Energy & Environment — Biden zeroes in on oil industry profits

Democrats are seeking to draw a contrast between big profits for oil companies and high prices at the pump. Meanwhile, Republicans are proposing cuts to the EPA as part of a debt limit proposal, and the Energy Department announced a new $2 billion loan for battery manufacturing.  

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Big Oil profits rile up Democrats 

The economic recovery from the COVID-19 pandemic and Russia’s invasion of Ukraine sent oil prices skyrocketing this year, bringing extremely high profits to energy companies.  

Last week, ExxonMobil reported a profit of $55.7 billion and Chevron reported a profit of $35.5 billion. This week, Shell reported $39.9 billion, BP reported $27.7 billion and French oil major TotalEnergies reported $36.2 billion in profits.  

The announcements spurred political backlash, including from the White House, as Democrats seek to draw a contrast between the pay the companies receive and the economic struggles of ordinary Americans.  

• “You may have noticed that Big Oil just reported record profits. Last year, they made $200 billion in the midst of a global energy crisis. It’s outrageous,” President Biden said Tuesday night during the State of the Union address to Congress. 
  
• “They invested too little of that profit to increase domestic production and keep gas prices down. Instead, they used those record profits to buy back their own stock, rewarding their CEOs and shareholders,” he continued. “Corporations ought to do the right thing. That’s why I propose that we quadruple the tax on corporate stock buybacks to encourage long-term investments instead.” 

Market analysts say the profits, caused by high energy prices, were the result of forces in the commodities market rather than a price set by an individual firm.  

“Oil, natural gas and all the refined products … are commodities that trade on exchanges, and the market sets the price for those products, oil companies don’t,” said John Thieroff, vice president and senior credit officer at Moody’s Investors Service.  

Even so, “companies’ decision to cut back on growth spending and to do things that might have led to increased supply, those things do have an impact on prices,” he said.  

Read more about the forces at play and the Democratic response here.  

REPUBLICANS TARGET CLIMATE, ENVIRONMENTAL JUSTICE FUNDS

Republicans on the House Budget Committee recently unveiled potential areas of spending the party could target as a battle over raising the nation’s debt limit heats up on Capitol Hill. 

The proposed cuts include funding that the Inflation Reduction Act gave to the Environmental Protection Agency to promote environmental justice and combat climate change.  

Specifically, the GOP targeted: 

• The $60 billion that the law put toward addressing environmental justice — that is, high pollution levels in underserved communities 
  
• The $27 billion in the law for for grants for projects that reduce or avoid greenhouse gas emissions and those that deploy zero-emission technology in disadvantaged communities.  

Read about the GOP proposal more broadly, from The Hill’s Aris Folley. 

DOE announces $2B loan for batteries 

The Biden administration on Thursday announced that it would issue a $2 billion loan to a battery manufacturing facility as it looks to bolster the country’s supply chain for electric vehicles.  

• “The Department of Energy is proud to announce a conditional commitment for a $2 billion loan to Redwood Materials,” Energy Secretary Jennifer Granholm said during a press conference.   
  
• “If finalized, this $2 billion loan is going to help Redwood to complete this project to produce critical components for EV batteries.” 

She did not elaborate on what the conditions of the commitment are. The Hill has reached out to the Energy Department for clarification.  

The details: 

• The loan would go to Redwood Materials for the expansion of a battery materials facility in McCarren, Nev.  
  
• The facility recycles batteries from electronics including cell phones, laptops and power tools and uses those materials to make components of electric vehicle batteries, according to the department.  
  
• Redwood Materials founder and CEO JB Straubel said that with its expansion in the coming years, the facility will be able to produce materials for about a million electric vehicles each year.  
  
• The announcement was also celebrated by Nevada Gov. Joe Lombardo (R). 

Read more about the announcement here. 

GOP SEEKS REPEAL OF TRUCK POLLUTION RULE 

Thirty-four Republican senators on Thursday introduced a resolution seeking to overturn an Environmental Protection Agency (EPA) rule on heavy truck emissions through the Congressional Review Act (CRA). 

The CRA allows lawmakers to reverse rules issued by the executive branch using a simple majority in both chambers of Congress. While the GOP recently took the majority in the House of Representatives, the effort, led by Sen. Deb Fischer (R-Neb.), would likely be doomed in the Democratic Senate and at the White House. 

In a statement, Fischer called the rule overly aggressive, saying it would create an incentive for truckers to use older, less-efficient vehicles for longer. 

“This aggressive EPA rule — which will hit mom and pop truck operations the hardest — is also ineffective because it incentivizes operators to keep using older, higher-emitting trucks for longer. During a period of high inflation and supply chain disruptions, the last thing this country needs is more expensive freight costs and fewer truckers,” Fischer said in a statement. 

The EPA finalized the new annual emissions rule in December, the first such update in two decades. The rule, set to be implemented in 2027, would cut nitrogen oxide from buses and heavy trucks by about half by 2045, according to the agency. 

Read more about the effort here.  

MORE SUBCOMMITTEE CHAIRS ANNOUNCED

The House Science Space and Technology Committee announced on Thursday that Rep. Brandon Williams (R-N.Y.) will lead its Energy Subcommittee and Rep. Max Miller (R-Ohio) will lead its environment subcommittee. The full committee is led by Rep. Frank Lucas (R-Okla.).  

WHAT WE’RE READING

• Carbon removal project planned for Kevin McCarthy’s district (E&E News) 
• Drought may have doomed this ancient empire — a warning for today’s climate crisis (The Washington Post) 
•  Manchin ‘raising hell’ over White House handling of marquee Dem bill  (Politico) 
• Twice as Much Land in Developing Nations Will be Swamped by Rising Seas than Previously Projected, New Research Shows (Inside Climate News) 
• ‘A national scandal’: how US climate funding could make water pollution worse (The Guardian) 

MORE FROM THE HILL

• Attorneys general call for federal protections against deadly workplace heat 
• Midwest lawmakers ask Biden to make ethanol-heavy fuel available year round 

😲 Lighter click: That’s a lot of acorns

That’s it for today, thanks for reading. Check out The Hill’s Energy & Environment page for the latest news and coverage. We’ll see you tomorrow.