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WIRTH VERSUS ENERGY TRANSITION AMBITIONS: Chevron Chairman and CEO Mike Wirth is pointing out a reality about energy and the green transition: Demand for fossil fuels keeps increasing, even among the greenest economies.

Wirth, in an interview published today, said Western governments have undervalued oil and gas and discouraged investment in the two in service of climate change mitigation targets. Many of these governments, including the United States and those across Europe, are now seeking out more of these fuels and endorsing the construction of new fossil fuel infrastructure to reckon with an acute energy crisis.

The Biden administration and the EU are also introducing energy demand reductions measures, both as a means of reducing emissions and prices. Some of those measures are voluntary, some of them are by mandate, and still some others by regulatory fiat that put efficiency strictures on technologies.

Demand reduction measures have inherent limits, though, Wirth said.

“If people want to stop driving, stop flying . . . that’s a choice for society,” Wirth told the Financial Times. “I don’t think most people want to move backwards in terms of their quality of their life . . . our products enable that.”

What else he said: The Biden administration has been seeking cooperation from Chevron and other integrated energy companies like it to do more to bring down the high cost of retail fuel. Officials have said the majors are exploiting the price and supply crisis for their own financial gain and have not ruled out restrictions on petroleum exports, angering an industry that has seen profits balloon on higher prices and higher refined product exports.

Wirth, who emerged over the summer as something of a foil to President Joe Biden, said there’s “not a lot of deep energy expertise in the administration,” whose strategy for dealing with the energy crisis he called “all tactical.”

“There’s a point of view that you find quite visible in the administration that we can move from system A to system B very quickly and easily. And it’s not that simple,” he said.

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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WHITE HOUSE REJECTS SAUDI DEFENSE OF OPEC+ CUT: National Security Council spokesman John Kirby rejected the Saudi government’s defense of OPEC+’s oil production cut, saying the Saudis knew the production cut they sought would “increase Russian revenues and blunt the effectiveness of sanctions” against the intentions of those countries seeking to punish Russia for the war in Ukraine.

The Saudis and OPEC delegates insist the headline 2 million barrel per day cut was to serve the market and reduce volatility. Kirby said in a statement this morning there was “no market basis” for the cut, and that the administration tried to convince the cartel of it.

“We presented Saudi Arabia with analysis to show that there was no market basis to cut production targets, and that they could easily wait for the next OPEC meeting to see how things developed,” he said.

Other OPEC nations told the administration that they disagreed with the Saudis’ push for the production cut but “felt coerced” to support it, Kirby also said.

Kirby’s words followed publication of a lengthy statement by the Saudi government earlier today, which counteracted days of public criticism from the Biden administration, including the White House-endorsed “reevaluation” of the U.S.-Saudi relationship, following OPEC+’s production cut announcement.

One thing the Saudi Ministry of Foreign Affairs sought to do with the statement was to downplay its prevailing influence in the cartel. “This decision was taken unanimously by all member states of the OPEC+ group,” the foreign ministry said.

It also disputed again the notion that it was acting with the cut to build up cartel ally Russia, whose oil sector is losing market share in Europe and is about to lose more and has been smacked by war-related sanctions. And, it confirmed reporting from the Wall Street Journal that the Biden team had asked OPEC to delay its production cut decision by a month.

Doing so would have had negative economic consequences, the Saudis said.

The Saudis are far and away OPEC’s largest producer, and, even if it doesn’t hold the secretaryship currently, it’s widely seen as the cartel’s de-facto leader that really controls the levers over production.

When oil prices first really began their big rebound last year, Biden pretty immediately turned to the Saudis as the answer to high prices.

“There’s a possibility to be able to bring it down, depends on — little bit on Saudi Arabia and a few other things that are in the offing,” he said during a CNN town hall event a year ago this month.

OPEC+ SUPPLY CUT COULD TIP WORLD INTO RECESSION, IEA WARNS: "With unrelenting inflationary pressures and interest rate hikes taking their toll, higher oil prices may prove the tipping point for a global economy already on the brink of recession," the International Energy Agency said in its new monthly oil market report today.

