With help from Alex Guillén
Programming announcement: Starting June 27, Morning Energy will be exclusively available to POLITICO Pro subscribers. Subscription benefits include access to the must-read daily Morning Energy newsletter and POLITICO Pro’s exclusive suite of nonpartisan news, real-time intelligence, in-depth analysis, bill tracking and research tools. Please visit our website to continue receiving Morning Energy and to learn more about a POLITICO Pro subscription. Additionally, on June 27 POLITICO will launch Power Switch, a new energy- and climate-focused consumer newsletter. This will be a high-level newsletter focused on the larger conversation around the politics and policy of the energy transition.
— President Joe Biden appears close to making a decision on whether to travel to Saudi Arabia, but energy wouldn’t necessarily be the biggest item on the agenda if he does.
— The House Natural Resources Committee takes up conservation and water bills this week, including New Mexico Democrats’ water security legislation.
— The House Climate Crisis Committee looks into the states’ role in monitoring methane emissions.
HAPPY MONDAY! I’m your host, Matthew Choi. Sadly, no one knew that U1 is the longest line on the Hamburg U-Bahn. For today’s trivia: Which EU member state has Catholicism established as its state religion? 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 politico.com/energy-podcast. On today’s episode: The SCOTUS climate ruling that could hamstring federal agencies?
$5 IS HERE: Gasoline hit $5 per gallon on a national basis for the first time ever on Saturday, according to the American Automobile Association, keeping the pressure on the Biden administration. The White House has been considering meeting with Saudi leadership, a diplomatic move that could draw more oil into the market and cool off the rally in energy prices that have been a major inflation driver.
President Joe Biden, for his part, told reporters Saturday that he hasn’t yet made a decision on whether to pay the Saudis a visit this summer. As much as gas prices are hurting Democrats, Biden is also facing pressure to shun Saudi Arabia for its human rights record and the killing of Washington Post journalist Jamal Khashoggi. Speaking with reporters at the end of the Summit of the Americas on Saturday, Biden said any meeting in Saudi Arabia would dive into areas beyond oil and focus on security issues.
But even if he can secure additional barrels beyond the modestly higher increase the Saudis pushed under the recent OPEC decision, tight refinery capacity is likely to prevent any significant new supply from reaching motorists. White House Council of Economic Advisers Chair Cecilia Elena Rouse told CNN Friday the president was looking into ways to ramp up refinery capacity, and considering “what he can do administratively, whether that’s working with oil companies and refineries asking them, ‘We recognize your back capacity challenges — what can we do to help you maintain your refining capacity and bring more oil online?'”
Still, Americans aren’t letting high prices keep them off the road, POLITICO’s Ben Lefebvre reports. David Goldwyn, head of energy consulting agency Goldwyn Global Strategies, told Ben he didn’t expect drivers to start seriously curbing their driving until gas hits the $6 or $7 per gallon mark. Drivers are largely opting to cut back on retail purchases instead. Many of the factors impacting high prices, from the war in Ukraine to the loss of global refinery capacity to the summer driving season, are temporary and volatile, making it difficult to predict long-term price moves — and making it less appealing for consumers to make drastic decisions to cut down on long-term costs like switching to electric vehicles.
Related interesting take: “High Oil and Gas Prices Test Drive a Global Carbon Tax,” from The Wall Street Journal’s Rochelle Toplensky.
ICYMI, a notable quotable from Biden: “Exxon made more money than God this year,” Biden said Friday. “They have 9,000 permits to drill. They’re not drilling. Why aren’t they drilling?”
“They’re buying back their own stock,” he continued, “which should be taxed quite frankly. Buying back their own stock and making no new investments.”
BILLS TO CONSIDER: The House Natural Resources Committee has a lot of legislative action on its plate this week. The National Parks, Forests and Public Lands subcommittee holds a legislative hearing Tuesday on eight public lands bills, with Lena McDowall, deputy director of Management and Administration for the National Park Service, testifying.
The full committee has a mark up on Wednesday on 11 bills on issues ranging from the legacy of Indian boarding schools to lighting up the Gateway Arch in the colors of the Ukrainian flag.
The Water, Oceans and Wildlife subcommittee will have a legislative hearing on Thursday to discuss a number of water works and environmental bills, including Rep. Melanie Stansbury’s water data collection bill, which would centralize state, local and federal water data. The bill is a key component to New Mexico Democrats’ “aquabus” package on water security. Stansbury will testify at Thursday’s hearing.
One of the bills in Thursday’s hearing, the Delaware River Basin Conservation Reauthorization Act of 2022, will also go under the microscope in front the of the Senate Environment and Public Works Committee on Wednesday, when the committee has a legislative hearing on four coastal conservation bills.
