Daily on Energy: High energy prices weigh down Biden

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PREOCCUPIED BY ENERGY PRICES: President Joe Biden gave the public a look last night at how high energy prices are weighing on him and complicating his agenda to limit the use of fossil fuels.

He’s also acknowledging there’s little he can do about it, at least in the short-term, meaning gasoline prices won’t come down until next year.

“I don’t see anything that's going to happen in the meantime that's going to significantly reduce gas prices,” Biden said during a CNN Town Hall event in Baltimore.

No good fix: Biden said he has few options for stemming high oil and gasoline prices since OPEC+ rejected his pleas to boost production. Releasing oil from the nation’s emergency Strategic Petroleum Reserve, a move usually reserved for supply disruptions like a national disaster, won’t make much of a difference either.

“We're about $3.30 a gallon most places now, when it was down in the single digits. And that's because of the supply being withheld by OPEC,” Biden said, later calling out Saudi Arabia specifically.

“I must tell you, I don't have a near-term answer,” he added. “I could go in the petroleum reserve and take out and probably reduce the price of gas maybe 18 cents or so a gallon. It’s still going to be above three bucks. It's going to be hard.”

Biden’s rhetoric is somewhat at odds with his administration’s public effort to show they are doing something, such as floating the possibility of deterring "unlawful" mergers in the oil and gas industry.

“To his credit, he recognized there are no good short-term options to address rising oil prices,” said Bob McNally, president of Rapidan Energy and a former top energy official to President George W. Bush. “The only one any president has is to ask OPEC for more oil, and he has been so far rebuffed.”

Not just gasoline prices: Biden suggested high natural gas prices are also worrying him, which the Energy Information Administration has warned could lead to higher home-heating bills this winter for people that rely on the fuel to stay warm.

“We anticipated that would be a problem, as well,” Biden said, touting as a potential solution a bill Congress passed in March to replenish funding to the Low Income Home Energy Assistance Program.

Biden sometimes appeared to conflate gasoline and natural gas prices.

But he later suggested that the long-term answer to offset higher commodity prices is to depend less on fossil fuels by investing more in clean energy alternatives.

Biden is siding with the International Energy Agency, which recently advised the way to address this mismatch between energy supply and demand long-term is to boost clean energy spending considerably, rather than increase production in fossil fuels. That solution might not help him now, though.

“The answer ultimately is -- ‘ultimately’ meaning the next three or four years -- is investing in renewable energy,” Biden said.

Welcome to Daily on Energy, written by Washington Examiner Energy and Environment Writers Josh Siegel (@SiegelScribe) and Jeremy Beaman (@jeremywbeaman). Email jsiegel@washingtonexaminer.com or jbeaman@washingtonexaminer.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.

BIDEN VOWS TO PROTECT $150 BILLION IN CLEAN ENERGY FUNDING: Biden last night endorsed an effort by Democrats to redeploy the $150 billion earmarked for CEPP into other climate policies in order to replace the emissions gap left by the demise of the clean electricity program.

As Josh reported yesterday, Democrats want to protect the $150 billion originally intended for CEPP and use it for a bevy of other policies, rather than lose that funding from the bill.

Biden agreed and suggested that key vote Sen. Joe Manchin of West Virginia, who opposed CEPP, would support increasing clean energy funding in the bill if it doesn't penalize fossil fuels — for example, by expanding green tax credits that form the core piece certain to remain in the bill.

“The fact of the matter is we can take that $150 billion, add it to the $320 billion that's in the [bill] that he's [Manchin] prepared to support for tax incentives,” Biden said at the CNN Town Hall.

"I'm going to add it to be able to do things ... that don't directly affect the electric grid in the way that there's a penalty, but allow me to spend the money to set new technologies in place," he added.

PELOSI: DEAL ‘VERY POSSIBLE’: Upon her return to Capitol Hill from a meeting at the White House this morning, House Speaker Nancy Pelosi told reporters that a deal was within reach on Democrats’ climate and social spending package, the Washington Examiner’s Kate Scanlon reports.

Pelosi met with Biden and Senate Majority Leader Chuck Schumer, who joined virtually, as Democrats seek an agreement on the spending package between their progressive and centrist members.

