WHAT’S HAPPENING TODAY: Good afternoon and happy Thursday, readers! In today’s Daily on Energy we take a look at Environmental Protection Agency administrator Lee Zeldin‘s plans to roll back funding for climate projects and environmental justice. Plus, keep reading to find out what hurdles the Trump administration may face as it seeks to boost oil and gas production in Alaska.
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.
EPA LOOKS TO CLAW BACK $20B IN ‘GOLD BARS’: The Environmental Protection Agency is seeking to claw back around $20 billion in grant funding approved for climate projects under the Biden administration’s signature Inflation Reduction Act.
The details: In a video shared to X last night, EPA administrator Lee Zeldin claimed the funds were “parked” at a financial institution under a “scheme” to rush money to left-wing activist groups without oversight. The funding drew notice late last year when an EPA employee compared the funding to gold bars being thrown off the Titanic.
“EPA needs to reassume responsibility for all of these funds. We will review every penny that has gone out the door. I will be referring this matter to the inspector general’s office, and we’ll work with the Justice Department as well,” Zeldin said in the video. “The days of irresponsibly shoveling boatloads of cash to far-left activist groups in the name of environmental justice and climate equity are over.”
The funds: Zeldin explained that the EPA found roughly $20 billion worth of funds at an “outside financial institution” that were later awarded to eight different nonprofit organizations. Slightly under $7 billion of those funds had been awarded to the Climate United Fund, the administrator said. While Zeldin did not name the financial institution, documents reviewed by the Washington Post indicate that Citi Bank had an agreement with the Biden administration to release $20 billion to various nonprofit organizations and states.
The funds reportedly stem from the Greenhouse Gas Reduction Fund, a program created through the Democrat-passed IRA, the 2022 bill that provided hundreds of billions of dollars in subsidies for clean energy. A majority of the grants allocated through the program were issued last spring, with an obligation deadline of the end of September.
The EPA administrator has said the agency plans to “instantly” terminate the agreement with the bank and require the institution to return “all of the gold bars.” Zeldin may face some difficulties in retrieving the funds, as they appear to have already been issued and distributed by Citi Bank to the eight recipients.
Read more from Callie here.
PLUS…ZELDIN TARGETS ENVIRONMENTAL JUSTICE GRANT: This morning, Zeldin also took aim at what he described as a $50 million environmental justice grant from the Biden administration.
“I just cancelled a $50 MILLION Biden-era environmental justice grant to the Climate Justice Alliance, which believes ‘climate justice travels through a Free Palestine,’” the EPA administrator wrote in a post to X.
The grant: In December 2023, the EPA announced that the Climate Justice Alliance was set to receive $50 million to distribute subgrants for local environmental and climate projects. The funding was also allocated through the IRA.
The decision to cancel the grant does not come as a surprise, as it has been subject to backlash and criticism from Republican members of Congress for months, primarily over the group’s support for Palestine and a ceasefire in Gaza. In June 2024, Environment and Public Works Chairwoman Shelley Moore Capito accused the group of being “anti-police, anti-military, [and] anti-Semitic.”
“I think Americans would be pretty astounded to know we are using U.S. tax dollars to fund these groups,” she said at the time.
TRUMP MAY NOT BE ABLE TO UNLEASH ALASKAN OIL POTENTIAL, INDUSTRY WARNS: President Donald Trump may not be able to boost oil and gas development in Alaska as quickly as he would like.
A reminder: On his first day in office, Trump signed an executive order focused on boosting oil and gas development in Alaska, including in the Arctic National Wildlife Refuge (ANWR). The order is meant to unleash all of Alaska’s “natural resource potential,” including timber, seafood, and critical minerals. It specifically offered up support for future liquified natural gas projects in the state, prioritizing necessary permitting and pipeline construction to transport LNG within the U.S. and abroad.
The hurdles: With the administration’s sights set on maximizing oil and gas production, experts are now warning that it may be more difficult than expected as industry development in Alaska has been noticeably slower than other regions in the contiguous states.
“The market is just not in a state where a lot of operators are going to explore such an uncertain and high cost Arctic area when the market is already well-supplied,” Tom Liles with Rystad Energy told the Financial Times.
