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ENERGY PRICES DOWN: Consumer prices rose by 0.1% in August, according to a new report from the U.S. Bureau of Labor Statistics, offsetting sharp drops in energy costs and gas prices that economists had hoped would be enough to significantly cool inflation rates down from their 40-year highs.

Energy costs fell by 5% in August, the report found, led by a stark 10.5% drop in the gasoline index, as prices at the pump continue to deflate from their all-time high of more than $5 a gallon in June. (The national average currently sits at $3.70 per gallon, according to AAA, a 26-cent drop since last month.)

Costs for airfare and used cars also dropped in August, by 4.6% and 0.1%, respectively.

But these declines failed to moderate price hikes in other areas. Ultimately, prices rose by 8.3% from last year; driven primarily by high costs for housing, food, and medical care. (The food index rose by 11.4% since last year, for example, the largest 12-month increase since 1979.)

The electricity index also saw a 1.5% increase in August, its fourth consecutive month of an increase of 1.3% or higher. And the natural gas index increased over the month, rising 3.5% in August after falling 3.6% in July.

The report, which falls short of the 0.1% drop in headline inflation economists had expected, comes just one week before the Fed is slated to meet to decide how high its next rate hike should be. (Most investors are betting on another 0.75 percentage point increase.)

"The new numbers contradicted expectations of ongoing inflation moderation," Victor Claar, an economics professor at Florida Gulf Coast University, told the Examiner’s Zachary Halaschak. "Core inflation was the largest surprise today. ... While gas prices have been falling, they’re not falling fast enough to overcome other price inflation in most consumer spending categories. Working families aren’t seeing any relief yet."

And things could get worse in the months ahead. Appearing just days earlier on CNN’s “State of the Union,” U.S. Treasury Secretary Janet Yellen acknowledged that it is “possible” that the EU’s ban on Russian crude imports, as well as the G-7’s Russian oil price cap, could cause U.S. gas prices to rise again this winter.

It’s “certainly a risk” that gas prices could increase again, Yellen said. “This winter, the European Union will cease, for the most part, buying Russian oil. And, in addition, they will ban the provision of services that enable Russia to ship oil by tanker. And it is possible that that could cause a spike in oil prices.”

While leaders have yet to set the price of the oil price cap, Yellen said the proposal “is designed to both lower Russian revenues that they use to support their economy and fight this illegal war, while also maintaining Russian oil supplies that will help to hold down global oil prices. So I believe this is something that can be essential, and it’s something that we’re trying to put in place to avoid a future spike in oil prices.”

Welcome to Daily on Energy, written by Washington Examiner Energy and Environment Writers Jeremy Beaman (@jeremywbeaman) and Breanne Deppisch (@breanne_dep). Email [email protected] or [email protected] 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.

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U.N. URGES EU TO AVOID ‘BACKTRACKING’ ON CLIMATE GOALS AMID CRISIS: Acting U.N. human rights chief Nada al-Nashif urged the EU to avoid “backtracking” on its climate goals this winter, warning in a speech yesterday about the long-term consequences of relying too heavily on fossil fuels, even as the bloc scrambles to avoid a supply crisis and offset Russian supplies in the weeks and months ahead.

“In the face of soaring energy prices which threaten to impact the most vulnerable as winter approaches, some EU member states are turning to investments in fossil fuels infrastructure and supplies,” al-Nashif said, speaking before members of the Human Rights Council in Geneva.

While such an impulse was “understandable,” she said, it should not prompt leaders to ramp up use of fossil fuels, and instead called for faster development of energy-efficient and renewable energy projects. “There is no room for backtracking in the face of the ongoing climate crisis,” she said.

BIDEN LIKELY TO DESIGNATE COLORADO MILITARY SITE AS NATIONAL MONUMENT: President Joe Biden is likely to designate Colorado’s Camp Hale World War II-era military training facility as a new national monument, the Washington Post reports, his first such designation since taking office and one that could prohibit mining and drilling activity in the area.

Biden could declare the Camp Hale-Continental Divide National Monument as early as this month, according to the Post.

In designating Camp Hale as a national monument, Biden could help bypass gridlock in the Senate, where a bill aimed at protecting roughly 400,000 acres of Colorado’s public lands has stalled amid Republican opposition to a provision that would bar certain areas in the state from mining and mineral leasing.

SENATE GOP INTRODUCES PERMITTING REFORM BILL: Senate Republicans introduced a competing proposal yesterday to the permitting reform outline put together by Majority Leader Chuck Schumer and Sen. Joe Manchin.

Sen. Shelley Moore Capito, who led the bill and has expressed support for at least some of the permitting reform provisions in the Manchin-Schumer deal, said she and her colleagues got tired of waiting for a bill text to emerge from the Democratic effort and that Republicans are taking it upon themselves to resolve the “roadblocks, delays, and postponements” of infrastructure projects.

