Subscribe today to the Washington Examiner magazine and get Washington Briefing: politics and policy stories that will keep you up to date with what's going on in Washington. SUBSCRIBE NOW: Just $1.00 an issue!

EUROPE’S EMERGENCY MEASURES: Brussels responded today to its escalating energy crisis, with energy ministers agreeing to new energy demand reduction targets in a bid to rein in prices that have risen to unsustainable levels.

The emergency mandates, expected to be finalized and put into effect in the coming days through March of next year, are meant to relieve the mounting price pressures caused by volatility in gas and power markets and get the bloc through to the other side of winter with minimal damage.

“We all agree that the market is not working normally and intervention is necessary,” said Commissioner Kadri Simson, who went on to endorse next steps that would go even further by imposing an EU-wide price cap on Russian gas imports — something sharply opposed by some members, including Austria.

What’s required: Under the emergency regulation, energy ministers agreed to a mandatory minimum demand reduction target of 5% of peak-hour electricity consumption (Isolated Malta and Cyprus received exemptions.)

The agreement also caps revenues in the wholesale power market at 180 euros per megawatt-hour for the first time on a bloc-wide basis.

Operators generating electricity from nuclear, wind, and solar sources, where the cost of generation is relatively low, have made “unexpectedly large financial gains over the past months, without their operational costs increasing,” the Council said, because high prices for coal and gas are raising the overall wholesale power price so high.

The revenue cap measure helps achieve, to some degree, the end goal sought by member governments who want to divorce the gas and electricity markets so the latter can be protected from volatility in the former.

“This has crept up on Europe, as the share of renewables has increased in most countries,” Jonathan Stern, distinguished research fellow at the Oxford Institute for Energy Studies, told Jeremy. But, “until the price of gas went up massively, the [marginal cost-setting design] didn't matter too much.”

Retail prices caps for both gas and electricity have already been imposed by individual members across the EU.

Recouping a share: Additionally, “solidarity contributions” (read windfall taxes) will soon be levied on the profits of companies in the coal, gas, or petroleum business, which can be added on top of existing windfall taxes imposed by individual members.

Those funds will be returned to households and consumers.

What’s voluntary: Ministers also agreed to a voluntary overall reduction target of 10% of gross electricity consumption.

Euros and cents: The mandates add to what’s already been an extraordinary challenge for member governments, which have devoted hundreds of billions of euros to deal with this crisis, bailed out and nationalized major corporations, and will now be charged with enforcing these new demand reduction targets.

Europe has already over the last year set aside around 500 billion euros to help consumers and businesses manage the fallout from its energy crisis, according to one recent analysis: 314 billion euros from the EU27 and 178 billion euros from the U.K.

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.

ADVERTISEMENT

PUTIN ACCUSES ‘ANGLO-SAXONS’ OF BLOWING UP NORD STREAM PIPELINES: Russian President Vladimir Putin accused the U.S. and its allies today of carrying out the series of explosions along the Nord Stream natural gas pipelines—charges that were swiftly and vehemently denied by the U.S. and its allies, but are likely to further escalate tensions with Russia as the EU continues its investigations into the blasts.

Putin offered no evidence for the accusation, which he made during a ceremony in Moscow today to annex four regions of Ukraine into Russia. There, Putin claimed that the “Anglo-Saxons” in the West had moved past sanctions on its energy sector and onto “sabotage” of the Nord Stream pipelines linking Moscow to Germany. "They began to destroy the pan-European energy infrastructure," Putin said of the West, adding, "It is clear to everyone who benefits from this.”

His comments come one day after Spain’s energy minister, Teresa Ribera, blamed Russia. “It was a deliberate act and in my opinion it can very likely be linked to the push for constant provocation by the Kremlin,” Ribera said.

….Meanwhile, U.N. leaders gathered in New York for an emergency Security Council meeting to discuss the Nord Stream blasts. A major focus of that gathering will likely be to discuss new efforts to protect EU energy infrastructure, which leaders have warned is vulnerable to further attacks.

In particular, leaders are calling for more protection around the newly opened Baltic Pipe running between Norway and Poland. Many analysts have warned that Norway in particular should be on guard, since it is now Europe’s largest provider of natural gas.

“The Norwegian government has to realize that by far the most important strategic object in all of Europe now is the energy or gas imports from Norway," Tor Ivar Stroemmen, a senior lecturer at the Royal Norwegian Naval Academy, told Reuters earlier this week.

"If those deliveries should be cut or stopped or reduced by a large amount, this would cause a complete energy crisis in Europe,” he added.

HURRICANE IAN LATEST: President Joe Biden declared a state of emergency in South Carolina today, after Ian strengthened again to hurricane status and continued toward Charleston.

Hurricane warnings have been posted for the entire South Carolina coast and parts of North Carolina, with storm surge warnings are in effect for parts of North Carolina and Georgia.

The National Hurricane Center warned of "life-threatening flooding, storm surge and strong winds” in the Carolinas. “Ian could slightly strengthen before landfall tomorrow, and is forecast to rapidly weaken over the southeastern United States late Friday into Saturday," it said.

But Ian isn’t quite done with Florida yet. Two days after tearing into the southwest Florida coast a “major” Category 4 hurricane, Ian continues to bring “major to record” flooding through parts of central Florida. Meanwhile, emergency crews are continuing search and rescue efforts in some of the worst-hit areas, with more 700 confirmed rescues so far.