“We had a very positive meeting this morning,” Pelosi said. “I'm very optimistic.”

Pelosi did not shed light on when the deal can be expected or when there would be a vote.

Asked if centrist holdouts Manchin and Sen. Kyrsten Sinema of Arizona were on board for a deal, she replied, “that’s up to the Senate and the White House to decide.”

REGULATORS CALL FOR CLIMATE DISCLOSURES, BOOSTING BIDEN AGENDA: A panel of top U.S. regulators is declaring climate change a threat to financial stability and recommending federal agencies require companies to disclose the risks they face from global warming, as well as their emissions, as Josh reported last night.

The Financial Stability Oversight Council — which comprises top officials at financial regulatory agencies, such as the Federal Reserve and Securities and Exchange Commission, and is chaired by Treasury Secretary Janet Yellen — issued a report concluding climate change poses an "emerging and increasing" risk to financial stability.

Along with disclosure, the council also recommends regulators require banks to use scenario analysis as a tool for assessing climate-related financial risks.

The Fed is developing a program of scenario analysis to evaluate the potential economic and financial risks posed by different climate outcomes, chairman Jerome Powell said in a statement last night, in which he endorsed the report for recognizing “climate change poses significant challenges for the global economy and the financial system.”

The council stops short of recommending stress tests that would measure banks' exposure to climate change-related risks, instead calling for scenario analyses, a lower threshold, analysts say.

A first step Biden can tout at Glasgow: The report marks the first time U.S. regulators have cited climate change as a systemic financial risk, which government officials said sends an important signal to other countries ahead of the U.N. climate summit in Glasgow, Scotland, later this month.

“It’s a critical first step forward in addressing the threat of climate change and it will by no means be the end of this work,” Yellen said at the council’s meeting last night.

The council’s recommendations could lay the groundwork for Biden administration agencies to issue regulations requiring disclosure, which the SEC is already working on.

But liberal climate change activists said the council’s report failed to push regulators to discourage banks lending to companies that produce large amounts of fossil fuels that are the main cause of global warming.

"When the Biden administration's entire climate agenda is hanging by a thread and Glasgow is around the corner, it's a bit baffling they didn't go further," Justin Guay, director of global climate strategy at Sunrise Project, told Josh.

HOW TO AVOID NUCLEAR CLOSURES CAUSED BY CEPP’S DEMISE: Democrats’ stripping CEPP from their reconciliation bill will result in 20% of all existing U.S. nuclear generation retiring between 2025 and 2030, according to new modeling from the Princeton University Zero Lab we highlighted in yesterday’s edition.

While CEPP is intended to increase the growth of wind, solar, and other zero-carbon resources, it could also have prevented existing carbon-free facilities, such as nuclear plants, from closing prematurely.

In a blog post responding to that study, Zeke Hausfather of the Breakthrough Institute said Democrats can avoid that outcome if they extend production tax credits for nuclear already included in the bill from five years as currently planned to the full 10-year period covered by the legislation.

“While this would not be identical to the mechanism in the CEPP – it would incentivize utilities for keeping existing reactors open rather than penalizing them for closing – the net effect would likely be similar,” Hausfather wrote.

VOGTLE NUCLEAR EXPANSION PROJECT DELAYED...AGAIN: Georgia Power is delaying its projections for bringing the Unit 3 and Unit 4 reactors at Plant Vogtle into service, another in a series of setbacks for the project in recent years.

The company said Unit 3 is estimated to be put in service during the third quarter of 2022, while Unit 4 is expected to be online in the second quarter of 2023, representing a three-month shift for each unit.

The delay is needed to deal with construction challenges and to allow more time for testing to ensure quality and safety, the utility said.

CALIFORNIA PROPOSES EXPANDED OIL DRILLING BUFFER AFTER SPILL: The state's oil and gas regulator proposed a ban on new oil drilling within 3,200 feet of all schools, homes, and hospitals, the Washington Examiner’s Asher Notheis reports.

At 2,000 feet, Colorado currently has the largest buffer zone requirement in the U.S. Environmental groups originally sought a less drastic 2,500-foot buffer between new oil drills and communities that still would have exceeded Colorado's restrictions.

