Armstrong on Pikka. Trump targets outraise opponents. US Coal Miner Surges.

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Spain Is Canary in the Mine for Europe’s Emerging Energy Crisis
Alonso Soto, Vanessa Dezem and Joao Lima, BNN Bloomberg News, October 16, 2021

For European nations looking for ways to protect their citizens and businesses from skyrocketing energy prices, Spain has a dispiriting message: there’s only so much governments can do.

After months of devising policies to cap the pain of a record surge in gas and power prices amid supply shortages, Spain’s Socialist Prime Minister Pedro Sanchez on Thursday did a volte-face, effectively conceding that the measures were doing more harm than good. 

Although an extreme case — Spain relies more on imports for its energy needs than most European Union nations — the country’s experience shows what lies in store for the region as it heads into the colder, gas-burning months of winter. While the energy crisis has forced itself on the agenda of the EU’s Oct. 21-22 summit when emergency measures to blunt its impact are set to get a nod, the case of Spain shows how sparse the toolbox is to fight the surge.

“No matter how much you remove taxes, global prices continue to rise, which makes these measures useless and you only lose revenue,” said Juan Carlos Martinez, economics professor at IE University in Madrid. “There is not much room for this or other governments to fight soaring prices. Things will get worse. Electricity will look like a joke compared to gas when we get to winter.”

Knowing how vulnerable it is, Spain began its fight to temper the impact of rallying natural gas prices and limited supplies as early as in June, putting in place temporary tax cuts to lower consumers’ gas bills. That did little to stop electricity prices from jumping a whopping 11% in August and driving Spanish inflation to its highest in 13 years.

Then, back from its summer break, the government in mid-September scrambled to put in place a patchwork of policies through an executive decree that, among other things, imposed a windfall tax on utilities. Again, the results were dismal: utilities lost billions in market value, while electricity prices continued to set daily records.

Spain’s biggest energy companies, Endesa SA, Iberdrola SA and Naturgy Energy Group SA, had argued that large parts of their power is sold through long-term contracts and should be exempt from the windfall tax. Failing that, they sent out letters to their industrial clients informing them that prices would have to be revised. One steelmaker, Sidenor Aceros Especiales SL, announced on Monday that it would stop operations, citing higher power prices.

Utilities also said that prior to the September decree, 75% of the country’s energy demand had fixed prices. They said the measures would transfer the cost of the crisis to consumers who weren’t affected before.

The implications for the broader economy forced Sanchez to reel back the measures on Thursday, saying they would need to be strongly nuanced. His Ecological Transition Minister Teresa Ribera, who oversees energy, made similar noises. Ribera and Sanchez both said utilities that offer prices to industrial users at the same levels as before the surge in gas prices wouldn’t be hit by the new levies. 

More damningly, Ribera told Parliament on Thursday that the estimates made by the government in September were already outdated and needed revising, underlining the difficulties of trying to control a situation that stems from global supply and demand dynamics.

Granted, Spain is particularly vulnerable to international gas-price fluctuations. It doesn’t have significant gas pipelines connecting it to the rest of Europe, and so has to rely on imports from northern Africa and large amounts of liquefied natural gas. When LNG demand is high in other parts of the world, like Japan, it competes in tight markets.

With imports accounting for about 75% of its energy, Spain was fifth among 40 European nations tracked by Eurostat in 2019, prior to the Covid-crisis. The country ranks second in its dependency among major EU economies. 

Still, every country is trying to cap end-user prices.  

“While the shock has its own particularities in each country, the political challenge other European governments face is similar,” said Antonio Barroso, a managing director at Teneo. “High power prices, whether of gas or electricity, are extremely politically toxic. The incentive to adopt measures to protect consumers as much as possible is quite strong.”

Countries across Europe are trying to tackle the hike in energy prices through different ways — from price caps for default tariffs that protect 11 million people in the U.K. and burning more oil in Sweden to plans for small nuclear reactors in France. 

For its part, as Spain struggles to confront the crisis, the very pro-EU government in Madrid has found Brussels wanting. Its proposal to get the bloc to make pooled purchases of energy supplies — not unlike the EU’s joint acquisition of Covid19 vaccines — has gone nowhere. 

