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LOSSES FOR GREEN GROUPS: After racking up some big legal wins earlier in President Joe Biden’s term, environmental groups (otherwise usually allied with Biden) have hit a snag with claims challenging major recent administrative actions advancing oil and gas development on federal lands and in federal waters.
The latest: The D.C. Circuit Court of Appeals, a week ago today, upheld the reinstatement of Lease Sale 257 in the Gulf of Mexico. A panel of the court ruled against Friends of the Earth and other environmental groups in a challenge to the Interior Department’s issuance of leases auctioned off under the offshore oil and gas lease sale, which was held in Nov. 2021.
Friends of the Earth had already successfully challenged the lease sale once before, getting a federal judge to toss its record of decision for being deficient.
The recent ruling came after the Ninth Circuit Court of Appeals rejected an attempt to block the commencement of construction by ConocoPhillips and its contractors on the Willow project.
Earlier challenges to the Cook Inlet lease sale offshore Alaska in December and Lease Sale 259 in the Gulf, held last month, fell short of blocking those lease sales.
The difference-maker: For the offshore lease sales, it was the IRA. The law, the administration has argued in multiple venues, superseded totally its discretion over the lease sales by ordering Interior and BOEM to move forward by specified dates.
With 257, the law also superseded the court decision that had sent the lease sale back to BOEM to remedy the lease sale’s faulty environmental review.
“This was the one and only place where Congress [in the IRA] had sort of reached in the middle of an ongoing process, and said, ‘Do this, not that,’” Steve Mashuda of Earthjustice, which represented environmental appellees in the case, told Jeremy.
Mashuda said his clients felt the the lease sale should have never happened in the first place but sought to convince the court that the IRA instructs Interior to issue the 257 leases only if the court were to overrule the district court and hold the lease sale valid.
But the court wasn’t convinced of that: “By placing a nondiscretionary obligation on the Department to issue the leases, the Inflation Reduction Act makes clear that the issuance of the leases is no longer subject to NEPA,” it ruled.
Mashuda said the lessees “got away with 1.7 million acres of leases in the Gulf of Mexico that they should never have had from that sale” because of the IRA and the court’s interpretation of it.
A major case still to be decided: The challenge of Gulf-based environmental groups against Lease Sale 259, which BOEM carried out in March. Several big players, including Chevron and the American Petroleum Institute, have sought to intervene in that case to uphold the lease sale.
Another case brought by environmental challengers against the Biden administration’s approval of thousands of oil and gas drilling permits remains open.
Welcome to Daily on Energy, written by Washington Examiner Energy and Environment Writers Jeremy Beaman (@jeremywbeaman) and Breanne Deppisch (@breanne_dep). Email [email protected] or [email protected] for tips, suggestions, calendar items, and anything else. If a friend sent this to you and you’d like to sign up, click here. If signing up doesn’t work, shoot us an email, and we’ll add you to our list.
OIL JUMPS, BUT STILL ON TRACK FOR THIRD STRAIGHT WEEKLY DECLINE: Oil prices jumped today following a strong jobs report for the month of April and expectations that the Fed will pause rate hikes in June–but those gains failed to correct for the overall losses this week, a third straight week of declines.
International benchmark Brent crude climbed as high as $2.61 to $75.11 per barrel this morning, and West Texas Intermediate rose to $71.26, a 3.9% gain. WTI, though, started the week just under $77.
“Rather than underlying fundamentals, the selling frenzy over the past week has been driven by worries about demand linked to recession risks and the strain in the U.S. banking sector,” PVM oil market analyst Stephen Brennock told Reuters.
The downward trend in oil prices has also spurred a price drop for gas, which saw the national average price per gallon fall 7 cents compared to last week, and 66 cents compared to the same point last year, according to AAA.
VIETNAM TO LEAN ON COAL DOUBLING POWER GENERATION BY 2030: Vietnam is seeking to more than double its power generation capacity by the end of the decade, but is using less offshore wind generation to do so than previously planned, and will up its reliance on coal in the near-term to meet that target, according to a draft of the country’s power development plan reviewed by Reuters.
Vietnam’s total installed power generation capacity is expected to reach 158 GW by 2030, an increase from previous estimates and far higher than its 69 GW power capacity in 2020, according to the document.
