Gas price futility- POLITICO - POLITICO

3 months ago 61

With help from Karl Mathiesen and Catherine Morehouse.

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— Democrats are floating a whole smoragasbord of options to tackle high gasoline costs, but acknowledge many of them won't work.

— The House voted to revoke normal trade relations with Russia and Belarus, but questions over Russia's oil imports could complicate the measure passing through the Senate.

— President Joe Biden's pick to lead the DOE's nuclear energy office faces a smooth path to confirmation after getting bipartisan praise in the Senate Energy and Natural Resources Committee.

HAPPY FRIDAY! I’m your host, Matthew Choi. Congrats to John McClure of the Nebraska Public Power District for knowing former Interior Secretary Albert Fall was the first U.S. cabinet secretary to go to prison for his role in the Teapot Dome scandal. For today’s trivia: The Lincoln Center’s ballet theater is named for which New York City mayor? 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: Court allows Biden to use social cost of carbon – for now.

FINDING WHAT STICKS: Democrats are scrambling to figure out what to do about record-high gasoline prices, recognizing a major political liability that has only gotten worse with Russia’s war in Ukraine.

They are throwing everything up against the wall to see what sticks. The problem? None of their ideas would meaningfully bring down the price at the pump, which are mostly influenced by the whims of global oil markets. And it’s unlikely any of the ideas could win over the entire party, especially in the 50-50 Senate. Republicans won’t provide any votes as they consider gas prices and broader inflation their winning ticket to retake control of Congress.

Democrats in both chambers acknowledged their unenviable position in interviews with POLITICO’s Josh Siegel Thursday, but argued they owe it to voters to be seen as trying to ease prices, and at the minimum explain why forces outside their control are mostly to blame.

“It’s important to get caught trying,” Sen. Chris Coons (D-Del.) said. “We need to make as diligent, responsible, and effective an effort as we can to deal with the prices impacting people’s daily lives.”

But Sen. Tina Smith (D-Minn.) questioned whether Democrats are “at risk of giving people a false sense of hope that we are going to be able to take steps that are going to get prices down?”

“What we are doing is rightly shining a light on why prices are going up,” she said. “It’s a very good thing for us to have a conversation about.”

Democratic leaders are intensifying their efforts to attack both Russia and the oil and gas industry for high prices. Sen. Brian Schatz (D-Hawaii) said “we should be fighting for consumers, but frankly we need to remind consumers who is to blame. And it ain’t federal policymakers.”

Mimicking the White House, House Speaker Nancy Pelosi Thursday called the increase in gas prices the “Putin price hike.”

In comments to reporters, she accused oil and gas companies of anti-competitive behavior since crude oil prices have been decreasing this week but the price of gas at the pump has not, following a similar swipe from Senate Leader Chuck Schumer on Wednesday. Pelosi also unveiled Thursday a “use it or lose it” plan that would punish oil companies that aren’t actively using permits to drill on public land.

That follows other initiatives bandied about in recent weeks, including a federal gas-tax holiday and taxing large oil and gas companies’ windfall profits from surging crude prices. Some House Democrats are even floating providing payments or rebates to consumers, according to Punchbowl News

But none of these ideas have gained traction and all have potential drawbacks, Democrats admit. Suspending the 18.4 cent-per-gallon federal gasoline tax could undermine President Joe Biden’s infrastructure law, which partially depends on gas tax revenues, said Rep. Kathy Castor (D-Fla.).

Imposing a windfall profits tax has been tried “again and again and again,” said Sen. John Hickenlooper (D-Colo.) and it raises questions of fairness, along with potentially being at cross-purposes with Democrats’ push for shale companies to produce more.

And the entire effort, meanwhile, distracts from Democrats’ goal of moving the economy off fossil fuels to combat climate change.

“It’s all on the table right now to really do what’s best for consumers in the short term and then fast track clean energy and efficiency,” Castor said.

Thursday's national average gasoline price was at $4.289, down from last week's all time high of $4.331. Meanwhile, U.S. crude futures were back on the upswing Thursday, again breaking $104 midafternoon and settling at $102.98. They had been on the decline the first half of the week, coming down from nearly $110 over the weekend and settling at $95.04 Wednesday.

THE NEW NORMAL: The House voted to plunge the U.S.-Russia trade relationship back into its Cold War status, but the question of Russian oil could complicate things as it goes to the Senate, POLITICO’s Gavin Bade reports. The House measure would revoke normal trade relations with Russia and Belarus and comes on the heels of another bill the House passed last week banning imports of Russian fossil fuels (the Biden administration has already taken its own action to ban Russian energy imports).

But the House import ban never made it to the Senate, with Pelosi saying it was a “work in progress.” If Thursday’s measure revoking the normal trade relationship isn’t paired with the oil ban, Republican senators say they will amend it to include the import block, causing extra steps before it lands on Biden’s desk. Read more from Gavin.

HUFF’S PATH TO CONFIRMATION: Kathryn Huff had a smooth confirmation hearing Thursday, suggesting a straight shot to leading the Energy Department’s nuclear energy office. Democrats and Republicans on the Senate Energy Committee praised the nuclear engineering professor-turned-Secretary Jennifer Granholm adviser as a highly qualified candidate and reacted well to her call for U.S. independence from foreign uranium — much of which comes from Russia.

“It is critically important that we wean ourselves off of unstable, untrustworthy sources of our critical fuels — including uranium,” she said.

The Biden administration’s Russian energy import ban did not include uranium imports, which represents 16 percent of the U.S.’ foreign sourced uranium. POLITICO’s Catherine Morehouse has more.

