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LATEST DEMOCRATIC FORAY AGAINST BIG OIL: The House Oversight Committee gathered today for the latest installment of a nearly yearlong Democratic investigation into the profits of “Big Oil” and whether the four companies— ExxonMobil, Chevron, BP, and Shell—misled the public about their efforts to fight climate change.

As part of the effort, Democrats have repeatedly requested millions of documents from the companies detailing their work to fight global warming and invest in clean energy.

“Not only are ‘Big Oil’s’ climate pledges misleading and insufficient to curb warming, but none of these companies is even on track to meet these pledges,” the panel’s chairwoman, Rep. Carolyn Maloney, D-N.Y., said this morning. “And while the fossil fuel industry fiddles, our planet is burning.”

The House Natural Resource Committee's oversight panel also tore into the fossil fuel industry yesterday in a separate hearing examining whether public relations firms employed by the companies may have played a role in spreading misinformation about the effects of climate change.

Republicans call the hearings a political stunt. They also follow months of notable silence from Democrats on the climate probe, which first began when they summoned oil executives to the Hill in October.

Since then, Russia’s war in Ukraine and its resulting energy crisis had forced lawmakers to put the probe to rest, at least temporarily. In March, Democrats “indefinitely” postponed a planned hearing in which they had planned to grill oil executives on their climate change plans, loath to be seen as attacking American energy producers at a time when the U.S.—and the Biden administration— was desperate for more domestic production.

“It’s clear the Democrats paused this partisan show hearing for five months because publicly attacking America's energy producers would have been embarrassing when the Biden administration's war on domestic energy production resulted in record-high gas prices for Americans,” the panel’s ranking Republican, Rep. James Comer of Kentucky, said this morning.

But the fight against Big Oil didn’t let up. Instead, the companies were blamed for something new. While the climate investigations were put on pause, executives from the nation’s top oil and gas companies were again summoned to Capitol Hill in April. This time, it was by Democrats on the House Energy and Commerce Committee, who accused them of artificially inflating prices by failing to ramp up production—the opposite of what lawmakers had encouraged in October.

It was a whiplash-inducing scene, as the panel’s chairman, Rep. Frank Pallone, D-N.J. accused the companies outright of “ripping off the American people” by failing to quickly meet the surge in demand. “At a time of record profits, Big Oil is refusing to increase production,” Pallone said in April.

Now, though, the supply crunch has abated slightly— at least in the U.S. Energy costs fell 5% in August, according to the latest Bureau of Labor Statistics report, led by a sharp 10.5% drop in the gasoline index. Prices at the pump have cooled significantly; down $1.32 from the all-time high seen in June, when the national average climbed above $5 a gallon for the first time ever.

That, as well as the looming midterm elections, has given Democrats the go-ahead they need to gear up and resume their fight on all fronts; including picking up where they left off on climate change.

Big Oil “needs to do its part” in helping fight climate change, Maloney said in her opening remarks today, adding that the companies must “end their greenwashing, and finally [begin] taking climate change seriously before more Americans and communities are harmed.”

Republicans call foul: “During a hearing with oil and gas executives in October, Democrats on this committee advocated for the companies to decrease production,” Comer said today. “It's a good thing they didn't listen.”

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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PATAGONIA OWNERSHIP TRANSFER TO GIVE REVENUES TO GREEN CAUSE: Patagonia, the $3 billion outdoor clothing and accessory company, is being “reimagined” into an environmental financier.

Owner Yvon Chouinard announced in a post on the company site that ownership will be transferred to a public trust and a nonprofit group, where earnings will be used for environmental activism.

“Instead of extracting value from nature and transforming it into wealth for investors, we’ll use the wealth Patagonia creates to protect the source of all wealth,” Chouinard said in the post, which was headlined, “Earth is now our only shareholder.”

Stock will be distributed to Patagonia Purpose Trust and the Holdfast Collective, a 501(c)(4) nonprofit group.

Daniel Hemel, a professor of tax law at NYU, noted that the transaction is allowing the Choinards to avoid paying capital gains taxes as well as gift taxes – which would normally be $1.2 billion on a $3 billion gift, he wrote on Twitter.

In a recent similar maneuver, Barry Seid donated his $1.6 billion Chicago electrical device manufacturing company Tripp Lite to a 501(c)(4) controlled by prominent conservative activist Leonard Leo.

“By making almost exactly the same move as Seid, the Chouinards are reducing their gift tax liability by >98% & avoiding income tax on any capital gains/dividends from Patagonia that flow into the (c)(4),” Hemel wrote.

