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EXPORT CURBS: Congressional Democrats look increasingly interested in supporting a curb on U.S. oil, coal, and natural gas exports as a means of lowering energy prices at home.
Democratic members of the Senate Energy and Natural Resources Committee probed witnesses about the prospect during a hearing on high energy prices this morning, with at least one making the case outright that the Biden administration should take a second look at the market impact of domestic producers shipping product overseas and that American consumers could benefit from added supply.
Chairman Joe Manchin of West Virginia led questioning on the implications of fuel exports, asking whether they “hurt consumers,” and Sen. Angus King, an Independent of Maine who caucuses with the Democrats, posited that the U.S. is “exporting our principle advantage in the world economy” by selling its LNG to China.
“We are literally subsidizing Chinese manufacturing by sending them our natural gas,” he said.
King added that he plans to introduce legislation “not to limit it, not to control it, not to cut it off, but at least have the Department of Energy to do a study when they’re going to approve an export license as to what the effect will be on domestic prices.”
Stephen Nalley, acting administrator of the Energy Information Administration, told the committee that restrictions on exports of LNG would “certainly” give the domestic market a surplus but would benefit neither U.S. consumers nor the international market overall.
“Prices would certainly drop in the U.S. market,” he said. “Internationally, they would skyrocket [and] lower prices in the U.S. would probably discourage more production.”
An export ban is one of two options that Manchin’s and King’s Democratic colleagues recently named among the series of “tools” that President Joe Biden should consider employing in order to counter high prices, especially of gasoline.
The other option they mentioned is a release from the Strategic Petroleum Reserve, the benefits of which Nalley said would be “relatively short-lived,” depending on the amount of crude oil released.
But relief is coming: A “reprieve” from high oil prices and tight supply could be “on the horizon” largely because U.S. producers are coming off the sidelines, the International Energy Agency said in a report this morning that came out before the hearing.
That expectation of light at the end of the tunnel suggests it might be premature for the Biden administration to act.
Oil supply leapt by 1.4 million barrels per day last month, IEA said in its monthly oil market report, mostly due to recovery from supply that was shut-in on the Gulf Coast during Hurricane Ida.
IEA expects a further boost of 1.5 million barrels per day before the end of this year, even as OPEC+ has ignored pleas from the U.S. and other major consumers to ramp up.
“The U.S. is now poised to provide the largest increase in supply of any individual country,” IEA said, as current prices provide a “strong incentive” to boost output even as operators stick to capital discipline pledges.
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ANALYSIS: EXPORT BAN WOULD RAISE PRICES: Global analytics firm IHS Markit is warning the Biden administration that a ban on exports of U.S. crude oil would likely increase gasoline prices rather than lower them.
An IHS analysis released this morning notes that a ban may lower the price of domestic crude, since the supply would remain here at home, but that it could “discourage production of both oil and natural gas with the result likely being a tighter world oil market — without lowering gasoline prices.”
“Without the ability to export U.S. crude, you enter a situation where there is a tighter global oil market or U.S. refineries are inefficiently processing types of crude that they are not configured for, or both,” said Kurt Barrow, IHS’s vice president of oil markets, midstream and downstream services.
REP. JARED HUFFMAN ON ‘PLUGGED IN’: TOO LATE TO ADD CARBON TAX TO BBB: Rep. Jared Huffman, Democrat of California, is asking the Senate to keep intact the House’s version of the Build Back Better Act because, “we are late in the game and need to hurry up and get this over the finish line.”
Huffman joined Josh and Neil Chatterjee on the latest episode of the “Plugged In” podcast, out this afternoon, to discuss a big week ahead in the House as it prepares to vote on the party’s climate and social spending bill.
He had just returned from a visit to COP26 in Glasgow where he joined Speaker Nancy Pelosi’s delegation as a member of her Select Climate Crisis Committee.
Huffman said the House’s climate and social spending bill is “far from perfect” but “keeps us in the fight” in the global effort to hold warming to 1.5 degrees Celsius by investing a record $555 billion in climate and clean energy initiatives, largely through expanded tax credits.
He expects the House to pass the legislation this week.