SENATOR PRUITT? Trump-era EPA Administrator Scott Pruitt is mulling a run for the Senate, POLITICO’s Anthony Adragna, Natalie Allison and Burgess Everett report. Pruitt led the agency for the first year and half of the Trump administration, and his time in office was riddled with scandals and ethics concerns. He was previously attorney general for Oklahoma. CBS News first reported Pruitt’s potential Senate run.

GOP PROBES CLEMENTS’ ALLEGED CONFLICT OF INTEREST: Two GOP lawmakers are investigating a potential conflict of interest involving FERC Commissioner Allison Clements. In a letter first reported by E&E News, Reps. James Comer (R-Ky.), ranking member of the House Committee on Oversight and Reform, and Ralph Norman (R-S.C.), ranking member on the subcommittee for the environment, accused Clements of a “failure to identify [her] connection with the green industry,” which they say is “troubling.” Clements allegedly failed to disclose that her husband was hired by solar company Sol Systems at the end of last year.

Her spouse previously worked at independent power producer Sustainable Power Group, which Clements disclosed to the Office of Government Ethics in 2020. She pledged at the time not to participate in any proceeding that could have a direct impact on his compensation or employment. But she did not disclose his latest job change, according to the letter. “This lack of transparency is particularly troubling given recent efforts by FERC to block natural gas pipelines—making the United States more dependent on Russian energy,” Comer and Norman wrote.

The letter follows blowback from the GOP over FERC’s decision to update its pipeline policy statement for the first time since 1999, taking a closer look at the potential climate and environmental justice impacts of gas infrastructure. Clements and her Democratic colleagues argue the policy is an effort to make the permitting process more legally durable, following a series of legal blows against pipeline approvals in recent years. Democratic majority leaders on the committee and subcommittee did not immediately respond to requests for comment about whether they would move forward with an investigation. FERC also did not immediately comment.

DEMS BLAST KOCH: While corporations are engaging in their own de facto sanctions on Russia and pulling out of the country, Koch Industries announced it’ll be staying put. The company’s Guardian Industries operates two glass manufacturing facilities in the country, employing about 600 people. Koch said in a statement that withdrawing from the country would put its assets and employees in the control of the Russian state, which would “only put our employees there at greater risk and do more harm than good.”

But Schumer and Senate Finance Chair Ron Wyden said the move was “putting their profits ahead of defending democracy” and called on the company to suspend all Russian operations. “Senate Democrats are exploring legislation to add Russia to existing laws that already deny foreign tax credits for taxes paid to North Korea and Syria. American companies that continue to do business in Russia should not receive U.S. tax benefits that offset taxes paid to [Vladimir] Putin’s regime,” they said in a statement.

Koch Industries didn’t respond to ME’s request for further comment.

SUPERFUND ME: EPA is adding 12 new Superfund sites and proposing to create a further five. The new sites are spread throughout the East and Midwest, as well as one site in Oregon. Nearly two thirds of the sites are in “overburdened or underserved communities,” EPA Administrator Michael Regan said in a statement.

Among the five potential sites is a 19-mile stretch of New Jersey’s Hackensack River, POLITICO’s Ry Rivard reports. It would be New Jersey’s 115th — the most of any state. The site is pending a 60-day comment period.

FUSION SCHMOOZEFEST: The White House and Energy Department hosted a summit on all things fusion where Granholm announced a new agency-wide initiative to lead in the development of the budding technology and an initial $50 million funding opportunity for basic fusion energy research. National Climate Adviser Gina McCarthy said fusion has the potential to make significant strides in achieving Biden’s net-zero emissions by 2050 goal because it could provide “a virtually limitless” source of clean electricity and heat available when and where it’s needed. POLITICO’s Kelsey Tamborrino has more.

SWISS RE DROPS POLLUTER INSURANCE: One of the world’s largest reinsurers Swiss Re released an update on its oil and gas policy and it puts the industry on notice. The company will no longer sell policies for or invest in new field projects that start after this year, unless the parent companies are credibly aligned with net zero emissions by 2050. Further, companies that don’t sign up to that goal backed by the Science-Based Targets Initiative will be phased out of Swiss Re’s portfolio completely by 2030.

Act now: In the nearer term, from July 2023 the company won’t cover “oil and gas companies that are responsible for the world’s 10% most carbon-intensive oil and gas production.” From July this year they won’t insure, reinsure or invest in any companies with more than 10% of their production located in the Arctic — “Norwegian production is exempt.” Swiss Re also said it was halting all business in Russia this week.

Green groups are delighted: Global Coordinator of Insure Our Future Peter Bosshard said: “Swiss Re is one of the world's ultimate risk managers and the policy which it published today sends a strong message to fossil fuel companies, investors and governments: oil and gas operations need to be phased out in accordance with climate science or they may become uninsurable by the end of the decade.”

— “Macron Says France Must Regain Control of Some Energy Firms,” via Bloomberg.

— “UAE keen to cooperate with Russia on energy security, says UAE minister,” via Reuters.

— "Largest Federal Utility Chooses Gas, Defying Biden’s Clean Energy Goals," via The New York Times.

— “Oil Market’s Big Winners: ‘Little Guys’ Who Are Eager to Drill,” via The Wall Street Journal.

— “Kansas impasse shows green energy opposition has lost steam,” via The Associated Press.

— “Poland 'looking again' at role of gas in green energy transition,” via Reuters.

THAT’S ALL FOR ME!

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