Friday, February 23

Hot gas politics ahead- POLITICO

With help from Kelsey Tamborrino, Catherine Morehouse, Alex Guillén and Jordan Wolman

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— Gasoline consumers aren’t getting any relief, nor is the Biden administration.

— Democrats are expanding their price gouging fight beyond gasoline.

— The European Union may shelve its plans to phase out of Russian oil imports after Hungary had a conniption over the plan.

WELCOME TO FRIDAY! I’m your host, Matthew Choi. Congrats to American Conservation Coalition’s Chris Barnard for knowing the lyrics to the Australian national anthem: “In history’s page let every stage advance Australia fair!” For today’s trivia: What is the national bird of Bhutan? Send your tips and trivia answers to [email protected]. Find me on Twitter @matthewchoi2018.

Check out the POLITICO Energy podcast — all the energy and environmental politics and policy news you need to start your day, in just five minutes. Listen and subscribe for free at On today’s episode: Biden scraps Alaska, Gulf of Mexico offshore oil lease sales.

HOT GAS SUMMER: As drivers are preparing to hit the roads en masse for the Memorial Day weekend later this month, the Interior Department’s decision to scrap its remaining federal oil and gas lease sales for the year has set the stage for a season of bitter fighting over gasoline prices.

U.S. pump prices hit their latest all-time record on Thursday, averaging $4.418 per gallon. Prices have been climbing this week, surpassing the highs reached in March by nearly a dime. The previous time gas prices hit a record high was in 2008.

There’s no telling when the increases will end, since they are not closely tracking oil prices. Analysts largely attribute high gasoline prices with the country’s reduced refining capacity and the loss of Russian oil on the global market — and that’s likely to get worse as the summer driving season comes around. Seasonal measures to cut down gasoline costs, such as proposed gas tax holidays and the extended use of higher ethanol blended fuels, offer only limited relief for consumers. Critics of gas tax breaks say that move would only benefit the oil and gas industry and the impact from the Biden administration’s recent E15 waiver is largely limited to a few Midwestern states.

The criticisms already started piling on Thursday after the Interior Department’s announcement. Sen. Bill Cassidy called the move the latest in an “all-out assault on American energy, Louisiana Jobs, and families’ pocketbooks.” Sen. Joe Manchin dismissed it as “just awful.” A federal court in Wyoming is hearing oral arguments today on a lawsuit by the Western Energy Alliance against the administration for its delayed lease sales. (The pro-fossil fuel group sued the administration last year when President Joe Biden first put a hold on federal oil and gas lease sales.)

The Interior Department cited a lack of interest to justify canceling a lease sale in Alaska’s Cook Inlet, where production peaked in the 1970s at 230,000 barrels per day. Since then, it’s declined to just over 18,000 bpd, according to the Bureau of Land Management. DOI said it would not go through with lease sales in the Gulf of Mexico “as a result of delays due to factors including conflicting court rulings that impacted work on these proposed lease sales.”

TACKLING PRICE GOUGING: Sens. Elizabeth Warren (D-Mass.) and Tammy Baldwin (D-Wis.), along with Rep. Jan Schakowsky (D-Ill.), are expanding the scope of Democrats’ price gouging crusade. They introduced a bill Thursday that would authorize the Federal Trade Commission and state attorneys general to enforce a federal ban on “unconscionably excessive price increases” during abnormal market disruptions.

Though Democrats have recently discussed price gouging in the context of high gasoline prices, the Price Gouging Prevention Act would cover all goods along the supply chain. It would also appropriate $1 billion for FTC. Read the bill text here.

HYDROPOWER’S LONG WAIT: The hydropower industry is increasingly frustrated waiting for FERC to approve permits to boost hydroelectric resources — and efforts by Congress to ease those barriers have so far failed, Malcolm Woolf, president and CEO of the National Hydropower Association, told lawmakers on Thursday. Conventional hydropower generated about 80 gigawatts in 2021, and the National Hydropower Association estimated that the nation could unlock another 11.1 gigawatts of the resource through upgrading existing dams and powering others that don’t currently generate electricity.

NHA appeared before the House Energy and Commerce Committee to detail an “unprecedented” agreement between the industry, river conservationists and Native American Tribes to speed permitting for hydroelectric power plants that was laid out in a letter to Congress and the White House last month. The proposal appeared to receive bipartisan interest from House lawmakers on Thursday, but they also questioned why more progress hasn’t been made since the 2018 America’s Water Infrastructure Act was passed — which in part aimed to generate power from non-powered dams.

“Where’s FERC? I’d like to have FERC come testify and tell us what they’ve been doing or not doing” on dam licensing, said Rep. Fred Upton, (R-Mich.). “FERC ought to make this a priority to try and get it done, especially since we’re trying to help them do their job with the legislation that we passed in 2018.”

A FERC spokesperson said in a statement: “Chairman Glick fully appreciates the important role that hydropower plays in ensuring the safe and reliable operation of our grid. He is committed to working collaboratively with all stakeholders and resource agencies to ensure that license applications are processed in an efficient manner.”

