Energy & Environment — OPEC+ announces production cuts, risking hike 

The Saudi-led OPEC+ bloc is cutting oil production by 2 million barrels a day. Meanwhile, heating costs may spike this winter, and President Biden and Gov. Ron DeSantis (R-Fla.) offer a rare bipartisan moment after Hurricane Ian. 

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Democrats criticize OPEC+ production cuts 

The Organization of the Petroleum Exporting Countries (OPEC) and its oil-exporting allies announced a 2 million barrel per day cut in oil production Wednesday, bucking months of pressure from Washington to increase production and potentially spiking gas prices again.  

The coalition, which includes the 13 OPEC nations and 11 nonmembers including Russia, made the announcement at its Vienna meeting, the first in-person summit since the beginning of the COVID-19 pandemic. The announced cut is roughly equivalent to 2 percent of global supplies. 

How we got here: In July, President Biden visited Saudi Arabia to directly appeal to its leaders to increase oil production, despite his administration’s frequent criticism of the kingdom’s human rights record. After the meeting, Saudi Arabia announced a production increase, but a significantly smaller one than the U.S. had requested. 

• The cut announced by OPEC+ is about twice the amount the U.S. has been releasing daily from the strategic petroleum reserve. White House press secretary Karine Jean-Pierre said Tuesday that future strategic petroleum reserve releases have not been discussed.  
  
• It’s unclear what direct impact the cut will have on domestic gas prices, but it could prompt an increase weeks before the midterms after the Biden administration has touted lower prices recently. Initial reports increased the price of oil by about $3 a barrel Wednesday morning. Prices have fallen from about $120 a barrel in June to around $80 a barrel amid concerns about a potential global recession.   

Democrats blast announcement: “It’s clear that OPEC+ is aligning with Russia with today’s announcement,” Jean-Pierre told reporters hours after the announcement. 

Jean-Pierre was noncommittal on whether the announcement would affect broader Washington-Riyadh relations, saying, “I can speak to this decision: it’s a mistake.”  

Democrats in Congress were blunter, specifically questioning the purpose of overlooking Saudi Arabia’s human rights record and selling the nation weapons at no benefit to the U.S.   

“I thought the whole point of selling arms to the Gulf States despite their human rights abuses, nonsensical Yemen War, working against US interests in Libya, Sudan etc, was that when an international crisis came, the Gulf could choose America over Russia/China,” Sen. Chris Murphy (D-Conn.), who sits on the Senate Foreign Relations Committee, tweeted Wednesday morning.  

• Murphy further excoriated the decision in an interview with CNBC Wednesday from the Warsaw Security Forum in Poland, calling for a “full-scale re-evaluation” of the U.S.-Saudi alliance.   
  
• “What’s the point of looking the other way as the Saudis chop up journalists [and] repress political speech inside Saudi Arabia if, when the chips are down, the Saudis essentially choose the Russians instead of the United States?” Murphy said, referencing the 2018 assassination of Washington Post columnist Jamal Khashoggi. 
  
• “We’ve been very clear with them; we need them right now … and it seems like either the Saudis aren’t willing to stand with us or have to be pushed very hard to stand with us,” Murphy said. 

Read more about the announcement and the Democratic backlash here. 

US staring down increased heating costs this winter 

Home heating costs in the United States are expected to exceed usual costs this winter amid the growth of natural gas exports.  

Natural gas, which is used in both home heating and electricity generation, is in particularly high demand as Europe seeks supplies from the U.S. and elsewhere following Russia’s invasion of Ukraine.   

For American consumers, and Americans in the northeast in particular, that could lead to higher bills, experts say.   

• “It certainly appears that we’re going to continue to see relatively high natural gas prices in the U.S.,” said Harrison Fell, a senior research scholar at Columbia University’s Center on Global Energy Policy.   
  
• “We’re going to see higher bills for a lot of customers throughout the U.S.,” he added.   

Early warning signs: The country is already seeing high prices for natural gas this year.   

The Energy Information Administration (EIA) — an independent statistics agency that’s part of the Energy Department — said Tuesday that prices have been significantly higher than they were a year ago.   

Prices in 2021 were already relatively high, and this year, they have “exceeded the previous five-year range.”  

• The EIA said that in several months this year, spot prices for a key benchmark were “essentially double” last year’s price for the same month and pointed to increased exports of fuel.   
  
• “Record-high liquefied natural gas (LNG) exports, in particular, have been a growing source of natural gas demand. Since 2021, the volume of natural gas used to support U.S. LNG exports has exceeded the volume consumed in the commercial sector,” the agency said.   

The U.S. has been increasing its exports of the fuel, largely to Europe to compensate for the loss of Russian natural gas amid its war with Ukraine. In the first half of this year, it became the world’s largest exporter of the fuel.   

Read more about the looming prospect here. 

Biden, DeSantis project unity after Hurricane Ian 

President Biden and Florida Gov. Ron DeSantis (R) put their political rivalry on hold Wednesday as the two toured damage from Hurricane Ian and projected a sense of unity in vowing to help the hardest hit parts of the state rebuild. 

“Today we have one job and only one job. That is to make sure the people of Florida get everything they need to fully recover,” Biden said in prepared remarks as DeSantis stood behind him. 

Asked about DeSantis’s response to the storm, Biden told reporters: “I think he’s done a good job. We have very different political philosophies, but we’ve worked hand in glove.” 

• Biden and DeSantis emphasized the cooperation between the federal government and state and local officials, highlighting emergency declarations and the allocation of federal resources that allowed for a prompt response to the storm before it even made landfall. 
  
• “We were very fortunate to have good coordination with the White House and FEMA from the very beginning of this,” DeSantis said. 

The two men were in Fort Myers, one of the areas that sustained the most damage when Hurricane Ian made landfall last week as a Category 4 storm that left millions without power and destroyed homes. State and local officials warned rebuilding would be a years-long process in some areas. 

Biden received a briefing on the response and recovery efforts from DeSantis and FEMA Administrator Deanne Criswell and met with residents and small business owners impacted by the storm. Biden also met with Florida Sens. Rick Scott (R) and Marco Rubio (R), as well as Rep. Byron Donalds (R-Fla.). 

Read more from The Hill’s Alex Gangitano and Brett Samuels here. 

WHAT WE’RE READING

• EPA is ‘falling behind’ on power plant rules, report says (The Washington Post) 
• What Does Sustainable Living Look Like? Maybe Like Uruguay (The New York Times Magazine) 
• ‘Tax people in this room’ to help the poor, Shell CEO tells energy conference (Reuters) 
• As Salton Sea faces ecological collapse, a plan to save it with ocean water is rejected (The Los Angeles Times) 
• Podesta, IRS get to work on climate law’s tax incentives (E&E News) 

🐢 Lighter click: Turtling a corner

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.