what is left here standing and so we’re not laying down. We’re staying in our positions,” David Walters, a Los Angeles firefighter battling the wildfires, told NewsNation yesterday. He added that he slept on top of the hose bed the night before to stay ready to battle the fires.
“I’m very sorry for the residents that live here. We did try our best. But we got our butts kicked,” Walters said.
THE LATEST ON THE LA FIRES: Fires have continued to burn in Los Angeles County for several days, with county officials estimating that nearly 10,000 structures have been damaged or destroyed, and the death toll rising to 10.
Updated numbers on the fires: Yesterday evening, a new fire sparked near the neighborhood of Calabasas, named the Kenneth Fire. It has burned about 1,000 acres with 35% containment as of today. As of this morning, the Palisades Fire has burned 20,438 acres and is 8% contained. The Eaton Fire has burned 13,690 acres with 3% contained. The Hurst Fire has burned 771 acres with 37% contained. Lastly, the Lidia Fire has burned 395 acres and is 75% contained.
Areas in Los Angeles and Oxnard are under red flag warnings until today at 6pm PST. The high winds in Southern California this week have played a major role in fueling the fires.
Federal assistance: Yesterday, President Joe Biden promised the federal government will cover 100% of disaster assistance costs to California for the next six months.
“I’ve told the Governor and officials to spare no expense and do whatever they need to contain the fires and protect families,” Biden said on X.
Meanwhile, Los Angeles County officials announced yesterday there would be increased security efforts, including calling in the National Guard to help crack down on looting as people abandon their homes. The Los Angeles County Sheriff also began working on implementing a curfew in the areas impacted.
BIDEN TARGETS RUSSIAN OIL IN NEW SANCTIONS…PLUS, THE MARKET’S REACTION: The Biden administration is again cracking down on Russia over its war with Ukraine, targeting the country’s production and exports of oil.
The details: The Treasury Department unveiled new sweeping sanctions on Russia’s energy sector Friday in an effort to reduce Moscow’s revenue from oil that has continued to be shipped by a so-called “shadow fleet” of tankers.
The sanctions target over 180 vessels apart from this dark fleet of tankers that the administration said Russia has been using to evade existing sanctions, redirecting much of its oil to China or India. The sanctions also target two major Russian oil producers, Gazprom Neft and Surgutneftegas, as well as their subsidiaries. Additionally, the sanctions are meant to block two Russian liquefied natural gas projects, a large Russian oil project, and numerous officials who work within the nation’s energy sector.
These measures are meant to cut off these individuals and Russian entities from the U.S. financial system, blocking all property and interests in the United States. Administration officials have suggested these restrictions will end up costing the Russian economy billions of dollars every month.
Impact on prices: The Biden administration had been weighing such sanctions against Russia for weeks. In December, President Joe Biden was reportedly hesitant to issue the restrictions over fears that the decision would increase energy and gas costs around the world.
Hours before the sanctions were announced, international benchmarks for oil rose by around 3%. The jump in prices began to slow around midday, with Brent crude rising by 2.85% to $79.11 per barrel at around 12 pm ET. West Texas Intermediate crude was also on the upward trend, increasing by 2.85% to $76.03 per barrel.
Read more from Callie here.
TRUMP TO HAVE FINAL SAY OVER SUSTAINABLE AVIATION FUEL TAX CREDITS: President-elect Donald Trump will have authority over whether to finalize clean fuel tax credits as the Biden administration has only released short-term guidance for the subsidies.
The details: Today, the administration released the guidance for the Clean Fuels Production Credit – also known as 45Z – clarifying who and what fuels are eligible for the credit. But, as the administration opted not to finalize the rules, it has teed up Trump to either back or reject the plan.
The new guidance details that eligible fuel must be used for transportation – such as fuels used in highway vehicles or aircraft. Marine fuels that are also suitable for highway and aircraft vehicles are also eligible for the tax credit. It also details an annual emissions rate table with which eligible taxpayers can determine the lifecycle emissions rate of their clean fuel, which is required for calculating their total credit amount. Additionally, it notes the Treasury Department plans to later detail rules on how climate-smart agriculture practices for producing clean fuels can claim the credit. That, though, likely will not be proposed before Trump takes office.
The move puts many biofuel companies and investors in limbo as Trump has vowed to do away with any unspent green funding put forth under the Biden administration and the Inflation Reduction Act.
The new tax credit was first launched under the 2022 IRA and was set to go into effect at the start of this year. However, a lack of guidance from the Treasury Department has effectively stalled the program. The administration had hoped it would spur development within the industry, generating upwards of 3 billion gallons of clean fuels by 2030.
