WHAT’S HAPPENING TODAY: Good afternoon and happy Friday, Daily on Energy readers! Callie is back from her reporting trip in Colorado, where she took a deep dive into what oil and gas drilling looks like in the Denver-Julesburg Basin. Here’s a quick photo from the trip out West, and we’ll have more from that for you all soon. 🛢️🏔️📸
We’re wrapping up another week taking a quick look at where oil and gasoline prices sit and, guess what? They’re still pretty high. ⛽📈 Some analysts are now warning that diesel prices could hit record levels, eclipsing what was seen in 2022, as soon as this weekend. Be sure to keep a lookout.
Plus, it wouldn’t be a Friday under the Trump administration without some big news. President Donald Trump released his fiscal year 2027 budget request earlier today. 🏛️💰 We have everything you need to know about what energy and environmental programs the White House still wants to slash.
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, click here. If signing up doesn’t work, shoot us an email, and we’ll add you to our list.
QUOTE OF THE WEEK: Callie was in eastern Colorado this week, where she spoke with many residents about how surging gas prices have affected their spending habits over the last month.
Christina Forman, a truck driver from Boulder County, told Callie: “My online shopping definitely increased because it was cheaper for me to pay delivery fees than it was for me to get in my car and drive.”
Stay tuned for more.
WHAT’S IN TRUMP’S BUDGET PROPOSAL: President Donald Trump released his budget request for fiscal year 2027, proposing cuts to renewable energy initiatives, environmental programs, and electric vehicles.
For instance, the White House proposes cutting the Environmental Protection Agency by half, which is similar to the proposal made last year that was rejected by Congress. There has been a significant reduction in staffing at the agency as part of the administration’s efforts to overhaul federal agencies.
The budget also terminates funding for environmental justice programs and water infrastructure projects.
“This EPA budget proposal leaves families sicker, not safer,” Michelle Roos, executive director of the Environmental Protection Network, said in a statement.
The budget also proposes slashing more than $4 billion from electric vehicle charging programs, known as the National Electric Vehicle Infrastructure (NEVI) and Charging and Fueling Infrastructure grant programs. The NEVI program distributes funding to states to build out charging ports across the country, but the program has fallen short, with only 127 sites opening since the enactment in 2021.
Investments: There are also some proposed investments to boost the critical mineral supply chain under the Departments of Energy, Commerce, Interior, and State. The administration in the past year has zeroed in on expanding the supply chain to reduce reliance on China.
For example, the White House proposed $13 billion in financing under the State Department to “rebuild and secure the critical mineral supply chains.”
WHERE PRICES STAND: Oil prices continued to surge today, signaling that traders are growing more fearful of further escalation in the war in Iran.
Just after 3 p.m. EST, Brent Crude had jumped by 7.78%, selling at $109.03 per barrel. West Texas Intermediate also soared by 11.41%, and was priced at $111.54 per barrel.
There are no signals that gasoline prices will drop significantly anytime soon, with the average gasoline and diesel prices remaining above $4 and $5 a gallon, respectively. Earlier today, AAA reported that the national average price of gasoline was $4.091 per gallon. The average price of diesel sits at $5.533 per gallon, just about $0.30 below its record high of over $5.81 seen in 2022.
GasBuddy analyst Patrick De Haan told Callie earlier today that the average price of diesel could set a new record as soon as this weekend. Gasoline, on the other hand, shouldn’t hit record highs for three to four more weeks.
Demand hasn’t gone down: In Colorado, many motorists Callie spoke with insisted that the high prices weren’t causing them to drive less – yet.
De Haan explained that, historically, the U.S. has been more inelastic when it comes to gasoline prices and demand as we rely so heavily on vehicles nationwide.
“We aren’t happy about it, but there’s also not much we can do,” De Haan told Daily on Energy, warning that as a result, prices will continue to climb.
“When people aren’t yet slowing down their consumption, prices are going to keep going up until, you know, until there is a point of resistance where people do reduce consumption, and that’s where prices top out at,” he said. “So we’re not even close to that.”
‘DRILL, BABY, DRILL’ UPDATE: The number of active drilling rigs in the U.S. rose for the first time in three weeks this week, according to data released by Baker Hughes.
The oilfield services company found that the number of active oil and gas rigs in the U.S. sits at around 548, five greater than this time last week. The total count is still 41 fewer than last year.
Broken down further, the tally of oil rigs grew by two, while the number of gas rigs increased by 3. All of the rigs added to the total count were located on land.
HOW AIRLINES ARE DEALING WITH RISING FUEL PRICES: While gas prices have primarily grabbed headlines over the last month, the Strait of Hormuz closure is also sending shockwaves through the airline industry.
