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THE LATEST FROM INTERIOR: The Interior Department finalized another land withdrawal prohibiting new mineral leasing on more than 336,000 acres of federal land as it tries to balance the scales between new oil and gas leasing and greenlighting of major fossil fuel projects with its land conservation and climate change agendas.
The details: Interior’s 20-year withdrawal around Chaco Canyon National Historical Park adds to millions of acres of federal land already withdrawn or proposed to be withdrawn under President Joe Biden, and serves a longstanding priority of Secretary Deb Haaland, who signed and publicized the public land order this morning years after seeking to marshal a withdrawal through Congress when she represented New Mexico in the House of Representatives.
Bigger picture: The withdrawal also comes alongside a rekindling of oil and gas leasing on federal lands and federal waters and sharp criticism from Biden’s environmental allies that he is tarnishing his legacy — and violating repeated promises on the campaign trail to end new leasing and drilling — by enabling more oil and gas development.
Give some, take some: Interior recommenced oil and gas leasing onshore last summer with lease sales across the West, including its largest covering 120,000 acres in Wyoming, to comply with a federal judge’s ruling that blocked Biden’s leasing pause.
New onshore leasing fell off in the second half of the year, with no new lease sales occurring after June 2022, but it’s picking up again in line with the Inflation Reduction Act. The Bureau of Land Management held one lease sale last month and is at various planning stages for lease sales proposed for the rest of the year.
The department has held multiple offshore oil and gas lease sales in recent months and also approved the construction and operations plan for ConocoPhillips’ Willow project in Alaska’s North Slope, the largest of its kind on federal lands, against the ardent opposition of climate and conservation groups.
At the same time, the administration has made more land off-limits with land withdrawals and monument designations:
- The big withdrawal, one Republicans want to reverse, covers 225,504 acres within the Superior National Forest in Minnesota, where developers of the Twin Metals mining project wanted to set up shop. The area is not home to substantial oil and gas reserves but does contain nickel and other mineral reserves.
- Establishment of Avi Kwa Ame National Monument in Nevada and the Castner Range National Monument in El Paso, Texas. Total area: 514,000 acres.
- Expansion of Bears Ears and Grand Staircase-Escalante national monuments in Utah from Trump-era reductions of areas covered by the designation. Total area: 3.23 million acres.
- Camp Hale-Continental Divide National Monument in Colorado, designated in October 2022. Total area: 53,804 acres.
How it’s playing to Biden’s left: The administration’s leasing activities have been accompanied by a firm liquefied natural gas export policy and other recent administrative actions that have been favorable to the oil and gas industry, including its export license for Alaska LNG and endorsement of the Mountain Valley Pipeline’s completion.
All of the above have angered Biden’s green allies, who have demanded that he be more aggressive in taking fossil fuels head on.
Collin Rees, a campaigner with Oil Change International, said it’s “good to do less [leasing] rather than more” with regard to the Chaco Canyon but said the withdrawal pales in comparison to the administration’s other policies and actions associated with fossil fuels.
“President Biden, when he was candidate Biden, was out there saying there will be no more at least for drilling on public lands,” Rees told Jeremy. “I don’t think he should get partial credit for keeping 10% of that promise.”
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MORE ON THE POLITICS OF CHACO CANYON: The argument over Chaco had substantial similarities to Willow. Both involved local native tribes and affiliated groups coming down on different sides of the proposed action, and it all had to do with land use.
With Willow, it was Alaska Natives living in the village of Nuiqsut that opposed the oil project out of fear that it would degrade the environment and their subsistence lifestyle, while those elsewhere in the North Slope broadly supported it for the money they can earn on royalties and taxes generated from the project.
Chaco Canyon is similar in that opponent native groups, including the Pueblo, sought to preserve the historic and sacred site by supporting the land withdrawal.
Navajo leaders, meanwhile, who also consider Chaco sacred, sought to scale down the proposed withdrawal so as to allow their constituents who are allottees of federal lands around Chaco to maximize the utility of the land through oil and gas development.
SAUDI ARABIA TO BEGIN PROCESSING LITHIUM FOR BMW: Saudi Arabia said it will open a second lithium processing facility to help supply European automaker BMW, in the latest example of how supply chains for EV batteries are growing outside of China.
