WHAT’S HAPPENING TODAY: Good afternoon and happy Friday, readers! To kick off today’s Daily on Energy, we would like to wish our very own Callie Patteson a happy birthday!
With the help of our editor, Joe Lawler, we start the newsletter by looking at earnings reports from three oil majors for the first quarter, a period marked by a drop in crude oil prices due to concerns about the global economy and OPEC+ production.
Lawmakers are beginning to voice their opinions about energy tax credits, which are under consideration in the reconciliation process. House Republicans are calling on Ways and Means chairman Jason Smith to preserve some tax credits for nuclear power.
Keep reading to learn about the Natural Resources Committee Republicans’ reconciliation plans.
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: “Trump Republicans are hellbent on making California smoggy again. Clean air didn’t used to be political. In fact, we can thank Ronald Reagan and Richard Nixon for our decades-old authority to clean our air,” California Gov. Gavin Newsom said, regarding votes this week on resolutions to repeal the state’s emission regulations.
It’s worth noting, though, that 23 Democrats in total voted in support of two resolutions to repeal the state’s heavy-duty emission rules and 35 Democrats voted to overturn California’s ban on gas-powered vehicles.
“The only thing that’s changed is that big polluters and the right-wing propaganda machine have succeeded in buying off the Republican Party – and now the House is using a tactic that the Senate’s own parliamentarian has said is lawless,” Newsom said. “Our vehicles program helps clean the air for all Californians, and we’ll continue defending it. Washington may want to cede our economy to China but California is standing by American innovation.”
OIL MAJORS REPORT FIRST-QUARTER RESULTS: Chevron, ExxonMobil, and Shell announced their first-quarter earnings after oil prices dropped drastically earlier this week, marking the worst monthly decline since November 2021.
U.S. crude oil prices have dropped 18% due to concerns over the global economy. President Donald Trump’s implementation of sweeping tariffs has raised doubts about global demand, while OPEC+’s plans to increase output earlier than expected also put downward pressure on prices.
Chevron reported earnings of $2.18 per share in the first quarter, down from $2.93 per share in the same period last year. Chevron’s net income was $3.5 billion for the first quarter, which is lower than the previous year’s net income of $5.5 billion.
In its report, Chevron said the decline in earnings is due to “lower income from upstream and downstream equity affiliates, lower margins on refined product sales, unfavorable swings in tax items and foreign exchange effects, and lower realizations.”
ExxonMobil reported earnings of $7.71 billion or $1.76 per share, down from $8.22 billion or $2.06 per share in the first quarter of last year. Exxon said lower earnings are partly because of the volume growth in the Permian and Guyana, along with other factors like the significant decline in industry refining margins and weaker crude prices.
In addition, Shell announced earnings of $5.58 billion, which exceeded analysts’ expectations of $5.09 billion, CNBC reports. The company said it would buy back another $3.5 billion in the next three months.
MEANWHILE, OPEC+ DISCUSSING ANOTHER OIL PRODUCTION HIKE: Key members of OPEC+ are discussing another production hike, of roughly 400,000 barrels per day, ahead of a video meeting scheduled for Saturday, Bloomberg reports.
Oil prices were down, with international benchmark Brent crude down 1.5% to under $62 as of the early afternoon.
REPUBLICANS DEFEND IRA FOR NUCLEAR: A group of 26 House Republicans, led by Rep. Dan Newhouse of Washington, called on Ways and Means chairman Jason Smith to preserve Inflation Reduction Act credits for nuclear power, as well as tech-neutral credits for investment and production, as the panel writes the tax portions of the GOP reconciliation bill.
In a letter to Smith, the Republicans argue that the credits – 45U, 45Y, and 45E – are “essential in maintaining and expanding” the nuclear fleet.
The GOP support for the tax credits illustrates the difficulties that Republicans face in trying to extend the Trump tax cuts and add new breaks without adding so much to the deficit that fiscal hawks rebel. Some conservatives favor repealing all IRA tax credits to offset tax cuts.