But the plan also projects offshore wind power generation to account for only 6 GW of that; slightly lower than the 7 GW target projected late last year. And coal power energy generation is slated to rise to 30.1 GW by 2030, compared to 21.4 GW in 2020, keeping the dirtiest fossil fuel the single largest source of electricity generation in the country through the end of the decade.
Vietnam’s power mix is key for the government if it hopes to secure the $15.5 billion of clean energy transition funds G-7 members pledged to the country late last year.
CLIMATE CHANGE IMPLICATED IN MEDITERRANEAN HEAT WAVE: Man-made climate change was almost certainly the cause of the scorching heat wave that hit the Mediterranean last month, sending temperatures in Spain, Portugal, Morocco, and Algeria above 98.4 degrees Fahrenheit (20 degrees higher than normal for this time of year), according to a new flash report from scientists with the World Weather Attribution network.
The report concluded that human-caused climate change made the excruciating high-heat conditions 100 times as likely to occur. Speaking to reporters at a press briefing alongside the report’s release, lead author Sjoukje Philip, said such an extreme weather event “would have been almost impossible in the past, colder climate,” and were exacerbated by drought conditions in all four countries.
“We will see more intense and more frequent heat waves in the future as global warming continues,” Philip added. Read the full study here.
EU SEEKS GAS SALES ON ITS NEW JOINT PURCHASE PLATFORM: The EU is urging international gas suppliers to sell LNG to member states through the bloc’s new joint purchasing platform, in a bid to prevent another winter of painful price hikes as member countries look to refill their gas storage tanks before winter.
The platform is an effort by EU members to coordinate action and negotiations with international gas suppliers, in an effort to prevent member countries from outbidding each other for LNG and natural gas on the international market.
It also allows the EU to act in lockstep to secure better conditions for all EU consumers as they prepare to secure gas supplies for the coming winter.
In an interview with Bloomberg TV, European Commission Vice President Maros Sefcovic said the bloc’s energy security situation is still uncertain, which could leave it at the mercy of any price hikes or supply shortages similar to last year.
The bloc was spared from a massive supply crisis last year due in large part to a mild winter and weak demand from China, but both Goldman Sachs and the International Energy Agency have warned recently that global gas demand could soar again next winter. Goldman, for its part, has predicted prices could more than double amid a revival in demand.
“All international suppliers of gas should come and bid,” Sefcovic told Bloomberg.
“We have to be vigilant, the situation is still very fragile,” he added, referring to energy security in the EU this winter.
HYDROGEN LOBBY FIGHTS ‘ADDITIONALITY’ IN NEW IRA CREDIT: The Fuel Cell and Hydrogen Energy Association is dissuading the Treasury Department from introducing “additionality” requirements into the implementation of the 45V tax credit for clean hydrogen.
Some have warned the clean hydrogen tax credit could quickly and easily become a driver of more greenhouse gas emissions if Treasury doesn’t get the rules right.
“For a hydrogen project to be eligible for a slice of the 45V pie, it should be powered by installing additional solar, wind and so on,” Gernot Wagner, a climate economist at Columbia Business School and Making Climate Policy Work co-author Danny Cullenward wrote in a recent Washington Post op-ed. “If recipients of the tax credits instead divert electricity from existing clean power plants, that will increase greenhouse gas emissions.”
This push for additionality, or the conditioning of clean hydrogen credits on the utilization of new electric generation, would hamstring large-scale decarbonization, FCHEA said in a letter to Treasury.
“The timelines for clean hydrogen scale up and siting are not the same as the timelines for new solar, wind or biogas installations, let alone nuclear and hydropower facilities,” the group said.
Linking the two “negates the independent path clean hydrogen needs to complement these other resources in the drive to decarbonize.”
KILDEE REVIVES PFAS TASK FORCE: Democratic Rep. Dan Kildee announced the relaunch of the bipartisan PFAS Task Force, co-chaired by Republican Rep. Brian Fitzpatrick.
The task force, first started in 2019, will promote legislation to address PFAS contamination in the environment and advocate for federal funding for additional PFAS research, according to the announcement.
The Rundown
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