Overnight Energy & Environment

Energy & Environment — Russia war keeps oil prices elevated

The ongoing Russian war in Ukraine continues to keep gas prices high, the European Union slams the Kremlin on gas imports and a solar panel trade group says a Biden administration probe could devastate the industry. 

This is Overnight Energy & Environment, your source for the latest news focused on energy, the environment and beyond. For The Hill, we’re Rachel Frazin and Zack Budryk. Subscribe here. 

Gas prices stay high despite more US production

U.S. oil production is on the rise — but it may not have the immediate impact on gas prices that both Democrats and Republicans want.  

While the country is producing 300,000 more barrels of oil per day than it was in mid-March, Russia’s invasion of Ukraine — which sparked a boycott of Russian oil and increased demand for limited supply from elsewhere — is expected to keep prices high at least for the near future.  

Skyrocketing prices at the pump have been a political headache for the Biden administration, with the president repeatedly labeling the high prices “Putin’s price hike” while also blaming oil producers. Republicans, for their part, have hammered Biden and called for more domestic production. 

How we got here: Prices spiked following Russia’s invasion of Ukraine as the West turned away from Russian oil — cutting supply by about 3 million barrels per day, according to early estimates.  

To ease pain at the pump, the Biden administration announced that it would release 1 million barrels per day from the country’s strategic reserves and has also called on the industry to also extract more oil.

Too little, too late? Oil activity is rising in response to high prices, but the increases are not expected to fully offset increased demand.  

“We’re up 300,000 barrels a day, which isn’t bad, but it’s small, especially when you put it in the context of a million barrels per day coming from the [strategic petroleum reserve],” said Patrick De Haan, head of petroleum analysis at GasBuddy.  

He added that in the larger context, the production increases are a “good sign, but a small cog in a very big wheel.”  

U.S. production of oil was at 11.9 million barrels per day as of April 15, still somewhat lower than pre-pandemic levels. Meanwhile, the number of oil rigs — a signal of future production — has jumped to 695 compared to 438 just last year. However, De Haan described rig count as a “lagging indicator.” 

Read more here. 

VIRTUAL EVENT INVITE

The Hill’s Sustainability Imperative—Thursday, April 28 at 2 p.m. ET

Sustainability is not optional—it’s imperative, and everyone has a role to play. On April 28, The Hill will host its second annual festival convening policy leaders and practitioners in the sustainability ecosystem, featuring interviews with Energy Secretary Jennifer Granholm, Council on Environmental Quality Chair Brenda Mallory, actress Sigourney Weaver and moreRSVP today to save your spot.

Russian energy decision sparks European outrage

A top European official blasted Russian state-controlled energy company Gazprom’s decision to shut off natural gas to two NATO member nations in Europe, calling it “blackmail.” 

“The announcement by Gazprom that it is unilaterally stopping delivery of gas to customers in Europe is yet another attempt by Russia to use gas as an instrument of blackmail,” European Commission President Ursula von der Leyen said in a statement on Wednesday. 

“This is unjustified and unacceptable. And it shows once again the unreliability of Russia as a gas supplier.” 

What’s next? She said they were continuing to work with international partners to get access to alternative sources of natural gas and noted that a “coordinated EU response” was in the process of being crafted. 

“Europeans can trust that we stand united and in full solidarity with the Member States impacted in the face of this new challenge. Europeans can count on our full support,” von der Leyen said.  

The development comes as Gazprom alleged in a memo that Poland and Bulgaria were refusing to use Russian rubles to pay for natural gas, as Russian President Vladimir Putin has demanded, consequently forcing Gazprom to shut off access of fuel to the two countries, according to The Associated Press

The energy minister of Bulgaria, however, has pushed back against Gazprom’s claims that they had not paid for natural gas supplies since earlier this month. 

Last month, von der Leyen and President Biden announced that they would be setting up a task force meant to curb European reliance on fossil fuels from Russia.  

The U.S. and others are seeking to isolate Russia economically in rebuke of its invasion of Ukraine, now more than two months in. 

Read more from The Hill’s Caroline Vakil.