ICMYI – NATURAL RESOURCES COMMITTEE SEES $15B IN RECONCILIATION SAVINGS: Natural Resources Committee Republicans released text for their part of the GOP reconciliation bill, in which they propose $15 billion in savings through stepped-up oil and gas lease sales.
The legislation would mandate quarterly onshore oil and gas lease sales, as well as new offshore lease sales in the western Gulf of Mexico and Alaska’s Cook Inlet and four new sales in the Arctic National Wildlife Refuge, according to E&E News. It would also reverse IRA hikes to royalty rates.
TRUMP CALLS FOR CUTTING EPA IN HALF: The White House “skinny” budget proposal for fiscal year 2026 released this morning calls for a 55% cut to the Environmental Protection Agency’s budget. It also proposes a 9% cut for the Department of Energy and 21% for the Department of the Interior. Read the budget proposal here.
Reaction: “This is a reckless and short-sighted plan that will lead to higher levels of toxic pollution in the air we breathe and water we drink across the nation,” said Michelle Roos, Executive Director of the Environmental Protection Network, a nonprofit composed of former EPA career staff. “This is a wrecking ball approach that would gut America’s frontline defense for protecting people’s health and environment.”
“When the next toxic disaster strikes, who will answer the phone and respond? Americans overwhelmingly support EPA’s mission, and the public must speak up and tell congress to stop these attacks on public health,” Roos added.
CHINA AT RISK FROM TRUMP IRAN SANCTIONS THREAT: Trump’s threat yesterday to impose secondary sanctions on Iranian oil will mostly affect China, the Wall Street Journal notes.
China is the largest importer of Iranian oil, as other nations have stepped back from purchases because of sanctions.
Trump’s threat initially pushed up crude oil prices, but they then settled back down. The post about secondary sanctions was one of several communications from the Trump administration yesterday dialing up pressure on Iran.
TWO MAJOR RESEARCH GROUPS WORK TO KEEP CLIMATE REPORT ALIVE: The American Geophysical Union (AGU) and the American Meteorological Society (AMS) announced they would unite to “sustain the momentum” of the sixth National Climate Assessment, following the Trump administration firing the authors last week.
The AGU is the world’s largest association of Earth and space scientists and the AMS is the professional society for atmospheric and related sciences and services.
The Trump administration last week ended the funding for the U.S. Global Change Research Program that helps to develop the congressionally mandated report called the National Climate Assessment. The report provides findings on how climate change is impacting society.
However, AGU and AMS are calling for the “first-of-its-kind special collection focused on climate change in the United States.” The collection would consist of over 29 peer-reviewed climate journals, including observations, projections, impacts, risks, and solutions, the groups said.
The groups said the collaboration does not replace the NCA but ensures that work on how climate change impacts society will continue.
“It’s incumbent on us to ensure our communities, our neighbors, our children are all protected and prepared for the mounting risks of climate change,” said AGU President Brandon Jones. “This collaboration provides a critical pathway for a wide range of researchers to come together and provide the science needed to support the global enterprise pursuing solutions to climate change.”
CANADA WILDFIRE SEASON HAS BEGUN: Canada’s wildfire season has officially started with 26 active fires burning in British Columbia, Reuters reports.
Two of the 26 wildfires in Canada are currently out of control.
One of the uncontained wildfires is in Fort St. John. The fire prompted evacuations yesterday evening and has burned 138 acres as of today, Reuters reports. The other uncontained wildfire is located southeast of the community of Dawson Creek. It has burned 457 acres.
The government yesterday warned that the next couple of days the British Columbia will have a higher wildfire risk due to higher temperatures, dry weather, and strong winds. It urged people to report any wildfire, big or small. Last year, Canada endured one of the worst wildfire seasons on record.
RUNDOWN:
Inside Climate News California Toxic Algal Bloom Blamed for Months-long Marine Life Poisoning
Canary Media Largest solar farm east of the Mississippi provides more than just power
Associated Press Los Angeles homeowners begin to rebuild after devastating wildfires