The EU has effectively shown that it has a limited scope to enact a joint plan to alleviate the impact of the crisis — a move made difficult by the varying energy sources and strategic interests of member states.

“It’s very hard to put a band aid on the power market,” said Rob Barnett, an analyst at Bloomberg Intelligence.


Behind the Energy Crisis: Fossil Fuel Investment Drops, and Renewables Aren’t Ready
Christopher M. Matthews, Collin Eaton, Benoit Faucon, The Wall Street Journal, October 17, 2021

An energy price shock is serving as a reminder of the world’s continued dependency on fossil fuels—even amid efforts to shift to renewable sources of energy.

Demand for oil, coal and natural gas has skyrocketed world-wide in recent weeks as unusual weather conditions and resurgent economies emerging from the pandemic combine to create energy shortages from China to Brazil to the U.K.

The situation has laid bare the fragility of global supplies as countries drive to pivot from fossil fuels to cleaner sources of energy, a shift many investors and governments are trying to accelerate amid concerns about climate change.

The transition figures to be challenging for years to come, energy executives and analysts say, due to a stark reality: While fossil fuel investment is falling, fossil fuels account for most energy—and green energy spending isn’t growing fast enough to fill the gap.

Supply Shift

In order to reduce the world’s net carbon emissions to zero by 2050, renewable energy sources must quickly displace oil and other fossil fuels.

Projected market share of energy supply to reach zero emissions

Demand for power remains robust even as supply chains begin to strain. In some cases, supplies of renewable resources such as wind and hydroelectric power have fallen short of forecasts, further boosting demand for fossil fuels.

The International Energy Agency, a group that advises countries on energy policies, this month projected global oil demand will reach about 99.6 million barrels a day next year, near pre-pandemic levels. It forecasts that coal demand is set to exceed 2019 levels this year and rise somewhat until 2025, though how quickly it falls from there will depend on government actions to phase out the fuel.

“A lot less product is available to meet this now rapid growth we’re seeing,” Exxon Mobil Corp. Chief Executive Darren Woods said in virtual remarks at a conference in Russia Wednesday. “If we don’t balance the demand equation and only address the supply, it will lead to additional volatility.”

The world’s oil production is still rising but struggling to catch up with a surge in consumption from countries recovering from the pandemic, according to the U.S. Energy Information Administration.

Oil investments dry up

Global oil and gas exploration spending, excluding shale, averaged about $100 billion a year from 2010 to 2015, but dropped to an average of around $50 billion in the years that followed after a crash in crude prices, according to Rystad Energy.

Total global oil and gas investment this year will be down about 26% from pre-pandemic levels to $356 billion, the IEA said Wednesday. That is about where it would need to remain for the next decade, before declining further, to meet the goals of the Paris agreement, according to the IEA. The international pact seeks to limit global temperature increases to no more than two degrees Celsius from preindustrial levels, and preferably 1.5 degrees.

To meet global energy demand, as well as climate aspirations, investments in clean energy would need to grow from around $1.1 trillion this year to $3.4 trillion a year until 2030, the Paris-based agency found. Investment would advance technology, transmission, and storage, among other things.

“The world isn’t investing enough to meet its future energy needs, and uncertainties over policies and demand trajectories create a strong risk of a volatile period ahead for energy markets,” the IEA report said. It added that ramping up renewables would require greatly enhanced spending in other sectors, such as mining, to produce and refine the raw materials needed for wind turbines, solar arrays, and utility-scale battery storage.

The development of wind and solar farms and other renewable power sources has accelerated within the past two decades as the technologies have dropped in costs due to economies of scale, becoming more competitive with fossil-fuel based electricity generation. Global renewable energy capacity, excluding hydropower and pumped storage, topped 1.5 million megawatts last year, according to the International Renewable Energy Agency, up from less than 55,000 megawatts in 2000.

Greener sources have gained market share in the U.S. and Europe, aided by government subsidies and other policies aimed at reducing the use of coal, the dirtiest fossil fuel. In 2019, before the onset of the pandemic, the U.S. consumed more renewable energy than coal for the first time since 1885.

