Overnight Energy & Environment — Biden calls for gas prices investigation
Welcome to Wednesday’s Overnight Energy & Environment, your source for the latest news focused on energy, the environment and beyond. Subscribe here: thehill.com/newsletter-signup.
Today we’re looking at President Biden asking for an investigation of potential illegal activity in connection with gas prices, the official restart of oil and gas lease sales and the confirmation of the newest FERC commissioner.
Let’s jump in.
Biden seeks gas prices probe
President Biden is asking the head of the Federal Trade Commission (FTC) to look into whether oil companies are illegally increasing prices as consumers face high costs at the pump.
“The Federal Trade Commission has authority to consider whether illegal conduct is costing families at the pump. I believe you should do so immediately,” Biden wrote in a letter to FTC Chairwoman Lina Khan on Wednesday.
“Prices at the pump have continued to rise, even as refined fuel costs go down and industry profits go up,” he added. “In the last month, the price of unfinished gasoline is down more than 5 percent while gas prices at the pump are up 3 percent in that same period. This unexplained large gap between the price of unfinished gasoline and the average price at the pump is well above the pre-pandemic average.”
What’s the issue? Biden said that oil and gas companies in the U.S. are generating significant profits from the higher cost of energy, noting that two of the largest oil and gas companies in the U.S. are on track to nearly double their net income over 2019.
They have announced plans to engage in billions of dollars of stock buybacks and dividends this year or next,” he wrote.
Gas prices rose 6.1 percent in October, according to the Labor Department, with prices about 24 percent higher than they were during the same month in 2019.
“The bottom line is this: Gasoline prices at the pump remain high, even though oil and gas companies’ costs are declining,” the president wrote.
The background: Biden has caught flak from Republicans over gas prices, which are rising ahead of the holiday season, when Thanksgiving travel is expected to return to near pre-pandemic levels. Republicans have focused on the issue especially heading into next year’s midterm elections.
ADMINISTRATION AUCTIONS OFF GULF OF MEXICO DRILLING LEASES
The Biden administration on Wednesday auctioned off millions of acres in the Gulf of Mexico for oil and gas drilling, its first lease sale since taking office.
The administration initially wanted to institute a temporary pause on selling leases, but a court halted its moratorium, forcing it to begin auctioning off areas.
Nevertheless, the sale garnered ire from environmental advocates and some Democrats, who said the department should have modified it or waited for the results of an appeal.
What was for sale? The sale put up about 80 million acres for lease, but only 1.7 million were actually leased, with companies placing bids on just 308 out of about 15,000 blocks. Thirty-three companies participated in the sale.
The firms will pay a total of nearly $192 million to drill in the water, in addition to royalties for what they extract.
Many of the blocks went to major players in the industry, with ExxonMobil bidding on more than 90, Chevron placing more than 30 bids and BP placing nearly 50 bids.
Out of all the 308 blocks leased, only nine had more than one bid.
It’s not clear what changes, if any, will be implemented as a result of the Biden administration’s review of the federal oil and gas lease program, but Interior Secretary Deb Haaland has repeatedly called for taxpayers to receive a fair return on their investment.
The story so far: The effort to put a hold on new lease sales met with a backlash from congressional Republicans, and more than a dozen GOP-led states sued the administration. That led to a preliminary injunction that found “substantial likelihood” the executive branch lacks the authority to pause offshore oil and gas leasing.
Judge Terry Doughty of the Western District of Louisiana, a Trump appointee, argued in granting his injunction that the states were likely to face losses as a result of the leasing pause.
Louisiana Attorney General Jeff Landry’s office led the lawsuit. The state’s solicitor general Elizabeth Murrill told The Hill on Tuesday the pause would have had a negative impact on her state.
“We have a depressed energy economy, and it’s partly because the overall decision about whether to invest is made in part by the regulatory environment. And with such a hostile regulatory environment, those investments are likely to go elsewhere,” she said.
Senate OKs energy regulator, filling panel
The Senate on Wednesday confirmed by a voice vote President Biden’s pick to fill an open seat on the Federal Energy Regulatory Commission (FERC) — a body that regulates pipelines, electricity markets and other forms of interstate energy transmission.
The chamber voted to confirm Willie Phillips Jr. to the position, alongside a slate of other nominees.
Phillips has served as a utility regulator in Washington, D.C. According to a White House announcement on his nomination, he has more than 20 years of legal expertise and has worked both as a regulator and in private practice.
Typically, voice votes signify that nominees are not controversial.
However, Phillips’s nomination did get some scrutiny from environmental activists who have raised concerns about whether he’s too supportive of utilities.
Testifying before Congress, Phillips said he would try to seek “balance” between reliability, affordability and sustainability.
“I believe that climate change is real. I believe that we have a moral and ethical obligation to address it,” he said, adding, “We have to have balance in our approach.”
Phillips’s nomination gives FERC a full complement of five commissioners and gives Democrats a 3-2 majority on the panel. The commission can’t have more than three regulators belonging to the same political party.
He’ll serve for nearly five years for a term that expires June 30, 2026.
ON TAP FOR TOMORROW
The Select Climate Crisis committee will hold a hearing titled “Tribal Voices, Tribal Wisdom: Strategies for the Climate Crisis”
Check out our virtual event on America’s Economic Recovery — Thursday, November 18 at 1 PM ET
Rising consumer prices, product shortages and labor inconsistencies are rattling the U.S. economic recovery. Yet, the economy has created over four million jobs this year and wages continue to rise. What role will consumers and businesses play in economic recovery and how will they emerge from the downturn? What is the domestic growth forecast for next year? Rep. Kweisi Mfume (D-Md.), Rep. Dave Schweikert (R-Ariz.), ADP Chief Economist Dr. Nela Richardson and Princeton economist Janet Currie join The Hill’s Steve Clemons for a discussion on the new economic landscape and the changing labor force. RSVP today.
WHAT WE’RE READING
Protesters disrupt the world’s largest coal port: ‘This is us responding to the climate crisis’, The Washington Post reports
EPA reverses action on Yazoo Pumps Project, WAPT reports
Regulators seek to suspend Trump rule on railway natural gas, The Associated Press reports
Bill Gates’ $4 bln high-tech nuclear reactor set for Wyoming coal site, Reuters reports
Judge: Michigan’s Line 5 shutdown case must stay in federal court, The Detroit News reports
1,000 manatee deaths reported this year in Florida, eclipsing previous record
Court reinstates lobster fishing ban implemented to save whales
Schumer: Emissions reductions ‘not sufficient’ without meeting White House environmental justice standard
Religious institutions say infrastructure funds will help model sustainability
Biden sends 2016 climate treaty to Senate for ratification
And finally, something offbeat and offbeat: We’re going to be honest with you, we’re running out of bear puns at this point
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.
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