President Biden is under pressure to address high oil and gas prices as he heads to Saudi Arabia, and a new report examines the greenhouse emissions of the top U.S. oil-and-gas companies.
Plus: The House passes a bill to help veterans who were exposed to toxins.
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Biden may push Saudis on oil, markets likely to rule
President Biden’s trip to Saudi Arabia may help prod the country toward increasing oil production — but it’s unlikely to lead to a radical change in the kingdom’s plans.
Oil prices will be on the president’s mind during the controversial trip, which has come under criticism from progressives who say the administration should shun the Saudi leadership over its human rights record, the war in Yemen and the murder of former Washington Post journalist Jamal Khashoggi.
Biden is battling prices that have recently averaged $5 per gallon across the country, which along with inflation have produced stiff headwinds for Democrats facing a difficult midterm election year.
The administration would welcome an effort by the Saudis to increase global supplies in a way that might offset, to some degree, the market disruption caused by the Russian invasion of Ukraine.
But experts are saying that U.S. drivers shouldn’t hold their breath.
- “It adds to the incentive to increase production, but I do think the Saudis are looking at the overall market dynamics and trying to respond in a relatively careful way,” said Joseph Majkut, director of the energy security and climate change program at the Center for Strategic and International Studies.
- He said any difference from the trip is likely to be modest, even though the Biden visit will be “an important signal that the two countries are working together on energy issues.”
WHAT THEY’RE PLANNING TO DISCUSS
The White House has said there will continue to be discussions with producers like the Saudis.
“We’re in constant contact not just with producers in the Gulf, but producers globally. We’re also working, obviously, on domestic production as well. And those conversations will continue during this trip,” National Security Advisor Jake Sullivan told reporters on Wednesday.
“They — you know, the president talked about energy security in Asia, he talked about energy security in Europe. He’ll talk about energy security here,” he added.
Some expectations: Antoine Halff, the former chief oil analyst at the International Energy Agency, told The Hill that he expects Saudi Arabia to increase its production regardless of the visit.
“A production increase is forthcoming, it might not be huge, but there’s going to be a production increase,” said Halff, who is now an adjunct senior research scholar at Columbia University’s Center on Global Energy Policy.
Samantha Gross, director of the Brookings Institution’s Energy Security and Climate Initiative, meanwhile, was skeptical of whether the trip would have any impact at all.
- “I think the impact of this trip on the oil market is going to be zero to very small,” she told The Hill in an interview. Not only do producers like Saudi Arabia and the United Arab Emirates likely currently have little more production capacity, “they also for sure don’t have a lot of motivation to use it.”
- “They’re enjoying the high prices, and I don’t think the prices are so high that they’re demand-destroying,” she added.
- At the end of the day, Gross said, any attempts at prodding the Saudis to produce more gas will likely run up against the fact that the U.S. has little to incentivize the kingdom to step it up.
- “I don’t feel like the U.S. does have a lot to offer,” she said.
House passes bill for vets exposed to toxins
The House passed much-anticipated legislation Wednesday to expand benefits for veterans who suffer illnesses from toxic exposures during their military service.
The Sgt. First Class Heath Robinson Honoring Our PACT Act largely aims to expand access to care from the Department of Veterans Affairs (VA) to 3.5 million veterans who served after the Sept. 11, 2001, terrorist attack and were exposed to toxic burn pits.
- The measure passed by a bipartisan vote of 342-88, a much wider margin than when the lower chamber initially passed the bill in March. The bill gained much more Republican support, with 123 joining Democrats in advancing the measure.
- The Senate passed the bill in June by a vote of 84-14.
The revised legislation heads back to the upper chamber, with technical drafting error corrections to the measure passed last month
Rep. Mark Takano (D-Calif.), chairman of the House Veterans’ Affairs Committee, said in floor remarks that Congress was “setting a new standard with the PACT Act.”
“We’re telling our veterans the burden of proof is not on you,” Takano said. “Because of your sacrifice to our country, this Congress and the American people are giving you the benefit of the doubt you have earned.”
The legislation also expands presumptions related to Agent Orange — used largely during the Vietnam War — to veterans who served in Thailand, Cambodia, Laos and Guam.
EXXON, CONOCOPHILLIPS AMONG TOP EMITTERS: GREEN GROUPS
Four energy companies — ExxonMobil, ConocoPhillips, Hilcorp and Occidental Petroleum — are the top sources in the U.S. of both greenhouse gas emissions in general and methane emissions, according to a report issued Thursday by environmental groups Ceres and the Clean Air Task Force.
The report, based on data submitted to the Environmental Protection Agency (EPA) from major oil and gas producers, found wide variation in emissions among companies, with the highest-emitting companies producing methane emissions nearly 24 times more intense than those with the lowest emissions.
- Hilcorp led for total methane emissions in 2020, followed by Exxon, Occidental and ConocoPhillips, according to the research. The companies collectively reported more than 300,000 metric tons in methane emissions.
- The report found equipment operation was also a major determinant of emissions intensity.
- It found companies that practice flaring, or burning off extra natural gas, had more intense carbon dioxide emissions, and those that used pneumatic controllers — which control for factors like pressure and temperature but emit natural gas in the process — comprised 62 percent of methane emissions.
The organizations only analyzed statistics oil and gas companies are required by law to divulge to the EPA.
“This new report makes clear what experts have long known: There are clear steps oil and gas producers can take to reduce their methane and other greenhouse gas emissions,” Lesley Feldman, a senior analyst at the Clean Air Task Force, said in a statement. “Some are taking those steps while others are not, and federal and state regulations are key to ensuring we can standardize best practices across the industry.”
So what do the companies have to say?
- “The report reflects some of the great progress that we are making to reduce greenhouse gas emissions from our operations.” an Exxon spokesperson told The Hill, noting that the company plans to reach net-zero emissions from its operations by 2050.
- In a statement to The Hill, a Hilcorp spokesperson noted that the company’s business model largely involves taking on existing oil and gas properties and that the 2020 data did not reflect emissions reductions it has achieved. “Our investment has decreased emissions intensity by approximately 37% from 2019 to 2020,” the spokesperson said.
MORE WORK NEEDED TO REACH CLIMATE GOALS
A new analysis has found that the U.S. is currently not on track to meet President Biden’s climate goals unless it takes additional policy actions to mitigate global warming.
- The report, from research firm Rhodium Group, found that by 2030, the U.S. will have cut its emissions by between 24 and 35 percent compared to where they were at in 2005.
- That’s a significantly smaller cut than the 50 to 52 percent that President Biden has called for.
- But, the projection does not include emissions cuts that would come from regulations that have been proposed, but not yet been finalized.
Coming down the pike: There are still more rules expected to cut climate pollution that the Biden administration is expected to finalize, including a regulation that aims to curtail the release of a planet-warming gas called methane from the oil and gas sector.
And the administration is expected to propose additional regulations, including one that would curb emissions from power plants. The Supreme Court recently limited how the agency can go about such regulations, but the Biden administration still has tools at its disposal to regulate these sources of planet-warming gases and is expected to do so.
This year’s Rhodium Group report is more optimistic than last year’s projection, in which the group estimated that the U.S. would cut its emissions by between 17 and 30 percent. However, the group attributed the shift to higher fossil fuel prices and slower economic growth projections, rather than climate policies.