That growth is expected to continue. The world added 280,000 megawatts of renewable electricity last year, up 45% from the prior year, according to the IEA. The agency called that growth rate “the new normal” and expects similar amounts to be added this year and next year.

Still, fossil fuels make up the majority of power generation globally. Renewables accounted for 26% of global electricity generation in 2019, according to IRENA.

Heading to Glasgow

World leaders set to gather for a major climate change conference in Glasgow in two weeks are aiming to accelerate the transition to cleaner energy to reduce greenhouse gas emissions. But they are still grappling with core questions that have complicated such negotiations for decades, including whether richer countries will pay to help poorer countries make the shift.

Supply-chain issues also constrain how quickly the world can increase wind and solar power. Most solar arrays are currently produced with energy from coal-fired power plants in China, which supplies more than three fourths of the world’s polysilicon. Some Western governments and companies are attempting to shift solar manufacturing away from coal, but that threatens to drive up solar costs.

In addition to greening the power grid, many countries are advancing policies to speed a shift to electric vehicles. That is poised to reduce the amount of oil used in transportation, which currently makes up around 60% of oil demand according to the IEA. But while nearly all major auto makers including General Motors Co. and Volkswagen AG are betting big on EV production, and sales are gaining traction, adoption is expected to be gradual.

In Europe, which experienced a decline in power generation partly due to an unusual slowdown in offshore wind speeds, natural-gas prices have almost tripled in three months, leading some fertilizer makers to halt production because they can no longer produce it economically. In China, electricity shortfalls caused by high coal prices led local officials to curtail hours at some factories, affecting production of semiconductors and other key exports.

The U.S. has been less affected than other countries, but it too has seen higher prices, and concerns about further increases in winter are mounting. On Wednesday, the U.S. Energy Information Administration warned that the nearly half of American households that primarily warm their homes with natural gas will spend an average of 30% more on their bills compared with last year.

Prices of Brent crude, the global benchmark, topped $85 a barrel Friday, their highest level in three years. Traders are betting prices will continue to rise, stoking a roaring options market.

One factor weighing on crude is that gas and coal shortages are pressuring some power plant operators and manufacturers to burn oil instead.

Saudi Arabian Oil Co., known as Aramco, said this month that it plans to increase its oil production capacity from 12 million to 13 million barrels a day by 2027. Rival Abu Dhabi National Oil, the main oil producer in the United Arab Emirates, said it would be spending $122 billion in part to boost its oil production capacity to five million barrels a day by the end of the decade, from about four million a day today.

Overall, OPEC estimates the world is projected to require $11.8 trillion in oil-and-gas investment through 2045 to meet growing demand. In a report released last month, it predicted its members’ oil will constitute 39% of global crude consumption in 2045, up from about 33% now.

“We are witnessing strains and conflicts related to energy affordability, energy security and reducing emissions,” said Mohammed Barkindo, OPEC’s secretary-general, in an interview last month.

California’s rocky transition

Governments trying to fast-track a transition to cleaner sources of energy are finding that it requires vast amounts of investment and can meet unexpected obstacles. In the U.S., California is in the midst of retiring numerous fossil-fuel power plants to help decarbonize its power grid by 2045, as a state law requires.

The California Public Utilities Commission has ordered utilities to buy an unprecedented amount of renewable energy, battery storage and other carbon-free resources to fill the gap and keep up with growth in coming years: more than 14,000 megawatts, or roughly a third of the state’s forecast for peak summer demand.

While the companies are on track thus far, the California Energy Commission and the state’s grid operator recently expressed concern that the purchases may not be enough to prevent electricity shortages in the coming summers. The state is also planning to retire its last nuclear power plant, Diablo Canyon, which generates nearly 10% of the electricity in the state, by 2025.

California has narrowly avoided rolling blackouts this year, amid wildfires that have disrupted power transmission and a severe drought that has reduced hydroelectric production throughout the West, including from the Hoover Dam.

The state’s power grid operator has called on residents to conserve power several times this summer and took emergency measures to buy additional supplies to reduce the risk of blackouts. The state also recently added four temporary natural-gas generators at power plants to help alleviate the shortage.

