WHAT’S HAPPENING TODAY: Good afternoon and happy Wednesday, readers! Callie and Maydeen kick things off today by diving into the Department of Energy’s reported plans to cut funding for hydrogen energy projects in left-leaning states. An executive with a leading industrial gases company involved in the projects revealed to Daily on Energy whether the industry itself is concerned by the potential funding rollbacks.
In other fuel news, the Federal Reserve Bank in Dallas has said oil prices will need to sit at an average of around $65 per barrel for profitable new drilling, despite Trump administration claims that the market could thrive on prices hitting as low as $50. Plus, keep reading to find out where Tesla is looking to expand sales.
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.
TRUMP’S DOE MAY SLASH CLIMATE CASH IN LEFT-LEANING STATES, SPARING SOME ON THE RIGHT: The Department of Energy, headed by President Donald Trump’s energy secretary Chris Wright, is reportedly considering cutting funding for the hydrogen hub projects in Democratic-led states while maintaining funds for similar projects in states run by Republicans.
The details: Three people familiar with the plan confirmed to Politico that a list has been circulating within the department detailing which hydrogen production hubs are at risk of losing federal funding. There are seven multi-state hubs in question that were awarded funding from Congress and the Biden administration through the bipartisan infrastructure law (BIL) in order to develop the use of hydrogen as a clean energy source and reduce greenhouse gas emissions.
The list, obtained by Politico, labeled each hub with the words “cut” or “keep.” Four of the seven projects listed were labeled as “cut” – with all four being located in mostly Democratic-leaning states including Oregon, Washington, Montana, California, Illinois, Indiana, Michigan, Pennsylvania, Delaware, and New Jersey. The remaining three were reportedly labeled as “keep,” with the multi-state hubs spanning Minnesota, South Dakota, North Dakota, Ohio, Kentucky, West Virginia, Pennsylvania and Louisiana – primarily Republican-led states.
It is worth noting that three of the hydrogen hubs on the possible cut list were expected to rely on renewables or nuclear energy, while the others were poised to be powered in part by natural gas with carbon capture technologies.
Why does this matter? The potential cuts are part of the Department of Government Efficiency’s efforts to reduce government spending. Pulling back funding down party lines, however, would politicize federal funding, creating a pathway for lawsuits as well as distrust of the federal government within the private sector.
One leader in the industry isn’t too worried, though.
Adam Peters, the CEO of industrial gases company Air Liquide North America (which has been involved in six of the hubs), told Callie today that while the BIL funds are supportive and give these projects a “jolt,” it shouldn’t fully back them. Peters noted that each of the projects have different components, causing them to develop at different paces. At the end of the day, each one will have to stand on its own without subsidies in order to survive, he indicated.
“For us, I don’t see a major concern. I mean, we kind of went into this whole program eyes wide open. We knew what the subsidy was. We knew what that was going to support,” Peters said, adding that he wasn’t surprised by the administration’s consideration of pulling the funds.
DOGE FIRES KEY OIL PROJECTS SUPERVISOR: The man who helps oversee oil and gas drilling on Osage Nation land in Oklahoma was caught in the crosshairs of DOGE’s cost-cutting efforts last month, inadvertently working against the Trump administration’s fossil fuel agenda.
The details: As DOGE issued a wave of cuts to federal budgets and jobs last month across agencies, Osage Agency of the Bureau of Indian Affairs superintendent Adam Trumbly was fired. The Osage Agency manages leasing and development for all oil and gas resources in the 1.45 million-acre Osage Mineral Estate as well as lands in Osage County, Oklahoma. As superintendent, Trumbly primarily managed and permitted new oil projects in the region.
In firing Trumbly, the administration appeared to be doing the opposite of what it promised for the oil and gas industry – creating more delays and red tape for future projects. Like hundreds of other federal employees, Trumbly was ultimately reinstated to his position last week. He told Osage News that his return to work was negotiated with the Regional Director of the Bureau of Indian Affairs.
Some reaction: While Trumbly is back in his position, his brief departure sparked frustration among those in the industry. Geologist and former president of the Osage Producers Association Shane Matson told The Bulwark that Trumbly’s firing was “reckless incompetence” by DOGE and the administration.
“If you threaten to close the agency without a solution, when really you should triple the budget so we can ‘drill, baby, drill,’ the effect of that on the industry is ‘kill, baby, kill,’” Matson said.
OIL AND GAS FIRMS SAY $65 PER BARREL IS NEEDED FOR NEW DRILLING: Oil prices will need to be above $50 a barrel to drill new wells, oil and gas firms said in response to a survey by the Federal Reserve Bank of Dallas.
The Dallas Fed asked 129 oil and gas firms in a special survey question what West Texas Intermediate oil price is needed to drill. The average price to cover existing wells ranged from $26 to $45 per barrel. On average, though, $65 per barrel is needed to profitably drill a new well.