‘Too late to add carbon tax’: But Huffman warned Senate Democrats to avoid trying to add new pieces to the legislation, such as a carbon fee, that he doubts would be supported by Manchin and would only complicate the task of passing a bill through both chambers.
“Some senators with wonderful intentions want to revive other climate strategies,” Huffman said. “It’s just too late for that. There is a point of diminishing and even negative returns and I think we are there. I know our leadership and the president feel the same way. I hope the Senate does something the Senate rarely does, which is basically take a House work product, hurry up, and pass it.”
Huffman added he’s “concerned” that Manchin could look to delay the Senate passing the bill over rising inflation, which he argued the climate and social spending bill would help address rather than worsen.
“We are at risk of Sen. Manchin taking us down a very unfortunate direction,” Huffman said.
GERMANY SUSPENDS NORD STREAM 2 CERTIFICATION: Germany’s utility regulator suspended the certification process for the Russian-backed Nord Stream 2 natural gas pipeline, sending already-high European gas prices even further upward.
The regulator said today it determined that the pipeline’s Swiss-based operator had not properly set up a subsidiary organization under German law, adding that the process “will remain suspended until the main assets and human resources have been transferred to the subsidiary.”
Gas futures rose by 10% on the heels of the news, compounding contract prices that have already reached record highs this year.
BIDEN-XI REAFFIRM INTEREST IN CLIMATE COOPERATION: Biden and China’s President Xi Jinping discussed “the existential nature of the climate crisis to the world,” according to a U.S. readout of their first (remote) summit meeting last night.
Xi said climate policy could become a “new highlight” of cooperation with the U.S., according to China’s statement on the summit. Details are sparse on what cooperation looks like. But the reaffirmation by their country’s leaders of their joint interest in addressing the topic follows an agreement the U.S. and China reached at COP26 in Glasgow to work together this decade.
Paul Bledsoe, strategic adviser at the Progressive Policy Institute, told Josh he can envision the U.S. and China collaborating on carbon capture.
But he said the U.S. has to keep pressuring China to begin reducing emissions earlier this decade after Beijing refused to move up its target of doing so before 2030.
“If China stalls on cutting absolute emissions much longer, it risks a broader U.S. backlash including carbon tariffs supported by both parties in Congress that may complicate joint cooperation on other climate and even trade topics,” Bledsoe said.
ATTORNEYS GENERAL CALL ON CONGRESS TO ACT ON PFAS: Attorneys general from 18 states and the District of Columbia are asking the Senate Environment and Public Works Committee to pass bills regulating PFAS, or “forever chemicals,” saying that “legislation is still needed to ensure urgent needs are met in a timely fashion and with sufficient appropriations” beyond EPA’s recently announced “roadmap” to address the pollutants.
The coalition, led by New York Attorney General Letitia James, called on the committee to pass bills funding the remediation of PFAS in drinking water and to identify PFAS, which are used in a range of products from non-stick pans to waterproof clothing, as “hazardous substances” — something EPA said last month that it also intends to do using its regulatory authority.
SOLAR PETITIONERS CONSIDERING OPTIONS AFTER COMMERCE REJECTION: The group of American solar manufacturers who asked the Commerce Department to impose anti-dumping duties on solar cell and module imports from Asia said it is considering refiling its petition after the department rejected its initial one on the grounds that petitioners sought to remain anonymous.
The American Solar Manufacturers Against Chinese Circumvention released a statement yesterday, saying members are “evaluating all options available to us under the trade remedy and other laws, including but not limited to refiling a petition satisfying the Commerce Department’s concerns.” The statement indicates that petitioners declined to identify themselves, which Commerce said they must do in order for it to continue considering the petition.
The Rundown
Washington Post Australian Prime Minister Scott Morrison doubles down on coal after COP26
Politico EU and US face hard road to confront China’s dirty steel
Calendar
WEDNESDAY | NOV. 17
1:00 p.m. Green 2.0 will host a webinar to mark the release of its 2021 Transparency Report Card.
THURSDAY | NOV. 18
10:00 a.m. House Natural Resources Committee Republicans will host a forum entitled “Supporting African Communities: Highlighting International Conservation Efforts Worldwide.”