SOLAR GROUP CUTS FORECASTS, BLAMES BIDEN PROBE

The top solar energy industry group said Wednesday that it has cut its forecasts for deployment by nearly 50 percent, blaming the Biden administration’s decision to investigate Asian manufacturers amid allegations of dodging tariffs.   

The Solar Energy Industries Association (SEIA) said Wednesday it was dropping its installation projections 46 percent as a result of the probe. This would equate to the loss of 24 gigawatts worth of planned capacity, more than the industry has installed all last year.  

The Commerce Department in late March announced it would investigate whether solar panels manufactured In Malaysia, Cambodia, Vietnam and Thailand were part of an attempt by Chinese manufacturers to skirt tariffs. 

The department announced the probe in response to a petition by solar manufacturer Auxin Solar. The department had initially dismissed a similar petition from the group American Solar Manufacturers Against Chinese Circumvention.  

“If tariffs are imposed, in the blink of an eye we’re going to lose 100,000 American solar workers and any hope of reaching the President’s clean energy goals,” SEIA president and CEO Abigail Ross Hopper said in a statement Wednesday. 

“This would be a monumental loss for our nation, which has the potential to lead our clean energy future, with the right policies. Instead, the Commerce Department is on track to wipe out nearly half of all solar jobs and force a surrender on the President’s climate goals.”  

Read more about the projection here.

EVERYONE’S A SKEPTIC

This week’s bipartisan discussions around climate change are being met with skepticism from both environmentalists and Republicans.  

“It has been extremely clear throughout the last year of negotiations, especially around the scale of investments in the reconciliation package, that Republicans are not serious about supporting solutions at that scale,” said Sara Chieffo, vice president of government affairs at the League of Conservation voters.  

“I look at this effort with a lot of skepticism,” Chieffo said.  

Jamal Raad, executive director of Evergreen Action, described the talks as “a delay tactic by the Republicans to avert a climate-focused reconciliation bill,” saying he didn’t believe they were being held in good faith.  

Republicans themselves have also cast doubt as to whether the bipartisan talks will actually accomplish anything.  

“If it starts looking like a reconciliation or Build Back Better, then obviously Republicans will be out,” Sen. Kevin Cramer (R-N.D.), who attended the meeting, was quoted as saying on Monday. 

Sen. Shelley Moore Capito (R-W.Va.), who did not attend, called a potential deal a “long shot,” according to Politico.  

Meanwhile, Melinda Pierce, legislative director at the Sierra Club, expressed concern that the bipartisan talks could lead to “bad ideas” being put on the table.  

“A whole lot of bad ideas can come from that grouping on the supply side, [be] it LNG exports or pipelines, any of these supply side pieces,” Pierce said. 

ON TAP TOMORROW

  • Interior Secretary Deb Haaland will appear before the House Appropriations Committee for a hearing on Interior’s budget  
  • Energy Secretary Jennifer Granholm will testify before the House Appropriations Committee about DOE’s budget. She’ll also appear before the House Energy & Commerce Committee.
  • The Senate Energy and Natural Resources Committee will vote on the nomination of Kathryn Huff to be an assistant secretary of Energy for nuclear energy. It will also hold a hearing on the nominations of David Applegate to be Director of the United States Geological Survey and Carmen Cantor to be an assistant secretary, both of the Department of the Interior, and Evelyn Wang to be director of the DOE’s Advanced Research Projects Agency-Energy

WHAT WE’RE READING

  • Two million children at risk of starvation in Horn of Africa – U.N. aid chief (Reuters
  • Investors at top US banks refuse to back climate proposals (The Financial Times
  • ‘We want it back to what it was’: the US village blighted by toxic waste (The Guardian
  • Virginia Senate panel rejects Gov. Youngkin’s proposal to suspend gas tax (ABC8

ICYMI

And finally, something offbeat and off-beat: Be fruitful and terrify. 

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.  

VIEW THE FULL EDITION HERE

Tags Biden Oil drilling russian invasion of ukraine Vladimir Putin

The Hill has removed its comment section, as there are many other forums for readers to participate in the conversation. We invite you to join the discussion on Facebook and Twitter.

Most Popular

Load more

Video

See all Video