|
WHAT’S HAPPENING TODAY: Good afternoon and happy Wednesday, readers! If you’re traveling to or from Washington, D.C., for the 4th of July this summer, and are flying out of DCA, you might run into some flight issues, as the airport will be halting most operations for part of the holiday weekend. ✈️ 🎆 🦅 You can find everything you need to know here.
Today’s edition of Daily on Energy dives right into the top things you need to know about what’s going on with oil markets and the Strait of Hormuz today, as the formal signing of the peace deal between the U.S. and Iran remains on shaky ground. 🇺🇸🛢️🇮🇷 Traders still appear confident the deal will go through, as crude prices have stayed below $80 today. 💲📉
Plus, the Trump administration scored another win over the offshore wind industry today, killing four projects set to be developed on the East and West coasts in another buyout deal. ⚡💨 Keep reading for all the details.
Welcome to Daily on Energy, written by Washington Examiner energy and environment writers Callie Patteson (@CalliePatteson) and Maydeen Merino (@MaydeenMerino). Email cpatteson@washingtonexaminer dot com or mmerino@washingtonexaminer dot com for tips, suggestions, calendar items, and anything else. If a friend sent this to you and you’d like to sign up, . If signing up doesn’t work, shoot us an email, and we’ll add you to our list.
WHAT YOU NEED TO KNOW ABOUT IRAN AND OIL TODAY: Markets remain on edge today as President Donald Trump warned the expected ceasefire deal between the United States and Iran isn’t finalized and could fall apart before the formal signing on Friday – even though the administration confirmed leadership digitally signed the deal a few days ago.
Overall, oil prices are still on a downward trajectory compared to earlier in the week, remaining below $80 a barrel. However, as confidence wavers, international and domestic prices ticked up slightly in the afternoon. At around 2:30 p.m. EDT, Brent crude was up 0.66% and priced at $79.48 a barrel. West Texas Intermediate also increased 0.71% and was selling at $76.59 a barrel.
A lower threat: Still, there is a broader sense that de-escalation is on the horizon. Yesterday, the Joint Maritime Information Center downgraded the threat level in the Strait of Hormuz from “severe” to “substantial.”
The naval coalition warned that vessels should still be aware that an attack when traveling through the water is a strong possibility. The downgrade, however, is a significant step toward resuming normal flows, and could encourage insurance providers to lower their war premiums for ship owners.
United Arab Emirates looks to eliminate dependency: As the reopening of the Strait of Hormuz remains shaky, the United Arab Emirates is aiming to completely end its reliance on the waterway.
UAE Foreign Trade Minister Thani Al Zeyoudi told Bloomberg that the nation is moving toward “having zero Hormuz dependency,” regardless of whether the strait is open or not.
“It’s going to open and we hope that will happen quickly, but we will not stop the new plan,” he said.
The country is especially aiming to do this by using existing pipelines, expanding ports in the Gulf of Oman, and expanding its pipeline, rail and road networks. This will include building a third petroleum pipeline.
Plus, surplus next year: This year’s global crude supply constraints are being forecast to disappear quite quickly, as the International Energy Agency is now projecting a significant supply surplus next year.
In its monthly oil market report released today, the IEA estimated that oil supply will grow by 8 million barrels per day next year, while demand will only increase by 2 million barrels per day.
“This may provide a welcome respite to the market and an opportunity to replenish depleted inventories, or to build new strategic reserves, as countries review their energy strategies and policies in response to the crisis,” the Paris-based agency said.
Still, the IEA warned that before the market is able to balance and shift to the supply surplus, oil inventories could still very well hit historic lows.
G7 LEADERS AGREE TO A PLAN TO REDUCE DEPENDENCE ON CHINESE RARE EARTHS: The Group of Seven leaders released a joint statement earlier today with plans to reduce dependence on Chinese rare earths and permanent magnets.
The leaders of G7 did not directly name China but noted that no single country outside of the group and its partners should supply more than 60% of rare earths and permanent magnets by 2030, with the goal of reaching 50% as soon as possible.
China controls the rare earth and critical mineral global supply chains. It has used its dominance in the market as leverage against the U.S. and other western nations. Beijing has placed export restrictions on a number of essential rare earths. Trump last November was able to reach an agreement to lift some of those restrictions.
The G7 noted that it would strengthen coordination to diversify the rare earth and critical mineral supply chain. The countries said they would work together to advance production, processing, recycling, and develop projects for critical minerals.
The nations also said they would work with the International Energy Agency as a technical platform and data partner. The G7 also committed to improving transparency and traceability systems to track critical mineral suppliers and combat illegal trafficking of minerals.
Read more by Maydeen here.
INTERIOR KILLS FOUR MORE OFFSHORE WIND PROJECTS: The Interior Department is moving to cancel four additional offshore wind leases in exchange for the developer to abandon the projects and increase investments in fossil fuels.
The details: Interior announced earlier today that it will be paying $765 million to affiliates of Invenergy to terminate four offshore wind leases in the New York Bight, the Central Coast of California, and the Gulf of Maine. In exchange, the Invenergy affiliates have agreed to stop the projects and take the $765 million and redirect those funds toward other energy projects, including natural gas and geothermal.
The administration has said the $765 million is a partial reimbursement for the amount the developer previously spent on the offshore leases.