Current oil production in the state is reportedly at its lowest levels in nearly 50 years, with two new larger projects only expected to boost output by a little over 200,000 barrels per day. It may be difficult to swiftly increase this, as Mark Oberstoetter with research consultancy firm Wood Mackenzie told the outlet that there is a lot of “uncertainty” over how long permitting and approvals may take for future developments.
While Trump and his key energy and environment secretary appear to be in agreement about boosting development in the region, Liles explained the industry may also be subject to lawsuits related to eased drilling restrictions. “The presence of that kind of litigation in itself can create a lot of risk and maybe detract from the attractiveness of the policy announcement itself,” he told the Financial Times.
RUSSIAN REVENUES FROM OIL EXPORTS ROSE DESPITE NEW SANCTIONS: While the Biden administration sought to crack down on Russia and its energy sector last month, the country still saw an increase in revenue from oil exports.
The details: Commercial export revenues for Russian oil reportedly grew by $900 million month-to-month, jumping to a whopping $15.8 billion for January, the International Energy Agency said today in a new report obtained by the Wall Street Journal. The agency did note that recent sanctions from the U.S. have complicated “shipping and maritime compliance requirements” and undermined long-term oil production in Russia.
“Yet, new deceptive shipping practices to sustain these lucrative exports and collateral disruptions for global shipping could undermine these efforts,” IEA said.
As a result, Russia’s oil supply levels rose by 100,000 barrels per day to 9.2 million.
A reminder: In one of its final acts, the Biden administration issued sweeping sanctions on Russia’s oil industry, in an effort to reduce Moscow’s revenue from crude that has continued to be shipped by a so-called “shadow fleet” of tankers. The sanctions targeted over 180 vessels 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 targeted two major Russian oil producers, Gazprom Neft and Surgutneftegas, as well as their subsidiaries. The sanctions were also 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.
TRUMP PLANS TO AWARD A $400 MILLION CONTRACT TO TESLA: The State Department is planning on purchasing armored Tesla vehicles by the end of the year.
According to the State Department’s procurement forecast, it will spend $400 million over the next five years on armored Tesla vehicles. The award is set to begin in the fourth quarter. Drop Site reported yesterday that the department’s procurement forecast was modified in December, a month after Trump was elected.
The procurement forecast did not specify which Tesla model it would look to purchase, but the company’s cybertruck has military-like features. Tesla’s CEO Elon Musk is currently leading the administration’s Department of Government Efficiency, where the group is looking to reform government agencies by cutting spending and employees.
“I’m pretty sure Tesla isn’t getting $400M. No one mentioned it to me, at least,” Musk said on X today.
COAL-FIRED POWER PLANTS SURGE IN CHINA: The buildout of coal-fired power plants in China is at the highest level since 2015, with a substantial number coming online in the next couple of years, a new report by the Center for Research on Energy and Clean Air said.
The report said that China approved 66.7 gigawatts of new coal-fired power capacity in 2024. About 94.5 GW of new coal power projects started construction and 3.3 GW of suspended projects resumed construction in 2024, the highest level since 2015, the report said.
China’s clean energy sector continues to grow, with the country adding 356 GW of wind and solar capacity in 2024. The report also noted that the global coal fleet has shrunk by 9.2 GW in 2024.
NIGERIA RESIDENTS SEEK COMPENSATION FOR SHELL OIL SPILLS: The leader of the Ogale community in the Niger Delta, Godwin Bebe Okpabi, told Reuters that Shell needs to take responsibility for the decades of oil spills that have “destroyed” the people in the community’s way of life.
Members of the Ogale and Bille communities are suing Shell and its Nigerian subsidiary SPDC over decades of oil spills in the Niger Delta, which have damaged the environment and harmed the health of residents. The four-week trial takes place today at the Royal Courts of Justice in London.
“As we speak, people are dying in Ogale, my community,” Okpabi said. “It is sad that Shell will now want to take us through this very expensive, very troublesome trial, claiming one technicality or the other.”
Shell argues that most of the oil spills were the result of illegal third party interference, such as pipeline sabotage and theft.
A Shell spokesperson told Reuters that the litigation “does little to address the real problem in the Niger Delta: oil spills due to theft, illegal refining and sabotage, which cause the most environmental damage.”
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