WHAT’S HAPPENING TODAY: Good afternoon and happy Friday, readers! In today’s edition of Daily on Energy, Callie and Maydeen kick things off with Energy Secretary Chris Wright’s latest remarks on oil. While the market has plummeted in the course of a week, Wright remains optimistic that the U.S. will still see increased oil and gas production.
Across the pond, the U.S. was absent from the international agreement made in London on a global carbon tax to be imposed by the shipping industry starting in 2028. The agreement marks a major win for those looking to decarbonize the industry, but keep reading to find out where the tax still falls short for some parties involved.
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Plus, the Bureau of Land Management is reversing course on last-minute Biden administration environmental reviews for thousands of oil and gas lease sales across the West.
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: Fears are rising over the effects of dramatic cuts to agencies like the National Oceanic and Atmospheric Administration.
“Even if the funding were restored, or NOAA was able to hire additional staff, they’re likely going to hire folks with less experience and understanding of the issues,” David Troutt, the natural resources director for the Nisqually Indian Tribe, which relies on salmon harvest programs run by NOAA, told the New York Times. “I don’t know what the long term consequences of this might be.”
WRIGHT OPTIMISTIC ABOUT THE OIL MARKET: Energy Secretary Chris Wright remains optimistic about the oil market despite prices rapidly declining over the past week.
“You see a marketplace right now that is worried about economic growth and I think you are seeing some softening in oil prices from that,” Wright told Bloomberg Television. “I think that fear is misplaced.”
In the past week, the price of oil has quickly dropped as President Donald Trump has imposed sweeping tariffs and OPEC+ has said it would expedite output hikes. Oil prices this week hit a four-year low.
“We are going to end out in a better economic situation than we went into this Trump term, I think by a long shot,” Wright said. “We are going to see strong growth in American energy production — 100%.”
Wright told Bloomberg that he expects American oil producers to increase production despite the drop in oil prices.
As a result of the uncertain market fueled by Trump and OPEC+, the Energy Information Administration predicted yesterday that there will likely be less oil demand growth this year.
WHERE OIL STANDS: By this afternoon, prices still remained close to the $60 line, with both international and domestic benchmarks seeing small price increases from yesterday. As of around 2:30 p.m. EST, Brent Crude was up by around 2.12%, trading at $64.67 per barrel. West Texas Intermediate also saw an increase of 2.30% and was priced at $61.45 per barrel.
While up from yesterday, prices were still headed for a second weekly drop. Crude began to slightly recover on Wednesday, after Trump announced a 90 day pause on his sweeping tariffs. Though prices are still far from the low-to-mid $70s seen before the tariffs and OPEC+’s decision were announced last week.
If prices remain at or below the $60 line for an extended period of time, and tariffs on steel remain in place, industry leaders have warned that oil and gas producers in the U.S. will begin to feel pressure. Increased strain from lower prices could result in producers making cost cutting measures like job cuts, which could therein push oil prices back up.
NATIONS AGREE ON GLOBAL CARBON TAX FOR SHIPPING INDUSTRY: Shipping companies worldwide are set to face the first international carbon tax on the industry, as many of the largest shipping nations agreed to new rules, despite threats of retaliation from the United States.
The details: Members of the United Nations’ International Maritime Organization came to an agreement today on charging companies for greenhouse gas emissions released by their vessels in an effort to accelerate a transition to cleaner fuels.
The agreement will require ship owners to pay a fee if their carbon emissions exceed certain levels. This includes a minimum tax of $100 for every ton of carbon dioxide emitted over the lowest baseline. Those that exceed higher emissions thresholds will be forced to pay a $380 fee. Once adopted, the tax would go into effect in 2028.
The international levy is expected to raise upward of $40 billion by 2030, with the funds going toward an accelerated transition to cleaner alternatives like biofuels. There was no agreement made as to whether any of the funds would be diverted to developing countries to help facilitate their own domestic green efforts, as some had hoped.
U.S. Threats: The U.S. was notably absent from the agreement, as Trump leveled threats against members of the discussions held in London this week. In a letter circulated to several of the embassies of countries attending the talks, the U.S. said it would impose “reciprocal measures” to protect any U.S.-owned vessels from such a tax.
The letter, obtained by Politico, said that any international agreement would “unduly” and “unfairly burden” the U.S. and its people.
“Accordingly, we must be clear the U.S. rejects any and all efforts to impose economic measures against its ships based on GHG emissions or fuel choice,” the letter read.
It was not clear what the reciprocal measures would entail.
Read more from Callie here.
EPA TO END REQUIREMENTS FOR GREENHOUSE GAS EMISSIONS REPORTING: The Environmental Protection Agency has reportedly moved to end 15-year-old requirements for thousands of power plants, oil refiners, as well as other large fuel suppliers and polluters to report their greenhouse gas emissions.