In comparison: The roughly $100 million a year in profits that will now be available to the Holdfast Collective, per a New York Times report, could make it instantly one of the largest nonprofit political entities, which are commonly referred to as “dark money” because they do not have the same disclosure requirements as political parties.

For comparison, the largest GOP-aligned political nonprofit, spent $196 million in 2020, according to a New York Times analysis.

MANCHIN CELEBRATES OFFSHORE LEASE AWARDS: Sen. Joe Manchin is running a victory lap in praise of the Inflation Reduction Act as he faces backlash from liberal Democrats, who resent him for trimming down the party’s signature legislation and striking a deal on permitting reform, and from Republicans, who criticize him for agreeing to a deal after withholding his support for a package for months.

After the Bureau of Ocean Energy Management announced yesterday that it accepted bids for last year’s offshore oil and gas lease sale in the Gulf of Mexico, Manchin said the IRA is “[delivering] on increased energy production.”

“I made sure the Inflation Reduction Act reinstated this lease sale to ensure we are able to provide our domestically produced energy,” Manchin said in a statement.

He called the oil and gas leasing programs critical to energy security and said the leases “will provide the market signals necessary to help ease the pain Americans are feeling from record inflation and high energy prices.”

Manchin was one of a handful of Democrats who went to President Joe Biden earlier in the year to ask for more support for offshore oil and gas leasing. Specifically, they requested that Interior hurry up and finalize a proposed five-year program for offshore, which it belatedly issued on July 1.

It’s not a widely shared priority for Democrats, and many rank-and-file support restrictions or a cessation of leasing, making the IRA’s leasing requirements especially significant concessions for those members.

DOT APPROVES FIRST STATE ELECTRIC VEHICLE CHARGING NETWORK PLANS: The Biden administration announced yesterday that it has approved 35 state plans submitted to the Department of Transportation under the bipartisan infrastructure law’s national EV charging network program.

States and territories ranging from Arkansas, Oregon, and Puerto Rico are among those approved for a share of the $5 billion in formula funding provided in the law for construction of EV chargers. The plans together cover 53,000 miles of highways.

Energy Secretary Jennifer Granholm said the approvals serve a need to reduce use of fossil fuels. States “now have the green light to build their pieces of the national charging network to ensure drivers can spend less on transportation costs while commuting confidently by charging along the way,” she said.

Twenty-six states had at least 1,000 public charging stations as of August 2022, according to research published Tuesday by the Electric Power Research Institute.

Based on estimates of 26 million EVs on the roads in 2030, the nation could need as many as 2 million public and workplace chargers.

BLUE-STATES COUNTER-PROGRAM ON ESG: Democratic state financial officers yesterday published a rebuke of their Republican counterparts’ campaign against environmental, social, and governance investing.

There will be “two kinds of states moving forward,” the signatory officials wrote in an open letter. “States focused on short term gains and states focused on long term beneficial outcomes for all stakeholders.”

Republicans overseeing a blacklisting of financial firms that enlist ESG, like West Virginia Treasurer Riley Moore and Texas Comptroller Glenn Hegar, “obstruct the free market” and “will miss potential growth because their focus is on preserving the status quo,” they said.

Targeted firms, with investment giant BlackRock most prominent among them, have accused Republican officials of misrepresenting them while making the case for ESG as a service to the health of the market.

CRYPTOCURRENCY INTRODUCES LESS ENERGY-INTENSIVE VALIDATION METHOD: NO. 2 cryptocurrency Ethereum updated the way that it creates tokens, setting a new precedent for the industry and radically reducing its energy consumption, the Washington Examiner’s Chris Hutton reports.

The new “proof of stake” method involves users installing “validators,” software that helps process transactions of ethereum and that requires them to hold a minimum of 32 ETH, or about $53,000, in order to be approved.

The “proof of work” method that proof of stake replaced involved users “mining” the currency, wherein computers process a series of algorithms in competition with other computers to earn Ether. Most cryptocurrencies use this method, but it is especially energy-intensive, leading some to criticize the sector for gobbling up energy and contributing to climate change.

Earlier this year, Biden ordered his Office of Science and Technology Policy to look into the sector and consider “the potential for [crypto] to impede or advance efforts to tackle climate change at home and abroad.”

OSTP published a report last week containing some high-level observations, including that crypto-asset mining “typically have high load factors” as they “use power nearly constantly.”

The Rundown

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Calendar

MONDAY | SEPTEMBER 19

10:00 a.m. The 39th annual International Pittsburgh Coal Conference (PCC) begins. The four-day conference includes a range of events focusing on all aspects of coal utilization and sustainable development both in the U.S. and internationally, and will bring together key participants from industry, government, and academia. Learn more and register for the event here.

MONDAY | SEPTEMBER 26

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