The facility will refine lithium ore mined in southern Austria to send back to BMW, the Financial Times reports, and is expected to begin producing the refined lithium hydroxide as early as 2026.
The news comes as the EU and U.S. have sought to incentivize battery materials processing outside of China, which currently processes roughly 60% of the world’s lithium supply.
Saudi Arabia signed an agreement earlier this year to process lithium for EV Metals, an Australian battery manufacturing company, slated to open in 2026. The kingdom is seen as having an advantage in battery materials processing because of its cheap energy. Saudi leaders have also pushed to diversify their role in the energy sector beyond oil revenues, and have set an ambitious target of producing 500,000 electric vehicles a year by 2030, including for Lucid Motors, the U.S.-based automaker in which the kingdom’s sovereign wealth fund holds a majority stake. Lucid plans to produce as many as 150,000 of its cars per year in the kingdom beginning in 2025.
EXXON AND CHEVRON NEAR DEAL TO DRILL IN ALGERIA: U.S. energy giants ExxonMobil and Chevron are nearing a deal to drill in Algeria, an agreement that would for the first time give the U.S. access to the North African nation’s vast untapped shale gas reserves, believed to be among the largest in the world.
Algerian Energy Minister Mohamed Arkab said the deal is being negotiated with state-run oil and gas company Sonatrach and could be complete by the end of this year, according to the Wall Street Journal.
The deal would focus on conventional gas and shale gas drilling, WSJ reports, and comes as the U.S. shale patch has shown signs of waning. Algeria currently has three pipeline connections linking it to Europe, allowing companies to more easily access European markets as they look to other suppliers to replace Russian oil and gas.
SENATE APPROVES DEBT DEAL WITH PERMITTING AND MVP: Senators passed the White House-McCarthy debt deal last night, just getting over the 60-vote threshold with 63 members supporting the legislation that Congress fast-tracked and approved in just four days to avoid default.
Four Democrats and Sen. Bernie Sanders joined nearly three dozen Republicans in opposing the bill for a final vote of 63-36. Opponents included Sens. Jeff Merkley, Ed Markey, Elizabeth Warren, and John Fetterman, as well as conservatives Mike Lee and Tom Cotton.
Passage entails some notable reforms to the National Environmental Policy Act that Republicans have sought to codify after their inclusion in Trump-era NEPA implementing regulations, including time and page limits for environmental assessments and environmental impact statements.
The big one: Directions ordering all pending federal authorizations to be issued for the Mountain Valley Pipeline, as well as imposition of new restrictions on litigation surrounding the project.
It resolves Sen. Joe Manchin’s monthslong campaign to have Congress override outstanding lawsuits that have held up the interstate natural gas pipeline.
A last-second effort led by Sen. Tim Kaine to amend the debt ceiling legislation and strip it of the pipeline provision fell short. Lee was the only Republican to back the amendment.
HEINRICH ADDS TWO TRANSMISSION BILLS TO THE PERMITTING REFORM MIX: Sen. Martin Heinrich introduced transmission reform legislation yesterday to coincide with the Energy and Natural Resources Committee’s grid reliability hearing, during which he probed witnesses about how to address substantial interconnection backlogs that are keeping new generating sources off the grid.
One bill would create a 30% investment tax credit for qualifying electric power transmission line property and grid-enhancing technologies. The other would allow FERC to authorize National Interest Electric Transmission Facilities.
FOR YOUR RADAR—GAS STOVE DEBATE RE-IGNITES IN THE HOUSE NEXT WEEK: The House Rules Committee will convene Monday to consider two bills aimed at protecting consumers’ access to gas stoves. The panel will consider both H.R. 1615, the Gas Stove Protection and Freedom Act, and H.R. 1640, the Save our Gas Stoves Act.
Momentum for the legislation comes after the Energy Department issued a notice of proposed rulemaking earlier this year seeking to regulate household cooking appliances. If passed, DOE said, roughly half of the gas stoves for sale in the U.S. today would be ineligible for repurchase.
The Rundown
Wall Street Journal A ‘dirty’ job that few want: mining companies struggle to hire for the energy transition
NRDC blog Summer grid forecast: Blustery headlines, steady reliability
Bloomberg Tesla price war padded by $1.8 billion windfall from Biden’s IRA
Washington Examiner Newsom aims to have state directly buy power to avoid blackouts