The details: The Greenhouse Gas Reporting Program was in effect in January 2010, requiring 41 different categories of industry groups to report their emissions. This includes roughly 8,000 companies involved in electricity generation, ethanol production, lead production, petroleum and natural gas systems, underground coal mining, industrial waste landfills and more.
Now, though, the EPA has moved to remove reporting requirements for all 41 categories but one. The rule change, reported by ProPublica, would only require certain oil and gas facilities (around 2,300) to keep reporting emissions levels.
In mid-March, EPA administrator Lee Zeldin said the agency was reconsidering the program as it was not “directly related to a potential regulation.”
Some reaction: Environmentalists and climate activists have warned that ending the reporting program will severely hinder the government’s ability to accurately monitor toxic emissions.
“The public has a right to know how much climate pollution is being released into our air,” Edwin LaMair, a senior attorney with the Environmental Defense Fund, said in a statement.
HOUSE REPUBLICANS LAUNCH INVESTIGATION INTO GREENHOUSE GAS REDUCTION FUND AWARDEES: House Republicans on the Energy and Commerce Committee are launching an investigation into eight grantees of the Greenhouse Gas Reduction Fund.
House Energy and Commerce Committee Chairman Rep. Brett Guthrie, along with Reps. Gary Palmer and Morgan Griffith, sent letters to eight of the grantees that were awarded $20 billion by the fund. The program was established by the 2022 Inflation Reduction Act and is meant to support clean energy projects, specifically in low-income communities.
The lawmakers said the probe will evaluate whether the funding was awarded “fairly and impartially” and will determine how the federal funds are being used.
The letter was received by Climate United, Coalition for Green Capital, and Power Forward Communities, who are currently battling the EPA in court for attempting to cancel the grants. The EPA has argued that the Biden administration improperly distributed the funding by routing it through Citibank.
Climate United said in a statement: “We have always been committed to transparency in our work and will comply with this request to provide information that is available to the EPA.”
“Climate United looks forward to helping Congress and Americans better understand how our work reduces energy costs, creates jobs, and boosts demand for U.S. manufacturing,” they added.
The other grantees that received a letter from the lawmakers include Justice Climate Fund, Opportunity Finance Network, Inclusiv, Native CDFI Network, and Appalachian Community Capital.
BLM WALKS BACK ENVIRONMENTAL REVIEWS FOR THOUSANDS OF WESTERN OIL AND GAS LEASES: The Interior Department’s Bureau of Land Management is reversing course on plans to prepare environmental impact statements (EIS) for more than 3,000 oil and gas leases sold across seven Western states.
The details: In a notice published with the Federal Register today, BLM said it would be rescinding its intent to prepare the EISs announced in the final days of the Biden administration.
On January 16, the Biden-led BLM had said it would be preparing environmental reviews for 3,224 oil and gas leases located in Colorado, Montana, New Mexico, North Dakota, South Dakota, Utah, and Wyoming. At the time, the agency said it would be looking into the effects of greenhouse gas emissions related to the leases and other common impacts.
The agency’s decision this week to walk back the reviews builds upon the administration’s renewed support for the fossil fuel industry, supporting Trump’s day one executive orders that aimed to reduce barriers to new oil and gas development. While it will no longer be moving forward with a lengthy and time-consuming EIS process, BLM did say yesterday that it was “evaluating options” to remain in compliance with the National Environmental Policy Act.
The impact: The leases in question have faced challenges in the courts from environmentalists and climate activists for years, going as far back as the Obama administration. The Trump administration’s latest move likely will only fuel those legal efforts.
“Trump is vulnerable to lawsuits over this, but this administration does not seem to care about the law one bit,” Jeremy Nichols, a senior advocate with the Center for Biological Diversity, told E&E News. “It’s doing everything it can to avoid complying with the law so it can give away federal lands and minerals to the fossil fuel industry.”
TESLA STOPS TAKING ORDERS IN CHINA: Tesla has stopped taking orders for its Model S and Model X electric vehicles in China as a result of the sweeping tariffs Trump has imposed on China, Electrek reports.
Model S and Model X are exclusively produced in the U.S. and Tesla has exported the vehicles into China. However, Trump has launched a trade war between the U.S. and China, imposing 145% tariffs on Chinese goods. China has responded with 84% tariffs on American goods.
Electrek said the tariffs would nearly double the cost of U.S. vehicles imported into China such as Tesla’s flagship vehicles. The outlet said that Tesla has shut down Chinese customers’ ability to place new orders online for electric vehicles. It said that Tesla has a very low inventory of Model S cars and virtually no more Model X vehicles.
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