IEA also slashed its forecast for oil demand growth in 2023 by 470,000 barrels per day, a 20% reduction from previous estimates, and dropped its oil demand forecast through the rest of 2022 by 60,000 barrels per day down to 1.9 million bpd — a sharp drop compared to the 3.2 million barrels per day forecast this year prior to Russia’s invasion of Ukraine.

Analysts are also bracing for further turmoil in December, when an EU embargo on Russian seaborne crude imports and a G-7 oil price cap are slated to take effect, noting that Russian officials have threatened to cut oil production in order to offset the anticipated negative impact of proposed price caps.

SRI LANKA UPS ITS IMPORTS OF DISCOUNTED RUSSIAN OIL: Sri Lanka has sharply increased its imports of Russian crude, following in the steps of India and China as they also seek to capitalize on the sharply discounted prices caused Western sanctions. The Financial Times reports that Sri Lanka has imported more than half its crude from Russia since May—helping to alleviate a severe fuel shortage that brought its economy to a standstill earlier this year.

The move is significant, marking the first time Sri Lanka has imported Russian crude since 2013.

…AND IT COULD PREVIEW A LONGER-TERM TREND: Analysts also predicted that other cash-strapped nations will follow suit in the months ahead, allowing Russia to reroute its existing oil exports—albeit for a much lower price than they previously earned from European buyers.

Sri Lanka was “a bellwether of what we can expect poorer nations to look to be doing over the next few months”, OilX senior analyst Neil Crosby told the Financial Times. “They’re trying to reduce their import costs, they’re under financing pressure and in that context, Russian barrels look very tempting.”

Still, others said the real test for Russia and its new buyers will come in December, when risks increase “around insurance, banking, finance, shipping provision [and] additional US sanctions,” said David Fyfe, the chief economist at commodities data provider Argus.

“Assuming the current conditions continue, if you were being offered crude at $25, $30 per barrel below [the Brent benchmark] . . . why wouldn’t emerging economies purchase Russian oil?”

SALTON SEA SHRINKING DUE TO COLORADO RIVER SHORTAGE: A new study argues that a decline in Colorado River flow is the primary driver of the falling water levels at California’s Salton Sea, the state’s largest and most polluted lake.

Water levels at the Salton Sea—a former vacation hotspot for Californians turned “toxic nightmare”— have been steadily receding for 25 years, exposing nearby communities to toxic chemicals and causing a massive die-off in fish and birds, including endangered species.

Now, the new study, published in the journal Water Resources Research, points to the drop in inflow from the Colorado River as the main reason for the decline.

Researchers at UC Riverside made the determination after studying various inflows that impact the lake’s water balance, including factors that impact the surrounding area such as climate and soil type. “There is less water coming from the Colorado River into the Sea, and that is driving the problem,” said Hoori Ajami, a UC Riverside hydrologist and one of the study’s co-authors, said in a statement.

It remains unclear whether the lower Colorado River supply is caused by drought or by its resources being diverted to other areas in the West. The Colorado River supplies drinking water to roughly 40 million people in seven U.S. states.

NASA SPACE COOLING SYSTEM COULD SLASH EV CHARGING TIME TO 5 MINUTES: New experimental cooling system technology tested by NASA to lower the temperatures of its equipment in space could eventually be used to charge electric vehicles in five minutes or less.

The new technology utilizes what’s known as "subcooled flow boiling," and is being developed alongside researchers at Purdue University, NASA said in a blog post.

But it could also be a game-changer for electric vehicles as well. NASA said the technology could allow EVs to charge at a level of 1,400 amps—more than double the highest available advanced system, which delivers max currents of 520 amperes, and far higher than the 150 amperes available to most consumers.

“Application of this new technology resulted in unprecedented reduction of the time required to charge a vehicle and may remove one of the key barriers to worldwide adoption of electric vehicles,” NASA wrote.

The Rundown

Bloomberg Biden is walking a tightrope as the world clamors for US oil and gas

E&E News How activists put the ‘climate emergency’ on the map

Associated Press People with disabilities left out of climate planning

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Calendar

FRIDAY | OCTOBER 14

8:00 MT Rep. John Curtis, chairman of the Conservative Climate Caucus, hosts the Conservative Climate Summit at the University of Utah. Former national security advisor Robert O’Brien will be among the speakers.