COUNTRIES ASK IPCC FOR MORE SYMPATHY ON FOSSILS -- LEAKED DOCS: A series of leaked documents reviewed by BBC News reveals major governments urging the UN’s Intergovernmental Panel on Climate Change to take it a bit easier on fossil fuels in a report assessing the need for measures to curb climate change.

A senior government official in Australia, the world’s second-largest coal exporter by weight in 2019, reportedly rejected IPCC’s determination about the necessity of closing coal-fired power plants in a submission commenting on the panel’s energy transition recommendations.

The comments also revealed an adviser to the Saudi oil ministry saying that “phrases like 'the need for urgent and accelerated mitigation actions at all scales…' should be eliminated from the report.”

The leak, provided to BBC by Greenpeace UK’s investigative outfit Unearthed, included more than 32,000 submissions, and the outlet notes that submissions “are overwhelmingly designed to be constructive and to improve the quality of the final report.”

CALIFORNIA’S HISTORICALLY DRY YEAR: California is emerging from its driest 12-month period in nearly a century, and catching its reservoirs up will be difficult even if it sees a historically wet winter, Jeremy reports for our latest magazine.

The state experienced its lowest level of statewide precipitation since 1924 during Water Year 2021, which spanned Oct. 1, 2020, to Sept. 30, driving the dry conditions that fuel wildfires and simultaneously straining resources to make fighting them more difficult.

In his fourth emergency drought action in seven months, on Oct. 19, Gov. Gavin Newsom expanded his drought emergency proclamation to the remaining eight counties to cover the entire state.

NATURAL RESOURCES GOP FORUM ON AFGHANISTAN’S MINERALS: Republicans on the House Natural Resources held a forum this morning to discuss the critical mineral market and the threat of China expanding its share of it through prospective deals with the Taliban.

Committee Ranking Member Bruce Westerman warned the United States’s absence from mineral-rich Afghanistan gives China an in, saying it “is no stranger to participating with unsavory characters, working in insecure and unstable environments to exploit natural resources ... that usually end up in the US marketplace.”

It’s far from clear, though, that China would have any interest in working with the Taliban.

GOP SENATORS TARGET GAO REPORT ON INVESTMENT AND CLIMATE CHANGE: Sen. Pat Toomey, a Republican of Pennsylvania, and Ron Johnson, a Republican of Wisconsin, are calling on the Government Accountability Office to withdraw a report recommending that the Federal Retirement Thrift Investment Board — a governmental agency that administers the TSP retirement plan for federal employees — evaluate retirees’ investment offerings for climate change risks.

The senators took issue with source material, used in composing the GAO report, that was developed by a Market Risk Advisory Committee subcommittee on climate-related market risk, arguing that the subcommittee’s analysis was rife with conflicts of interest and violated federal law governing advisory committee operations.

“The subcommittee is composed of a number of individuals who represent entities poised to benefit financially from the creation of a climate risk regulatory structure, such as asset managers, data providers, and Wall Street banks,” the senators wrote to GAO.

BIDEN’S NOMINEE TO HEAD INTERIOR’S FWS: The White House announced Martha Williams as Biden’s nominee to be the Interior Department’s director of Fish and Wildlife Services, of which she is currently the principal deputy director.

The Rundown

Wall Street Journal Natural-gas prices fall from peak as warm autumn buoys stockpiles

Washington Post China’s overseas coal ban raises pressure on developing countries to go green

Reuters Plastics to outpace coal's greenhouse gas emissions by 2030 - report

Bloomberg Exxon restarts Wyoming carbon capture project after 2-year delay

Calendar

WEDNESDAY | OCT. 27

10 a.m. 406 Dirksen. The Senate Environment and Public Works Committee will hold a business meeting and hearing to consider several EPA and SCRC nominees.

THURSDAY | OCT. 28

9 a.m. The House Oversight Committee will hold a hearing to “Examine the Role of the Fossil Fuel Industry in Spreading Climate Disinformation and Heating the Planet.” The CEOs of ExxonMobil, Chevron, BP America, and Shell will testify, along with the presidents of the American Petroleum Institute and U.S. Chamber of Commerce.

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Tags: Energy and Environment, Daily on Energy

Original Author: Josh Siegel

Original Location: Daily on Energy: High energy prices weigh down Biden

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