UPDATING THE MINING RULES: Rep. Raúl Grijalva’s (D-Ariz.) bill to overhaul the nation’s 150-year-old law governing hardrock mining on federal lands got its first hearing in a House subcommittee Thursday, and opposition is coalescing.

Industry is lining up against the bill, which would impose the first-ever federal royalty fee on hardrock mining operations, switch from a claims-based to a leasing system for potential mines, establish a cleanup fund for mines and strengthen tribal consultation requirements.

Ashley Burke, a spokesperson for the National Mining Association, told POLITICO’s Jordan Wolman that upending mining law at a time of intense mineral demand is “not only counterproductive to securing our supply chains, but it will derail virtually everything this administration is trying to accomplish on electric vehicles and future energy technologies.”

She added the bill will only deepen America’s reliance on Chinese metals. And Debra Struhsacker, a founder of the Women’s Mining Coalition, told lawmakers at the hearing that the bill would “cede control of our mineral future to Russia and China.”

Grijalva is aiming to “fine tune” the bill before setting a date for a vote. Companion legislation sponsored by Sen. Martin Heinrich (D-N.M.) has not been given a date for a hearing in the Senate.

ME FIRST: GREENS MAKE THEIR CASE: Evergreen Action is joining opponents of the Commerce Department’s anti-circumvention probe into solar components from four Southeast Asian nations with a new memo today, shared exclusively with ME, that makes the case for an expedited preliminary determination. The memo points to the five criteria under the law that dictates what Commerce must investigate during administrative proceedings — which the group argues Auxin Solar’s case fails to meet on two points.

Namely, the memo points to the criteria that solar cell processing in the four countries must be “minor or insignificant” — which Evergreen argues Auxin itself contends it is not — and that the probe would be appropriate to prevent evasion. The group notes that “appropriate” is not qualified in the law, giving Commerce some discretion. The department “has the clear authority” to issue a preliminary determination now, the memo argues, adding Commerce should “expedite their decision, restoring stability for a vital industry and tens of thousands of workers across the country.”

Commerce Secretary Gina Raimondo has maintained, however, there is no discretion statutorily. If the International Trade Administration finds the case meets the threshold of the five criteria under the law, the department is “obliged to initiate, which is what we are doing, and we’re going to move as fast as we can,” she said this week.

DOE SEEKS INFO ON LONG-DURATION STORAGE: The Energy Department is seeking input for a $505 million long-duration energy storage initiative established by the bipartisan infrastructure law. The department announced a request for information Thursday on the initiative to lower the costs and increase the duration of the grid-scale technology.

“The ability to move cheaper, cleaner electricity where and when it is needed most is the linchpin to a reliable energy grid and critical to meeting President Biden’s clean energy goals,” said Energy Secretary Jennifer Granholm in a statement.

CHEDDAR WATCH: EPA on Thursday announced $254 million in grants to clean up contaminated “brownfields” at hundreds of sites around the U.S., which turn places like old coal mines and trash dumps into useful projects like solar farms.

Almost $180 million of that came from a $1.5 billion pot for brownfields included in last year’s bipartisan infrastructure package, which EPA Deputy Administrator Janet McCabe noted more than doubled EPA’s brownfields cleanup investments for this year.

GROUP WARNS OF REFINERY EMISSIONS: A dozen U.S. oil refineries in 2021 emitted the carcinogen benzene at rates exceeding EPA’s “action level” of 9 micrograms, according to a report from Environmental Integrity Project based on fenceline monitoring.

Refinery owners may have already acted to correct high emissions from last year, but EIP Executive Director Eric Schaeffer says that’s not enough. “EPA and the oil refining industry really need to do more to crack down … because the fenceline concentrations at too many refineries are high enough to pose a potential threat to neighborhoods that are close by.”

AN OIL SPLIT: A European phase out of Russian oil imports may not be in the cards after all – or at least not for this round of sanctions. European negotiators are considering removing the oil phase out from the sanctions package after days of deadlock with Hungary’s delegation, who have asserted the Central European country would face economic ruin if it stopped consuming Russian oil.

“It’s frustrating that we can’t move forward with the things that are agreed on. So why not do it like this, be pragmatic and then continue the energy discussion?” an EU diplomat told POLITICO’s Jacopo Barigazzi, Barbara Moens and Leonie Kijewski.

It would still be a major setback for European Commission President Ursula von der Leyen, who pushed for an oil ban to choke off one of Russia’s biggest revenue streams. Read more from POLITICO Europe here.

BUT IN THE LONG TERM: The European Union still has its eyes on shutting out Russian fossil fuel imports, including its 140 billion cubic meters per year of natural gas, Reuters reports. The European Commission is gearing up to release a €195 billion plan next week to quit Russian fossil fuels by 2027, but the draft provisions could change before then. It includes EU laws and guidelines for individual national governments.

— “House panel will investigate USPS plan to purchase 8.6 mpg trucks,” via The Washington Post.

— “Rising Diesel Costs are Straining U.S. Truckers, Shipping Operations,” via The Wall Street Journal.

— ”Biden rolls out investments amid Southeast Asia diplomatic push,” via POLITICO.


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