Daily on Energy: Energy officials testify, E15, and solar to eclipse coal in Texas

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TRUMP’S ENERGY AND ENVIRONMENT SECRETARIES HEAD TO THE HILL: All three of President Donald Trump’s energy and environment cabinet members appeared before Congress today, clashing with Democrats on proposed budget cuts from the White House, the war in Iran, and the administration’s crackdown on renewable energy projects. 

Zeldin in the Senate: Environmental Protection Agency Administrator Lee Zeldin testified before the Senate Appropriations subcommittee on environmental policy, where Democrats asked the administrator about the agency’s changes to estimates of the health benefits of its regulations. 

The senator was referring to the agency’s rulemaking earlier this year, where the EPA said it would no longer be considering the monetary value of health benefits when it sets regulations on fine particles and ozone because of uncertainty regarding the economic impacts. 

“As we update the modeling, working with our dedicated career scientists at EPA, rather than setting an arbitrary number to it, we look forward to being able to put a number to it that has the support of the Science Advisory Board and the scientific community,” Zeldin said. 

In its rule, the agency said earlier this year it will not provide the cost of the health benefits “until the agency is confident enough in the modeling to properly monetize those impacts.” 

Burgum in the House: During his appearance before the House Natural Resources Committee, Interior Secretary Doug Burgum confirmed that the administration will be appealing an April district court ruling that ordered Interior to end a set of policies delaying permits for wind and solar. 

“The idea that a single judge could decide what the process that we’re supposed to go through internally to make sure that we’re complying with the law through a complex permitting process is absurd,” he said.

Several Democrats on the committee criticized Burgum and the administration for its crackdown on renewable energy projects, saying that stalling wind and solar permits is allowing nations like China to get ahead of the U.S. in the race for artificial intelligence.

Burgum stood firm with the administration’s messaging that it is in favor of all energy resources, as long as they are reliable and dispatchable. 

“When the sun goes down, [solar projects] produce zero electricity,” he said. “And this nation over-rotated towards intermittent forms of energy. And the idea that we could add intermittent and shut down baseload is what put our grid at deep risk.” 

Ranking Member Jared Huffman appeared to mock Burgum for this view, announcing that he was requesting unanimous consent to enter information into the hearing’s official record on “this amazing new technology that apparently the secretary is unaware of” called a “battery.” 

Wright in the Senate: Energy Secretary Chris Wright spoke before the Senate Armed Services Committee, where he said that Iran is extremely close to producing weapons-grade uranium. 

“They are a small number of weeks away to enrich that to weapons-grade uranium. There’s still a weaponization process that happens after that, but they’re quite close,” Wright told the panel.

The House last month passed the farm bill, reauthorizing food and agriculture programs for the next five years. However, they were unable to pass a provision on the year-round sale of E15. 

Republican leaders agreed to decouple the bill and E15, resulting in the House scheduling a standalone vote today. 

The Republican Party for several weeks has struggled to pass a plan for the year-round sale of E15, a fuel blend containing 10.5% to 15% ethanol blended with gasoline that has been restricted due to smog concerns. 

For weeks, there has been disagreement among Republican lawmakers from oil states and corn states over the sale of E15. Farmers have pushed for year-round sale, arguing it would boost corn demand. However, small refiners have raised economic concerns over complying with higher ethanol mandates. 

SOLAR EXPECTED TO SURPASS COAL IN TEXAS THIS YEAR: The Department of Energy’s Energy Information Administration is now estimating that electricity generation from solar power will exceed that produced by coal in Texas for the first time this year. 

The details: In an analysis released earlier today, the EIA said that solar generation will reach 78 billion kilowatt hours this year in Texas’s electricity grid, best known as ERCOT. By comparison, coal is expected to hit 60 billion kilowatt hours. 

The EIA is forecasting that roughly 40% of new solar capacity additions added across the country this year will be installed in Texas. This includes a 837-megawatt solar and battery energy storage system project southeast of Dallas. The EIA is not tracking any new coal plants to be built in ERCOT. 

It’s important to note that solar generation in Texas is still far behind the largest source of electricity generation in ERCOT, natural gas. The traditional fossil fuel made up around 44% of electricity generation in the region between 2021 and 2025. During that same timeframe, solar’s share increased from 4% to 12%. Coal, meanwhile, decreased from 19% to 13%. 

IEA WARNS GLOBAL OIL DEMAND WILL OUTPACE SUPPLY DUE TO IRAN WAR: Worries of a global crude supply glut are long gone, as the International Energy Agency is now warning that worldwide demand for oil will outpace supply this year as the war in Iran continues. 

The details: The Paris-based agency said in its May oil market report this morning that global oil supply dropped by another 1.8 million barrels per day last month. This brings the total supply losses seen since the war began to around 12.8 million barrels per day. 

The IEA said these losses are occurring at a “record pace,” while also causing demand destruction. The agency is now projecting that global oil demand will drop by 420,000 barrels per day in 2026, more than double its previous forecast of an 80,000 barrel per day decline. This still outpaces supply, as the IEA is forecasting total global crude demand this year to be around 104 million barrels per day while supply will sit around 102.2 million barrels per day. 

These market disruptions are directly tied to the closure of the Strait of Hormuz, and even if the waterway were to reopen today, the IEA says it will take months to return to normal. The agency also warned that it expects there to be further price volatility ahead of peak summer demand, meaning oil prices could soar even higher in just a matter of weeks. 

Plus…OPEC cuts oil demand forecast: OPEC also slashed its demand growth forecast this year, lowering the projection to around 1.2 million barrels per day. Previously, the oil-producing bloc estimated that demand would grow by 1.4 million barrels per day. 

Wednesday’s update comes just weeks after the United Arab Emirates, one of the group’s largest producers, said it was exiting OPEC. 

OIL PRICES DIP SLIGHTLY: While the situation in Iran remains largely unchanged, oil prices fell today by around 1%.

Just after 3 p.m., international benchmark Brent Crude dropped by 1.99%, selling at under $106 per barrel. West Texas Intermediate was also down 1.23% and priced at just under $101 per barrel.

Reuters reported that this small dip could be attributed to fears over U.S. interest rate hikes, as higher rates could slow economic growth and curb demand. Earlier today, Boston Federal Reserve President Susan Collins warned that the Fed may need to increase interest rates over pressures from inflation. 

EUROPEAN REGULATORS WARN OF GROWING RELIANCE ON US NATURAL GAS: Energy regulators warned European Union countries about overreliance on U.S. natural gas supplies, Reuters reports. 

“The EU’s reliance on U.S. LNG may raise questions ⁠of dependency on a single supplying country,” the EU Agency for the Cooperation of Energy Regulators said in a report.

European countries have moved to reduce dependence on Russian natural gas following its invasion of Ukraine. EU countries have since tripled their imports of U.S. LNG since 2021. Reuters said that EU countries obtained about 58% of their LNG from the U.S. in 2021. 

Europe’s supply of LNG has been further tightened due to the war in Iran. For instance, Qatari LNG exports have been significantly disrupted because of the war. Qatar provided more than 25% of its production to Europe in 2022. 

Reuters said that the U.S. is on track to become Europe’s biggest gas supplier this year. The U.S. could provide about 80% of the EU’s LNG by 2028, according to data from the Institute for Energy Economics and Financial Analysis.

The Associated Press Price shocks from the Iran war power solar sales in energy-hungry Asia