The oil and gas firms’ answers contradicts Department of Energy Chris Wright’s argument that domestic production could thrive at $50 per barrel. Wright told the Financial Times earlier this month that U.S. oil could “‘absolutely’ deliver both lower prices and higher production by ‘innovating’ and driving ‘efficiency gains.’”
The Trump administration has vowed to boost domestic oil production on federal lands by easing regulations. The survey noted that in the first quarter oil and production was slightly higher than the prior quarter, with the production index moving from 1.1 to 5.6.
RENEWABLE CAPACITY SET TO MISS GLOBAL TARGETS DESPITE RECORD GROWTH: While renewable energy capacity worldwide saw record growth last year – dominating traditional power sources – the industry is still falling off track to hit 2030 capacity goals, according to a new report from the International Renewable Energy Agency.
The details: The report, released Wednesday, revealed that around 92.5% of energy capacity added in 2024 (around 585 gigawatts) came from renewable energy sources like wind and solar. This translates to an annual growth rate of around 15.1%. This was a record growth rate for the industry, but there is still more work to be done, IRENA suggested.
During the 2023 United Nation’s Climate Change Conference, nations agreed on an international goal of triple renewable energy capacity by 2030 – increasing capacity to a whopping 11.2 terawatts. In order to hit this target, IRENA said, renewable capacity must grow by 16.6% each year.
The majority of global renewable energy capacity added last year was seen in China, which built nearly 64% of new capacity, including 278 gigawatts of new solar power alone. China also led the way with hydropower and bioenergy. The nation was joined by the United States when it came to dominating new wind power generation.
Key quote: “Renewable energy is powering down the fossil fuel age. Record-breaking growth is creating jobs, lowering energy bills and cleaning our air,” United Nations Secretary-General António Guterres said in a statement. “Renewables renew economies. But the shift to clean energy must be faster and fairer – with all countries given the chance to fully benefit from cheap, clean renewable power.”
TESLA TO START SELLING IN SAUDI ARABIA: Tesla will look to sell its electric vehicles in Saudi Arabia as the company faces tough global competition from Chinese EV companies.
In today’s announcement, Tesla said attendees at its opening event next month in Riyadh will be able to explore its electric vehicles, experience its autonomous driving with Cybercab, and meet its humanoid robot, Optimus. Winning over Saudi Arabia, a significant player in the oil market, to EVs could be a tall task.
The announcement comes as Tesla falls behind in global sales to Chinese EV company BYD. Earlier this week, BYD announced it reached $107 billion in revenue last year in comparison to Tesla, which reached $97.7 billion in revenue. Tesla’s total sales in 2024 were down 1.1% from 2023 total, CNN reported.
UNITED NATIONS CALLS ON EUROPEAN UNION TO SUBMIT LATE CLIMATE PLAN: United Nations officials are pressing the European Union to finish and present its emissions reduction plan that is now more than a month late.
The details: During a speech delivered in Berlin today, U.N. Framework Convention on Climate Change executive secretary Simon Stiell insisted the EU should show “leadership” on the international stage by delivering its climate plan, according to Bloomberg. He pointed to the Trump administration’s multiple withdrawals from international agreements and meetings, like the Paris Climate Accord, that have left a gap in global efforts to curb climate change.
“This is Europe’s moment; I urge you seize it,” Stiell said. “You have the technology, you have the resources; what is needed now is leadership.”
The hold up: While nations like Brazil and the United Kingdom have submitted their 2035 targets for cutting emissions, the EU has yet to do the same. The deadline to submit the new goals was Feb. 10. In February, EU officials told Reuters the bloc’s cycle of policymaking did not directly line up with the deadline and did not specify when they would release the new targets. The European Commission has previously said it planned to propose 2040 emissions reduction targets by the end of March. With less than a week remaining in the month, the executive branch now says those targets will be released in the “near future,” according to Bloomberg.
LATEST ON NORTH CAROLINA WILDFIRES: North Carolina continues to battle two large wildfires, prompting evacuations in Henderson and Polk counties.
As of today, the Black Cove Fire is 3,046 acres in size and 0% contained. The Deep Woods Fire is 2,923 acres in size and 0% contained. The two fires are moving closer to one another.
North Carolina Forest Service spokesman EJ Dwigans told ABC13 News yesterday that “These two fires could possibly converge this week.”
“Everyone is going to tell you we need more resources on this fire. The winds are extremely high, and that’s what folks are dealing with in the field right now,” Dwigans said.
The weather conditions today may make the fire worse, as the National Weather Service issued a Red Flag Warning for the mountains of Polk and Henderson counties until the evening. The NWS said there will be very dry conditions today with gusts expected between 25-35 mph. It added that any fires that develop could spread quickly in these conditions.
There are still mandatory evacuations for both the Black Cove and Deep Woods fire. The third fire is the Fish Hook Fire which is 199 acres in size and 72% contained.
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