‘Long, long goodbye’

After years of losing money on America’s shale oil boom, which produced ample supplies, but few profits, investors and Wall Street financiers alike are clamoring for companies to limit investment in future projects and return cash to them instead.

That push has stunted growth in all but one of the oil fields that fueled the shale boom. Companies like Continental Resources Inc. in North Dakota’s Bakken field and EOG Resources Inc. in South Texas’ Eagle Ford shale kicked off the boom back when oil often fetched more than $100 a barrel. But producers in those regions have drilled up some of the most prolific land and are running into limitations juicing as much oil from new wells in maturing fields. This year, oil output for almost all of the 20 largest producers in both the Eagle Ford and Bakken has stayed below pre-pandemic levels, according to data from ShaleProfile, an industry analytics platform.

“We’re starting the long, long goodbye,” Bob Fryklund, a strategist at IHS Markit, said of the Bakken and Eagle Ford plays.

The only place in the contiguous U.S. that shale companies are growing is the Permian Basin in West Texas and New Mexico. But even there, production has yet to fully recover, and the companies dispatching more drilling rigs are typically smaller, private operators that don’t have the muscle to lift output significantly. Larger, publicly traded producers have restrained Permian activity, and only eight of the 20 top producers had output above March 2020 levels as of July, the latest ShaleProfile data show.

“We’ll be lucky to grow 5% a year over the next several years in the Lower 48 [U.S. states],” Scott Sheffield, chief executive of Pioneer Natural Resources Co., the largest producer in the Permian, told investors in August.

Alaskan oil production is also in sharp retreat. Many of the largest Western oil companies have pulled back from Alaska, including BP PLC, which sold its North Slope properties to closely held Hilcorp Energy in 2020 for $5.6 billion.

Last year, production in Alaska fell to an average of 448,000 barrels a day, a 20-year-low, according to the EIA. Though vast reserves of untapped oil and gas remain in the state, a combination of forces are constraining investment. One of the most significant is a lack of financing. Under pressure from environmental groups, the six largest U.S. banks have pledged in recent years not to finance additional Arctic drilling.

Wildcatter Bill Armstrong, founder of Armstrong Oil & Gas Inc., which made one the largest oil finds in U.S. history in the North Slope in 2013, argues that as long as crude demand remains strong, investors’ pullback from Alaska will only result in development in countries with less stringent regulations.

Mr. Armstrong sold his interest in the find, known as the Pikka unit, to Oil Search Ltd. for $850 million. The company, which agreed to merge with Australia’s Santos Ltd. in August, has said it had trouble lining up bank financing and is years away from production.

“It’s just been sitting there,” Mr. Armstrong said of the discovery. “It’s like its own OPEC country once it gets online. But we kind of need it now.”


EXCLUSIVE-China looks to lock in U.S. LNG as energy crunch raises concerns  
Chen Aizhu, Jessica Jaganathan, Scott DiSavino, Reuters, October 15, 2021

Major Chinese energy companies are in advanced talks with U.S. exporters to secure long-term liquefied natural gas (LNG)supplies, as soaring gas prices and domestic power shortages heighten concerns about the country’s fuel security, several sources said.

At least five Chinese firms, including state major Sinopec Corp 0386.HK and China National Offshore Oil Company (CNOOC) and local government-backed energy distributors like Zhejiang Energy, are in discussions with U.S. exporters, mainly Cheniere Energy LNG.A and Venture Global, the sources told Reuters.

The discussions could lead to deals worth tens of billions of dollars that would mark a surge in China’s LNG imports from the United States. At the height of Sino-U.S. trade war in 2019, gas trade briefly came to a standstill.

Talks with U.S. suppliers began early this year but speeded up in recent months amid one of the biggest power-generating, heating fuel crunch in decades. Natural gas prices in Asia have jumped more than fivefold this year, sparking fears of power shortages in the winter.

“Companies faced a supply gap (for winter) and surging prices. Talks really picked up since August when spot prices touched $15/mmbtu”, said a Beijing-based senior industry source briefed on the talks.