WATER IN ENERGY: The Senate Energy Committee will also be going into water security issues this week with a hearing Tuesday on how to address the drought in the western U.S. The committee’s Water and Power subpanel had a legislative hearing on a spate of water security bills last month, including Stansbury’s water data bill.
The committee will also vote Tuesday on three nominations: David Applegate to be director of the U.S. Geological Survey, Carmen Cantor to be assistant secretary of the Interior for Insular and International Affairs and Evelyn Wang to lead DOE’s ARPA-E.
METHANE MADNESS: The House Climate Crisis Committee convenes Tuesday to discuss state efforts to cut down methane emissions. New Mexico Gov. Michelle Lujan Grisham and Wyoming Gov. Mark Gordon will both testify. The House Science Committee had a similar hearing last week that focused on ways the federal government could help monitor methane emissions.
EYE TO EUROPE: The House Foreign Affairs Europe, Energy, the Environment and Cyber Subommittee meets Thursday to discuss ways the U.S. can support European energy security. Last week’s explosion at the Freeport LNG terminal in Texas could pose a wrinkle in the Biden administration’s plans to secure 15 billion cubic meters of liquefied natural gas to Europe, POLITICO’s Ben Lefebvre reported. Thursday’s hearing will include testimony from Andrew Light, assistant secretary of Energy for International Affairs, Harry Kamian, principal deputy assistant secretary of State in the Bureau of Energy Resources, and Jake Levine, chief climate officer at the U.S. International Development Finance Corporation.
HEATPUMPS FOR HOUSES: The Biden administration is targeting heat pump accessibility, building off of last week’s clean energy technology use of the Defense Production Act. The administration will be rolling out new gas furnace energy efficiency standards this week in a bid to lower home heating and cooling costs, and holding meetings between senior White House officials with lawmakers to advance legislation offering tax benefits for heat pumps, including Sen. Amy Klobuchar‘s HEATR Act (S. 4139 (117)) and Sen. Ed Markey‘s ICEE HOT Act (S. 4144 (117)), a White House official told ME.
EPA UNION PUSHES BACK ON POLYMET IN COURT: The Midwest chapter of EPA’s biggest union last week told the Minnesota Supreme Court that it should force state regulators to carry out a new notice-and-comment process on permits for the contentious PolyMet copper and nickel mine.
Lower state courts previously found the Minnesota Pollution Control Agency pressured EPA to withhold submitting written versions of its critical comments, which would have been publicly disclosed. But those courts did not find that to be unlawful, and thus haven’t ordered an entirely new public comment process. In an amicus brief last week, AFGE Local 704 argued before the state’s top court that the only way to fix the error is a new notice-and-comment process.
Re-issuing the permit without those steps “is tantamount to claiming that a boxing match is fair if you tie your opponent’s hand behind his back—so long as you admit to the deed after the fact,” the union argued.
ICYMI ON FERC’S RADAR:POLITICO’s Catherine Morehouse has the rundown on FERC’s open meeting this week, where the commission will dive into rules holding up the queue for more renewable generation to get on the grid and the impact of extreme weather on transmission line performance.
A CUSTOMER FOR RUSSIA: Sri Lanka may be forced to turn to Russia for oil as it reels under a debt crisis making basic goods including food and fuel scarce, the country’s Prime Minister Ranil Wickremesinghe told the AP. With Europe working to end its Russian oil purchases and China’s frequent Covid lockdowns, Russia has been eagerly seeking open buyers to keep its output afloat.
“If we can get from any other sources, we will get from there. Otherwise (we) may have to go to Russia again,” Wickremesinghe said.
“Sometimes we may not know what oil we are buying,” he added. “Certainly we are looking at the Gulf as our main supply.” Read the full interview here.
When asked last month, Energy Secretary Jennifer Granholm wouldn’t rule out secondary sanctions on buyers of Russian oil in a bid to starve out the country’s cash cow. Doing so could also increase tensions with India and China. Granholm herself was sanctioned by Moscow last week.
— ME FIRST:Trisha Miller is joining the White House Climate Policy Office as senior director for industrial emissions. Miller leads Elevate Energy’s policy operation and was previous senior director at Breakthrough Energy. She was also on the Energy Department agency review team for the Biden transition.
— ”NW Natural booklet for schoolkids becomes flashpoint in climate change debate,” via The Oregonian.
— “EPA advisers going back to the science in ozone review,” via POLITICO.
— ”Climate change a bigger threat than war, Fiji tells security summit,” via The BBC.
— “Mexico Takes Aim at Private Companies, Threatening Decades of Economic Growth,” via The Wall Street Journal.
THAT’S ALL FOR ME!