What’s in it: Capito’s Simplify Timelines and Assure Regulatory Transparency Act has 38 Republican co-sponsors and would codify Trump-era regs under the National Environmental Policy Act and Clean Water Act.

It contains language providing that a lead agency overseeing a project “shall develop ... a schedule for the energy project that is consistent with a time period of not more than 2 years for the completion of the environmental review and authorization process for an energy project.”

Republicans have advocated harder time limits so as to avoid extended review periods, although critics insist that such limits entail corner-cutting.

The bill also encourages wider use of the categorical exclusion, a mechanism that functionally exempts certain classes of projects from full-throated reviews on the grounds that they have already been demonstrated as not deleterious to the environment.

The MVP carveout: Like the Manchin-Schumer proposal, the GOP bill offers a carveout for the Mountain Valley Pipeline.

Relevant federal authorities would be required to issue all permits required for the completion of the natural gas pipeline within 21 days of passage.

The politics: Democratic leadership has its work cut out in gathering support for its permitting reform deal. More than 70 House Democrats oppose the deal where it would favor oil and gas projects, and they oppose its being brought to the floor as part of a continuing resolution, preferring a standalone vote instead. Liberal environmental groups overwhelmingly oppose the permitting deal, too.

At the same time, Republicans have their own incentives to decline to get behind the Democratic deal. For one, now they have a proposal of their own that is likely to be more aggressive in its reforms than any final Democratic-led deal would be.

There’s also some measure of distaste among Republicans, although it’s not exactly clear how widely it’s shared, at the notion of serving Manchin’s and Schumer’s “payback scheme,” as Sen. Lindsey Graham has branded it.

INDUSTRY GROUP ASKS WASHINGTON TO OPEN ARMS TO LNG EXPORTS: The American Exploration and Production Council is asking both the Biden administration and Congress to revisit policies governing liquefied natural gas exports and to deem exports to be in service of U.S. national security interests.

AXPC, an industry group representing large independent oil and gas producers, released an “LNG export agenda” yesterday, encouraging the administration to reverse its policy opposing U.S. financing for fossil fuel projects abroad with limited exceptions.

The administration’s policy, as first established in December, makes exemptions for certain projects if it can be demonstrated that they support U.S. national security or foreign policy aims, and officials have made clear since the war in Ukraine began that the administration is supportive of helping to finance some natural gas projects in Europe.

Going further on ‘public interest’: AXPC also recommended that Congress revisit the Natural Gas Act and tilt the scale more in favor of LNG export approvals.

The NGA’s current language provides that the Energy Department shall approve export authorizations unless it determines that the export “will not be consistent with the public interest.”

Congress instead should “[provide] that it is the policy of the United States that LNG exports are in the public interest unless a narrowly limited set of exceptions applies,” AXPC said.

The larger political fight: LNG has become a fixture in the post-invasion political fight over U.S. energy policy and diplomacy.

Biden pledged to help facilitate more shipments of LNG to Europe to displace Russian molecules, and his Energy Department has approved new export authorizations left and right, all to the dismay of environmental groups.

Oil and gas industry groups, meanwhile, have urged Biden to abandon his green posturing and to embrace U.S. LNG fully as a green energy solution — relative to coal and Russian pipeline gas.

INTERIOR PROPOSES STRICTER OFFSHORE WELL REQUIREMENTS: Interior’s Bureau of Safety and Environmental Enforcement proposed changes yesterday to its well control rule, which regulates offshore well sites and was first put together following the Deepwater Horizon disaster to prevent blowouts.

BSEE’s proposal would tighten operational requirements on blowout preventer systems used to seal wellbores and prevent spills.

Secretary Deb Haaland said the department “must commit to strengthening and modernizing offshore energy standards and oversight.” The agency said Trump-era changes weakened the well control rule.

Notable timing: The proposed rule was announced days before the first of a series of key offshore leasing-related deadlines provided in the Inflation Reduction Act. By Thursday, the agency must reinstate Lease Sale 257, the November 2021 Gulf of Mexico lease sale that’s been held up in court since January.

The Rundown

Associated Press 100 years after compact, Colorado River nearing crisis point

Bloomberg German diesel drivers, truckers hit by growing energy crisis

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Calendar

WEDNESDAY | SEPTEMBER 14

10:00 a.m. 1324 Longworth The House Natural Resources Subcommittee on Oversight and Investigations will hold a hearing on the alleged role public relations firms may have played in preventing action on climate change. Learn more and register here.

THURSDAY | SEPTEMBER 15 

9:00 a.m. 2154 Rayburn The House Oversight and Reform Committee will hold a hearing to examine the record-breaking profits reported by major oil companies Exxon, Chevron, BP, and Shell, and to look at the companies’ roles in fighting climate change. Learn more and register here.

MONDAY | SEPTEMBER 26

The 6th annual, five-day National Clean Energy Week kicks off in Washington, D.C.