Interior has struck similar agreements with Bluepoint Wind and Golden State Wind for projects off New York, New Jersey, and California, as well as TotalEnergies for projects off the coasts of New York and North Carolina. In those deals, developers agreed not to pursue future offshore wind developments in the U.S.
Invenergy, however, does not appear to have made such a promise.
Read more from Callie here.
ENERGY DEPARTMENT DIVERTED SOLAR FUNDS FOR PUERTO RICO ADMITTING RISK OF FAVORITISM: Documents obtained by Grist reveal the Department of Energy diverted hundreds of millions of dollars meant to boost rooftop solar in Puerto Rico to a bankrupt utility running the island’s electrical grid, despite admitting it could be seen as “undue favoritism."
Some background: In 2023, Congress established the $1 billion Puerto Rico-Energy Resilience Fund with the hope of supporting resilience of the island’s electrical grid, partially through deploying residential solar and battery storage systems.
Last fall, the Trump administration decided to reallocate around $365 million of the fund, instead diverting the money intended for solar to the Puerto Rico Electric Power Authority. PREPA has been in bankruptcy since 2017.
The funds are expected to go towards upgrading and repairing PREPA’s grid-related facilities, including fossil fuel-run plants and a new natural gas pipeline.
What’s new: Public records obtained by Grist through the Freedom of Information Act reveal that the agency allegedly gave the utility favorable treatment and fast-tracked the review process for the funds.
For example, typically, the Energy Department requires grant recipients to provide a 50% cost share for project costs. For PREPA, however, the agency reportedly accepted just a 1% cost share. Documents reviewed by the outlet say the administration said the utility, which has nearly $4 billion in annual revenue, was under “significant financial stress.”
Additionally, Grist reported that the funds were granted to PREPA without considering any other applicants. Documents indicate that the administration knew that this, along with the cost-share reduction and the decision to not seek congressional approval, would draw criticism.
“[S]ole source designation to PREPA may raise objections to fairness, and perceived undue favoritism,” the documents read.
SENATE DEMS CALL ON TRUMP TO END EFFORTS TO BUILD WEST COAST OIL RESERVE: Democratic Sens. Alex Padilla of California and Patty Murray of Washington sent a letter to Energy Secretary Chris Wright warning against the administration’s efforts to create an oil reserve in the West Coast.
“We also request that the Department cease all work to establish any new West Coast Strategic Petroleum Reserve until it has followed the process Congress has laid out,” Padilla and Murray wrote in the letter, CNN reports.
Politico reported earlier this month that Sable Offshore Corp. sent a proposal for an oil reserve to the Energy Department in response to inquiries made by the Trump administration as part of an effort to boost California oil and gas supply.
The West Coast Strategic Petroleum Reserve would be an extension of the federal emergency stockpile, which has since been depleted due to the Ukraine and Iran wars. Wright told Politico that the administration is in “active dialogue” about the proposed oil reserve.
WHAT’S GOING ON WITH THE REFLECTING POOL: Unless you’d managed to completely unplug from social media this week, you have probably seen photos that show the Lincoln Memorial Reflecting Pool turning bright green due to algae buildup just days after the administration finished its multimillion-dollar makeover.
The pool’s renovation was completed just over a week ago, costing more than $13 million to repair leaks along the more-than-2,000-foot site and paint the bottom “American Flag” blue. It holds more than 6 million gallons of water, and was refilled last week.
The reflecting pool has long dealt with algae growth due to the hot and muggy climate of Washington D.C., its shallow and stagnant build, and direct exposure to sunlight.
So, it didn’t come as a surprise when algae began to bloom once again after the pool was refilled.
The fix: The Trump administration has brushed off concerns over the recent bloom, with the Interior Department insisting that it is residual algae from supply lines that sat dormant during the renovation.
“We are removing the algae, and the nanobubblers will maintain the pool and keep it algae free,” a department spokesperson told the Examiner’s Molly Parks, before turning the blame on the Obama and Biden administrations. “President Donald J. Trump is an expert builder who has fixed the Reflecting Pool for good unlike the failed and extremely costly attempt by [former Presidents Barack] Obama and [Joe] Biden.”
To remove the algae, the administration is using a combination of new nanobubble technology and hydrogen peroxide. It remains unclear when the algae will be fully cleared.
You can read more about the clean-up efforts from Molly here.
THE MIDWEST BRACES FOR THUNDERSTORMS: Severe thunderstorms are expected to roll through the Midwest today, bringing strong winds, hail, lightning, flash floods, and potential tornadoes, AccuWeather said.
"A strong area of low pressure, unusually intense for June, will sweep across the Midwest Wednesday," AccuWeather Vice President of Forecast Operations Dan DePodwin said. "This storm will interact with plentiful warm and humid air, setting the stage for widespread damaging thunderstorm wind gusts and the potential for multiple tornadoes."
The thunderstorms will move rapidly, some at 70 miles per hour or more. The strongest storms could experience gusts of wind up to 85 mph. Tornado risk could be extended into the late hours across the Ohio Valley.
AccuWeather said the Midwest has been the “epicenter” for severe thunderstorms this year. It said that last week’s multiday outbreak resulted in more than 500 damaging wind reports for June 10 and 11, including a preliminary count of 74 tornadoes.
RUNDOWN
E&E News How a fired FEMA leader got a second chance from Trump
CNN How one devastating cyclone wiped out 7% of the planet’s rarest great apes
Inside Climate News Utah National Monument Survives Attempt to Rescind its Management Plan
|
