A Left Turn to Ban Drilling

by Matthew Choi (Politico's Morning Energy) House progressives are planning to request Biden use emergency measures to ban future fossil fuel drilling on federal lands and deploy the Defense Production Act to ramp up clean energy generation, POLITICO’s Josh Siegel reports. The call will also touch on other progressive priorities like immigration, voting rights and student loan relief. Though the agenda is in line with the caucus’ push for the Build Back Better package, CPC Chair Pramila Jayapal stressed that the caucus isn’t abandoning the legislative effort.

Though the administration has pushed hard for BBB’s $500 billion in clean energy and climate investments, it is also calling for increased near term domestic oil and gas production following its ban on Russian fossil energy imports. Manchin suggested last week using the Defense Production Act to increase domestic oil and gas production.

MANCHIN SAYS NO TO VENEZUELA AND IRAN: Manchin has no interest in lifting sanctions to allow Iranian and Venezuelan oil imports to replace the loss of Russian energy, telling CNN’s Wolf Blitzer there are plenty of energy resources at home. “We have enough energy here to keep ourselves independent and be able to back fill our allies who need it around the world," Manchin said Tuesday. He added the two countries have considerably less stringent environmental regulations on their oil and gas production.

But replacing the 672,000 barrels per day of Russian imports in the U.S. with domestic energy isn’t something that can be done overnight. Investors still aren’t gung ho on pouring capital into new drilling. Despite pleas from the Biden administration to increase short term output to help cool current prices, the industry questions the long-term commitment of the administration toward oil and gas when it has offered so much messaging about transitioning to clean energy.

Still, getting Iranian and Venezuelan oil in U.S. ports isn’t an overnight solution either, with the ever shifting sands of diplomacy making it “challenging to pin down” where markets will go, OPEC wrote in its monthly oil market report. The cartel is tentatively keeping its oil demand growth projection at 4.2 million barrels per day but warned investors to stay flexible.

Russian Foreign Minister Sergey Lavrov indicated that a revived Iranian deal could be on the horizon, Reuters reports, potentially freeing up the country’s crude. Iran was exporting 2.5 million barrels per day of crude and condensate before the Trump administration reimposed sanctions on the regime (Russia was exporting 5 million bpd last December). Lavrov’s latest comments gave some solace, though Moscow’s stringent demands over the nuclear deal still threaten to thwart negotiations.

The European Union is tryingto keep markets from going too bonkers as it unveiled new energy-focused sanctions Tuesday, which exempted imports of Russian oil, coal and gas, as well as nuclear products and technology, POLITICO’s Karl Mathiesen reported. The new sanctions will bar European companies from projects that expand Russian exploration or production of fossil fuels and from transactions with 12 state-owned enterprises including Rosneft, Gazprom Neft and Transneft.

E15 ALLOWANCE? The Biden administration is considering allowing the sale of gasoline with higher blends of ethanol this summer as a way to curb soaring prices, White House press secretary Jen Psaki said. A bipartisan group of corn-state senators asked the administration to take the action last week to offer relief at the pump, and Psaki said Biden is “working overtime right now to evaluate and examine a range of domestic options that continue to be on the table.”

But states are not waiting for the White House to take action, with a growing bipartisan group of governors eyeing local gas tax holidays, Marie French and Colby Bermel report. The national average gas price was $4.316 on Tuesday after reaching an all-time high $4.331 last week. Kelsey Tamborrino has more for Pros. READ MORE