Jet fuels make up about 20-30% of overall costs for airlines and, since the Iran war began, prices have surged more than 100%. As a result, airline customers are going to start feeling some of those costs trickle down. Here’s what we’re seeing so far:
United Airlines: At the end of last month, United CEO Scott Kirby warned that the company may have to increase ticket prices by up to 20%. While tickets haven’t gone up significantly, the airline did decide that as of today, baggage fees would increase by $10 for customers’ first and second checked bags, and by $50 for a third checked bag.
JetBlue: Also this week, JetBlue announced it would be increasing its checked baggage fees due to the growing operational costs. The highest fees will affect days which the company defines as “peak” and typically align with summer holiday travel, Thanksgiving, Christmas and New Year’s. During those dates, customers will have to pay $49 to check their bag, $9 more than previously. For non-peak dates, travelers will still have to pay $39 to check a bag. Previously it was $35.
Lufthansa: Reports also indicate that major European airlines, such as Lufthansa, are considering grounding planes entirely. Lufthansa CEO Carsten Spohr reportedly told employees this week that the company is weighing removing 40 aircraft from operations.
Skybus: Even an airline in the United Kingdom, Skybus, has moved to cancel all flights between two major regions starting today. The company has ceased all flights between Cornwall and London, driven by both the higher fuel prices and recent drop in passenger bookings.
INTERIOR LAUNCHES ‘MARINE MINERALS ADMINISTRATION’: The Department of Interior is establishing a new office in order to better support expanded offshore energy development, including deep sea mining.
The agency announced earlier today that it was starting a phased plan to establish the Marine Minerals Administration. The office will draw on functions from the Bureau of Ocean Energy Management as well as the Bureau of Safety and Environmental Enforcement. Interior said the move was to “improve coordination and increase efficiencies” for offshore-related leasing, permitting, inspections, and environmental oversight.
The agency said the new office will have a “more modern, coordinated approach to offshore resource management.”
As part of the launching of the new department, Interior said internal alignment activities will begin soon and there will be no regulatory rollbacks in the meantime.
EX-IM APPROVES $2BN FOR LNG TO EGYPT: The Export-Import Bank this week approved an export credit insurance of more than $2 billion to support the export of U.S. liquefied natural gas to Egypt.
The authorization will support LNG exports to Egypt from 2026 to 2027. Ex-Im said it would help support jobs in the U.S. as well.
“American energy is in demand, and American workers deserve to be the ones supplying it,” Chairman John Jovanovic said in a statement.
“This authorization puts U.S. energy molecules to work in a critical market, stands behind American exporters who need a partner willing to compete, and deepens a strategic relationship that secures our supply chains and opens new doors for U.S. industry,” Jovanovic said.
Egypt is a significant importer of LNG, and gas supplies from Israel have been paused since Iran struck its natural gas fields. LNG supplies in Europe and Asia remain scarce due to the war in the Middle East.
DFC ANNOUNCES NEW REINSURANCE PARTNERS FOR HORMUZ PLAN: The U.S. International Development Finance Corporation and its lead insurance partner, Chubb, announced six new reinsurance partners as part of its efforts to provide maritime insurance in the Strait of Hormuz.
DFC said that it has partnered with Travelers, Liberty Mutual Insurance, Berkshire Hathaway, AIG, Starr, and CNA. The new partners will provide an additional $20 billion, bringing the total Maritime Reinsurance facility to $40 billion.
The reinsurance facility will insure losses up to $40 billion on a rolling basis.
The strait has been effectively closed since the war started over a month ago, leading global energy prices to soar and supply chains to tighten. The president presented a plan last month for DFC to lead in providing maritime insurance to ships in the waterways.
CALIFORNIA NUCLEAR PLANT APPROVED TO RUN ANOTHER 20 YEARS: Nuclear energy won’t be leaving California anytime soon, as federal regulators gave approval for the state’s only nuclear power plant to continue operating another two decades.
The details: The Nuclear Regulatory Commission approved another 20-year operating license for the Diablo Canyon Power Plant yesterday, allowing the facility to run well into the 2040s. The decision, which was the result of a three-year renewable process, marked the 100th license renewal from the NRC.
The plant had been scheduled to close by the end of the decade, after first escaping closure originally scheduled in 2025. While it now has the federal approval to stay running, the plant’s operator indicated that there is still more needed to keep it open past the 2030s.
“The NRC’s approval follows a transparent and public process through which the agency determined that Diablo Canyon is safe and environmentally sound to operate for another 20 years, though extending operations past 2030 would require action from the California Legislature,” Pacific Gas and Electric Co. said yesterday.
Still, the decision marks a major win for nuclear energy advocates in California, a state that has historically sought to choke out the industry. Attitudes towards nuclear energy in California have dramatically shifted in recent years, particularly as Democrats have moved to prop up the energy resource as a way to hit the state’s stringent climate targets. Currently Diablo Canyon makes up nearly 20% of the state’s clean energy production.
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