Another Beijing-based source said: “After experiencing the recent massive market volatility, some buyers were regretting that they didn’t sign enough long-term supplies.”

Sources expected fresh deals to be announced over the coming few months, after privately controlled ENN Natural Gas Co, 600803.SS, headed by the ex-LNG chief of China’s largest buyer, CNOOC, announced a 13-year deal with Cheniere on Monday.

It was the first major U.S.-China LNG deal since 2018.

The new purchases will also cement China’s position as the world’s top LNG buyer, taking over from Japan this year.

“As state-owned enterprises, companies are all under pressure to keep security of supply and the recent price trend has deeply changed the image of long-term supplies in the mind of leadership,” said the first Beijing-based trader.

“People may have taken the spot (market) as the key in the past but are now realizing that long-term cargoes are the backbone.”


The sources declined to be named as the negotiations are private.

Sinopec declined comment. CNOOC and Zhejiang Energy did not immediately respond to requests for comment.

Venture Global declined comment. Cheniere did not immediately respond to a request for comment.

“We expect more deals to be signed before year-end. It’s primarily driven by the global energy crunch and prices we’re seeing now… U.S. supplies now stand out as attractive,” said a third Beijing source briefed on the talks.

U.S. cargoes used to be expensive versus oil-linked supplies from Qatar and Australia for example but are cheaper now.

A deal at $2.50 + 115% of Henry Hub futures NGc1, similar to ENN’s deal according to traders, would be roughly about $9-$10 per million British thermal units (mmBtu) on a delivered basis into Northeast Asia. This includes an average shipping cost of $2 per mmBtu for the U.S.-China route.

Jason Feer, global head of business intelligence with consultancy Poten & Partners said Chinese companies are heavily exposed to Brent-related pricing for LNG and the U.S. purchases give some diversity to the pricing.

Asian spot gas prices LNG-AS are now at a near record at over $30 per mmBtu. Long-term LNG deals linked to oil prices work out to about $10-11 per mmBtu, though both calculations vary according to liquefaction costs, premiums and assumption of forward oil and gas prices.

Chinese buyers are scouting for both near-term shipments to cover demand this winter and long-term imports as demand for gas, seen by Beijing a key bridge fuel before reaching its 2060 carbon-neutral goal, is set for steady growth through 2035.

It’s hard to estimate a total volume of the deals being discussed, sources said, but Sinopec alone could be eyeing 4 million tonnes annually as the company is most exposed to the spot market versus domestic rivals PetroChina and CNOOC, said a third source.

Traders said Sinopec is in final talks with 3 to 4 companies to buy 1 million tonnes a year for 10 years, starting from 2023, and is looking for U.S. volumes as part of the requirement.

Delays in LNG export projects in Canada, in which PetroChina owns a stake, and Mozambique, where both PetroChina and CNOOC have invested, also made U.S. supplies attractive, sources added

North American LNG exporters have been adding to capacity because of demand in major Asian economies.

Cheniere, the largest exporter out of the United States, said in late September it expects to announce “a number of other transactions” that will support their going forward with the Corpus Stage 3 expansion next year.

Venture Global is building or developing over 50 million tonnes per annum (MTPA) of LNG production capacity in Louisiana, including the 10-MTPA Calcasieu, which is expected to cost around $4.5 billion and start producing LNG in test mode in late 2021.

However, some buyers remained cautious.

“There is a lot of hype in the market, and nobody knows for sure how long this supply crunch would last. For companies that do not have fresh demand in the next year or two, it’s better to wait,” said a separate Chinese importer.


Biggest US coal miner surges as global energy crisis boosts demand
Bloomberg News, October 18, 2021

The global energy crisis that’s fueling demand for coal boosted third-quarter results for Peabody Energy Corp., pushing up shares 17%. 

Sales exceeded $900 million, the highest in seven quarters, and adjusted earnings before interest, taxes, depreciation, and amortization of $280 million to $290 million will be triple the year-ago figure, according to preliminary earnings released Monday by the biggest U.S. coal miner.