Gov. Ron DeSantis said recovery efforts will be a “24/7” operation in the days to come, saying the damage Ian caused is “almost indescribable.”

… Related: The Houston Chronicle has a deep-dive on the status of the “Ike Dike,” or the massive, $31 billion coastal barrier project designed to protect the Houston region from hurricane-related catastrophic floods and storm surge. (It’s named after Hurricane Ike, which made landfall in Galveston in 2008.)

PRINCETON TO DIVEST FROM 90 FOSSIL FUEL COMPANIES: Princeton University announced yesterday that it will cut ties with 90 fossil fuel companies, including ExxonMobil, NRG, and Suncor, as it seeks to deliver on its commitment to achieving a net-zero emissions endowment portfolio.

Princeton said its board of trustees voted earlier this month to disassociate from the companies, which it said are “all active in the thermal coal or tar sands segments of the fossil fuel industry, which are among the sector’s largest contributors to carbon emissions.”

In addition, Princeton said its university endowment, the fourth-largest in the United States, “will also eliminate all holdings in publicly traded fossil-fuel companies.”

To make up for the lost revenue, the university said it will establish a new fund to support energy research, in part to offset research funding it said is “no longer available because of dissociation.”

The decision follows in the steps of other universities, including Harvard, Brown, and the University of California, which have also made similar pledges to cut ties with the fossil fuel industry.

HOUSE COMMITTEE APPROVES UPDATE OF U.S. FISHING LAWS: Members of the House Natural Resources Committee voted to advance legislation to reauthorize U.S. fishing laws for the first time in 15 years.

The Sustaining America’s Fisheries for the Future Act seeks to make fishery management more adaptive to the impacts of climate change. It also calls for implementing working waterfront plans, establishing more innovative data collection technology for fisheries management, and establishing a standardized national reporting program for bycatch.

FED SAYS SIX MEGABANKS WILL PERFORM 2023 CLIMATE SCENARIO ANALYSIS: The Federal Reserve announced yesterday that six of the nation’s largest banks will participate in a pilot climate risk analysis exercise set to begin next year.

The exercise will test the banks’ resiliency under different hypothetical climate scenarios, the Washington Examiner’s Zachary Halaschak reports, and is similar to an effort being undertaken by European regulators. The banks that will take part in the pilot are Bank of America, Citigroup, Goldman Sachs, JPMorgan Chase, Morgan Stanley, and Wells Fargo.

The exercise has been a priority for Democrats, who have sought to better understand the relationship between major financial firms and the environment, as well as examine the risks that climate change could present to banks.

Republicans, though, see it as a step toward climate regulation via the financial system. "There is no risk from global warming that banks aren’t already fully capable of pricing into their decisions, and the Fed’s intrusion into this process only underscores that the real risk is government," said Pat Toomey, the top Republican on the Senate Banking Committee. "The real purpose of this program is to ultimately produce new regulatory requirements.”

MANCHIN BEGRUDGING LEFT AND RIGHT FOR PERMITTING FAILURE: Sen. Joe Manchin continues to call out colleagues on either side of him for tanking his attempt at permitting reform as the House prepares to pass a short-term government funding bill today sans his reform bill.

It’s “illogical” that Republicans would ”allow election year politics to interfere with the energy needs of the nation,” Manchin said in recorded remarks aired yesterday at the annual Marcellus Shale Coalition-hosted Shale Insight 2022 conference.

Manchin also said it’s “wrong for Democrats on the far left to suggest it’s their way or the highway in order to make the changes necessary to achieve our security and climate goals.”

Environmental groups and Democrats who opposed the proposal notched a victory Tuesday when Manchin announced he’d asked Majority Leader Chuck Schumer to remove his bill from the package, although Schumer said they’d try again to pass something this year, teeing up another battle between the pro-reform lot and members and green groups who consider proposed streamlining of reviews to weaken environmental protection.

Many Republicans, who seek expansive permitting reforms, too, also opposed Manchin’s measure.

Bonus: How Dr. Oz might vote: How the Senate races shake out could determine the success or failure of efforts at reform, should they fail this Congress.

Mehmet Oz, who’s facing off against Democratic nominee John Fetterman in Pennsylvania, said his sense was that Manchin’s proposal didn’t go far enough, while he suggested he’d be open to supporting anything that speeds up the review and permitting of pipeline projects were he to be elected.

“We have to take the bureaucracy out of this process,” Oz told Jeremy, likening the hurdles for project developers to the difficulty he had getting his heart device design approved by the FDA. It took 15 years, he said.

“If you have a life saving device, you try to get it to market quickly. Energy is life-saving, life-changing,” Oz said.

The Rundown

Associated Press In one tiny German town, nobody worries about energy bills

Bloomberg How is crypto affecting the climate?

New York Times Mexico named deadliest country for environmental activists

ADVERTISEMENT

Calendar

TUESDAY | OCTOBER 4

2:00 p.m. The American Association for the Advancement of Science holds a virtual discussion on "Advances in PFAS (Perfluoroalkyl and Polyfluoroalkyl Substances) Destruction." Learn more and register here.

THURSDAY | OCTOBER 6 

1:00 p.m. The Nuclear Regulatory Commission will convene virtually for its meeting of the Advisory Committee on Advanced Nuclear Reactor Safeguards, or ACRS