Overnight Energy & Environment — Presented by ExxonMobil — Biden may get reprieve with gas price drop

Welcome to Tuesday's Overnight Energy & Environment, your source for the latest news focused on energy, the environment and beyond. Subscribe here: thehill.com/newsletter-signup.

Today we're looking at how an expected gas price drop could be a relief for President Biden, the EPA's decision to lower past biofuel blending requirements but reject blending waivers, and a newly announced electric vehicle charging initiative.

For The Hill, we're Rachel Frazin and Zack Budryk. Write to us with tips: rfrazin@thehill.com and zbudryk@thehill.com. Follow us on Twitter: @RachelFrazin and @BudrykZack.

Let's jump in.

Gas price fall could be political win for Biden

The price of gasoline is expected to fall in the coming weeks, a shift that could give U.S. consumers shaken by inflation some relief - and that could also boost President Biden.

The White House has been hammered by Republicans over rising fuel prices, as the cost of gas has skyrocketed from its lows during the pandemic.

The stats: Crude oil hit a peak of nearly $85 per barrel on Oct. 26 but dropped all the way to about $66 per barrel on Dec. 1 amid fears of the new omicron variant of the coronavirus. On Tuesday, prices were back to about $72 per barrel as fears in markets ease over the extent of the danger from omicron.

Prices at the pump didn't drop immediately but have come down in recent days, averaging $3.35 per gallon, according to the American Automobile Association (AAA). That's down from $3.39 a week ago and $3.42 a month ago - which is likely not enough to provide much of a relief to U.S. drivers.

Falling prices: The federal government released a new projection on Tuesday showing that gas prices are expected to keep falling, averaging $3.13 per gallon this month, and falling to $3.01 per gallon in January.

It noted that its projection is facing "heightened levels of uncertainty" because of the coronavirus pandemic and specifically the omicron variant.

"We probably still have another week or two [in] which we'll see gas prices declining in most of the country," Patrick De Haan, head of petroleum analysis at price comparison website GasBuddy, Monday. "I would expect the decreases to continue, I think we probably have another 15 or 20 cents, maybe 25 cents a gallon for retail gas prices ... before we're kind of caught up."

He said that this is because the drop in gasoline prices weren't commensurate with the drop in crude prices yet.

Presidents, generally speaking, have little control over the price of gasoline, but that doesn't stop them taking the blame when prices are high. Biden has seen his approval rating hover at around 43 percent in recent polling.

The politics of it all: Republicans have seized on the high gasoline prices to attack Biden, and an analysis from left-wing think tank Data for Progress showed a strong correlation between Biden's disapproval rating and gasoline prices.

But, GOP strategist Doug Heye told The Hill that if prices drop, it's unlikely to change the party's strategy.

"Gas prices are part of a larger conversation on inflation," Heye said. "They'll be able to transition...to talking about the price of beef to used cars, new cars, anything that we've seen a real spike in prices over the past year."

Read more about the situation here.

A MESSAGE FROM EXXONMOBIL

Carbon capture and storage. One way we're helping reduce emissions.

Industry and power generation account for nearly two-thirds of global CO₂ emissions. At ExxonMobil, we're collaborating on some of the world's largest carbon capture and storage projects to help reduce industrial emissions at scale.

EPA issues mixed signals on biofuels

The Environmental Protection Agency (EPA) on Tuesday handed the oil and gas and biofuels industries mixed results in its program requiring biofuels to be blended into gasoline and diesel fuels.

The EPA proposed to reject all 65 requests it received from refiners for exemptions to biofuel blending mandates, but it also proposed lowering the total volume of biofuels required to be blended for the years 2020 and 2021.

The agency said it lowered the requirements to reflect what it saw as the actual rates of use.

The decision is expected to return blending credits to refiners, who could then use them to blend less in the future.

The biofuels issue pits two traditionally Republican constituencies - the oil and gas industry and farmers, whose products like corn are used to make biofuels - against one another.

"The administration also announced on Tuesday a separate boost for biofuel producers through the Agriculture Department.

It said it will make up to $700 million available in economic relief for the industry for pandemic impacts and add an additional $100 million to help increase the sale of fuels using higher blends of bioethanol and biodiesel.

Republicans were critical, but for differing reasons... "The Biden administration claims to care about addressing climate change but is giving big oil a huge break at the expense of the farmers in the Heartland who produce cleaner fuel. That doesn't add up," read a statement from Sen. Deb Fischer (R-Neb.), who represents a large agricultural constituency.

"The proposed requirements totally ignore congressional intent in the Clean Air Act to allow for waivers for small refiners facing hardship due to [Renewable Fuel Standard] mandates," Sen. Shelley Moore Capito (R-W.Va.) said in a statement. "This is more evidence of this administration's intent to destroy the oil and gas industry."

Read more about the announcement here.

CROSS-COUNTRY EV CHARGING

A coalition of dozens of U.S. electrical utilities on Tuesday announced plans to collaborate on a charging network for electric vehicles (EVs) with a goal of charging ports along all major U.S. travel corridors by 2023.

The project, the National Electric Highway Coalition, consists of 51 investor-owned electric companies, one electric cooperative, and the Tennessee Valley Authority, according to an announcement from the Edison Electric Institute (EEI) trade group.

The coalition has not set a specific target for the number of charging ports but said its goal is to back the construction of enough for EV owners to travel major corridors "with confidence" by the end of 2023.

The announcement comes as EEI has projected that up to 100,000 new charging ports will be necessary to support an estimated 22 million EVs on the road by the end of the decade. This would represent a more than tenfold increase from the about 2 million currently on the road.

Read more about the network here.

ON TAP TOMORROW

• The Senate Environment and Public Works Committee will hold a hearing on a wildlife recovery bill

• The Transportation and Infrastructure Committee will hold a hearing on reusing contaminated properties

A MESSAGE FROM EXXONMOBIL

WHAT WE'RE READING

• These Real Estate and Oil Tycoons Avoided Paying Taxes for Years, ProPublica reports

• U.S. has 'understanding' with Germany to shut Nord Stream 2 pipeline if Russia invades Ukraine -congressional aide, Reuters reports

• Florida seeks to scuttle environmentalists' Piney Point lawsuit, The Tampa Bay Times reports

• Pa. GOP denounces state environment board's effort to join regional greenhouse emissions tax credit plan, WFMZ reports

ICYMI

• Greenhouse gas emissions closely correlated with income: study

• Biden approving oil, gas drilling permits on public lands at faster rate than Trump: analysis

• Navy suspending use of WWII-era fuel storage complex above Hawaii aquifer

• Transitioning tribes to clean energy

• Schumer steps on the gas to move Biden agenda

• Mexico compares Biden electric car tax credits to Trump's tariff threat

And finally, something offbeat and off-beat: The vaccine Christmas songs have arrived!

That's it for today, thanks for reading. Check out The Hill's energy & environment page for the latest news and coverage. We'll see you tomorrow.