Top of Form

Bottom of Form

The results bode well for U.S. miners, which are heading into earnings season buoyed by increasing consumption at domestic utilities, higher demand for international shipments and prices climbing around the world. The global economic recovery has increased electricity consumption, leading to a shortage of natural gas and strong demand for coal. While world leaders will converge in Glasgow in two weeks for a critical climate conference, the dirtiest fossil fuel will remain the world’s biggest source of power for years to come.

“We remain optimistic about the future, given strong coal pricing and global demand fundamentals,” Peabody Chief Executive Officer Jim Grech said in the statement.

Peabody surged as much as 17% in New York, the most intraday since July. The shares have surged more than sevenfold this year as demand for coal has climbed. The company will issue its full third-quarter results on Oct. 28.

Peabody is the first U.S. coal producer to provide results for the quarter. Rivals may also report solid gains as power producers around the world are calling for more coal to head off potential shortfalls. U.S. miners are shipping as much as they can dig up, though their ability to increase production is constrained by labor shortages and mining capacity that’s been in decline for years. 

Elliott Investment Management, the company’s top shareholder, reduced its stake after exercising short call options, according to a filing Monday.


One of Trump’s top targets has outraised the opponent he backs to oust her. She’s not the only one
Fredreka Schouten, CNN Politics, October 16, 2021

Four Republican lawmakers who voted to impeach or convict former President Donald Trump over his role in the January 6 attack on the US Capitol outraised the candidates he has endorsed to oust them, new campaign filings show.

Republican Reps. Liz Cheney of Wyoming, Jaime Herrera Beutler of Washington and Fred Upton of Michigan drew Trump’s condemnation for their impeachment votes in his January trial in the House. All three collected more money in the third fundraising quarter than their Trump-endorsed rivals, according to reports filed Friday with the Federal Election Commission.

And Alaska Sen. Lisa Murkowski, one of seven Senate Republicans who voted to convict Trump in February, raised nearly $1.1 million in the July-to-September quarter, more than twice the $465,945 collected by Kelly Tshibaka, who Trump endorsed earlier this year. Murkowski is the only one among the seven Republicans who voted to convict the former President who is up for reelection in 2022.

In addition, Murkowski ended September with more than $3.2 million in cash reserves — more than 10 times the amount Tshibaka had remaining in her campaign account.

Trump has loomed large over his party, even out of office. And some Republicans have worried that his aggressive role in nomination battles — along with his demands that GOP officeholders back up his false claims about the 2020 election — could muddle efforts to win control of Congress in next year’s midterm elections.

Republicans need to flip only one seat in the Senate and five in the House to seize the majority.

Top target, top fundraiser

In the House, Cheney, who serves as vice chairwoman of a committee investigating the January 6 riot, is among the top targets for Trump, who has called her a “warmonger” and “disloyal.” She was ousted from her position as House GOP conference chair earlier this year over her opposition to the former President.

Despite that, Cheney topped the fundraising among the 10 House Republicans who backed Trump’s impeachment, bringing in $1.7 million, new filings show. It marked the second-largest fundraising quarter of Cheney’s House career.

Her Trump-endorsed opponent, attorney Harriet Hageman, joined the race on September 9 and raised nearly $302,000 in the three weeks before the books closed on the quarter, or a pace of about $100,000 a week.

Hageman would need to increase that pace to match the fundraising strength of Cheney — who has consistently topped seven figures in quarterly fundraising this year. Cheney ended September with more than $3.6 million in the bank to Hageman’s $245,000.

The Cheney-Hageman race is shaping up as a key proxy fight between Trump and the traditional establishment Republican world from which Cheney hails and a high-profile test of Trump’s ability to purge his critics from power.

Former President George W. Bush is slated to attend a fundraiser Monday in Texas for Cheney, the daughter of his Vice President Dick Cheney. Utah Sen. Mitt Romney, a former Republican presidential nominee, and his wife Ann were among the donors to her fundraising committees in the third quarter.

Other contributors to Cheney’s political operation in the quarter included several prominent Democratic donors, such as Hollywood mogul Jeffrey Katzenberg, and a political action committee run by former Trump national security adviser John Bolton, who has become a vocal critic of the former President.