Some background: Trump has not explicitly targeted sustainable aviation fuel programs when discussing IRA repeal in the past, giving the industry hope that it will fit into his America First energy agenda.
In December, executives with renewable fuels producer Gevo told the Washington Examiner that clean jet fuels can help generate jobs, support rural economic development, while boosting clean infrastructure.
POWERING UP…CONSTELLATION ENERGY TO BUY RIVAL COMPANY IN NEAR-$27B DEAL: Constellation Energy has announced its plans to purchase Texas-based power company Calpine, forming the largest clean energy provider in the U.S.
The details: The two companies unveiled the cash and stock agreement today, which will bring Constellation’s total customer base to 2.5 million. In the deal, Constellation will be purchasing Calpine’s equity for around $16.4 billion through 50 million of its own shares and $4.5 billion in cash. Constellation will also be assuming around $12.7 billion of Calpine’s own debt. The entire value of the deal is estimated to be around $26.6 billion.
“This acquisition will help us better serve our customers across America, from families to businesses and utilities,” Constellation CEO and president Joe Dominguez said in a statement. “By combining Constellation’s unmatched expertise in zero-emission nuclear energy with Calpine’s industry-leading, best-in-class, low-carbon natural gas and geothermal generation fleets, we will be able to offer the broadest array of energy products and services available in the industry.”
The deal is expected to close within 12 months.
Why this matters: Constellation has said this deal will help create the “cleanest and most reliable” electricity generation portfolio across the entire country. Combined, the two companies have nearly 60 gigawatts of capacity from zero and low-emission sources, including renewables, battery storage, nuclear power, geothermal, and natural gas.
The expanded portfolio will likely make Constellation attractive to investors and other big tech companies that are looking to secure power for their artificial intelligence advancements. Microsoft already entered a deal with the power company last fall to secure energy generated at Three Mile Island once back online.
THE HOTTEST YEAR ON RECORD: The Earth saw its hottest year on record in 2024, with average global warming temperatures exceeding 1.5°C above pre-industrial levels – the threshold set by the 2016 Paris Agreement.
The details: Data compiled by the European Union’s Copernicus Climate Change Service (C3S) found the average temperature last year was approximately 1.6°C above pre-industrial levels. C3S insisted that one or two years above the Paris Agreement threshold may not mean international goals are fully out of reach. It warned, though, that at this current rate it would not be unexpected to see similar temperatures in the 2030s.
Experts have primarily attributed the warming to the burning of fossil fuels, encouraging an increased phase-out of energy sources like coal, oil, and natural gas to then be replaced by low-to-zero emission alternatives.
“There’s now an extremely high likelihood that we will overshoot the long-term average of 1.5C in the Paris agreement limit,” C3S deputy director Samantha Burgess told The Guardian. “These high global temperatures, coupled with record global atmospheric water vapour levels in 2024, meant unprecedented heatwaves and heavy rainfall events, causing misery for millions of people.”
Officials with NASA confirmed in their own analysis published Friday that global temperatures last year saw record highs. The agency also noted that the annual average may have exceeded the Paris Agreement threshold for the first time. However, NASA noted there may be “mathematical uncertainties” as they calculated the average temperature to be 1.47 °C above pre-industrial levels.
“Once again, the temperature record has been shattered — 2024 was the hottest year since record keeping began in 1880,” NASA Administrator Bill Nelson said. “Between record breaking temperatures and wildfires currently threatening our centers and workforce in California, it has never been more important to understand our changing planet.”
ICYMI – BLACKROCK DROPS OUT OF GREEN INVESTMENT GROUP: Asset manager BlackRock has exited from a major climate-investment group, marking yet another finance group to depart from climate initiatives ahead of the Trump administration.
BlackRock yesterday sent a letter to its clients announcing it would exit the Net-Zero Asset Managers (NZAM) initiative. Bloomberg obtained the letter, which stated that BlackRock’s membership in the group “caused confusion regarding BlackRock’s practices and subjected us to legal inquiries from various public officials.”
NZAM is an international group of asset managers that are committed to reaching net zero greenhouse gas emissions by 2050. The group was launched in 2020.
The future of climate finance groups looks grim, with many banks and financial institutions announcing plans to exit. In the past couple of months, the Net-Zero Banking Alliance has lost Morgan Stanley, Citigroup, Bank of America, Goldman Sachs, and Wells Fargo.
RUNDOWN
Washington Post Before and after satellite images of Palisades Fire show devastation in L.A.
New York Times The Roller-Skating Economist You Can Thank for Congestion Pricing
Inside Climate News Misinformation Spreads Like Wildfire on the Internet While LA Neighborhoods Burn