In announcing the third-quarter haul in the Casper Star-Tribune earlier this week, Cheney campaign adviser Amy Edmonds said the three-term congresswoman is receiving “historic levels of support because she is upholding her oath to the Constitution.”

Hageman’s contributors include Maggie Scarlett, who was a co-chair of Cheney’s 2014 Senate campaign; billionaire tech investor Peter Thiel, who was an early backer of Trump’s presidential ambitions; and Lynn Friess, the widow of Foster Friess, who was a major GOP contributor.

“We know that Liz Cheney will have more money than she can spend, raised by Washington, D.C. and Northern Virginia special interests, establishment politicians, and Democrats who find her to be a useful tool,” Hageman said in a statement.

House endorsements

In Washington, meanwhile, Herrera Buetler raised $523,591, surpassing the $452,132 collected by Joe Kent, a US Army veteran endorsed last month by Trump.

And in Michigan, Upton raised $292,943 in the third quarter, topping the $115,585 collected by Steve Carra, a Michigan state lawmaker also endorsed by Trump in September.

Upton is considering retirement after more than three decades in office. He has said he will decide his political future based on what his southwest Michigan seat looks like after redistricting, rather than Trump’s actions in the race.

“We’ll have the resources to win. I’m not worried,” Upton told CNN in September.

Carra told CNN earlier this week that he now anticipates raising more in the fourth quarter with Trump’s support than in the third.

“Fundraising certainly has picked up after his endorsement,” he said. “I will have raised about the same amount in Q3 as I did in Q2, but a large portion of that would be after his endorsement came.”

One House Republican who voted to impeach the former President, Ohio Rep. Anthony Gonzalez, announced last month that he would not seek reelection as he faced a tough primary challenge.

Max Miller, the Republican endorsed by Trump to take on Gonzalez, brought in more $695,000 during the third quarter, $500,000 of which came in the form a personal loan from Miller.

Trump has not yet endorsed challengers to six other House Republicans who voted for his impeachment.

Chris Mathys — a pro-Trump challenger to one of those lawmakers, California Rep. David Valadao — hopes that changes soon. He told CNN this week that he’s “actively pursuing” a meeting with Trump to secure his support.


From the Washington Examiner, Daily on Energy:

DEMOCRATS SCRAMBLE: Don’t say we didn’t warn you. Democrats are likely to cut their signature climate policy from their reconciliation package because of opposition from key centrist vote Sen. Joe Manchin of West Virginia.

That development from the New York Times late Friday came after Josh reported Democrats’ efforts to accommodate Manchin’s beef with the Clean Electricity Performance Program were insufficient.

“Sen. Manchin has clearly expressed his concerns about using taxpayer dollars to pay private companies to do things they’re already doing,” his office said in a statement this weekend.

So where does that leave Democrats? Likely depending on expanded and strengthened clean energy tax subsidies as the main vehicle for pursuing President Joe Biden’s emissions reduction goals.

That’s always been the most obvious component of Biden’s reconciliation package to survive, both politically and for procedural reasons. Even if they had the votes, Democrats would have to navigate the tricky budgetary rules of reconciliation to include the novel CEPP program, which was designed to pay utilities to generate more clean power and penalize those that fail to meet certain targets.

“One overall problem with reconciliation (said everyone) is that it makes policy design incredibly difficult,” Shane Skelton, a senior vice president of Boundary Stone Partners, told Josh. “As a result, taxes and tax credits become a far more user-friendly tool, and it looks like that is the direction we’re heading.”

Carbon pricing to the rescue? Speaking of taxes, proponents of carbon pricing are going to recommit to including the policy in reconciliation. Sen. Sheldon Whitehouse of Rhode Island recently told Josh a fee on carbon emissions is “highly likely” to be included. He and colleagues on the Finance Committee have pitched it as complementary to CEPP and a potential backup to it, given its neater fit for reconciliation budget rules.

Whitehouse and other proponents aim to exempt gasoline from the tax to protect consumers already reeling from high prices.

But sources following the negotiations say carbon pricing faces massive political headwinds of its own that are exacerbated by the current energy crunch.

“Right now, I find the politics hard to fathom. It might be a little tone deaf to push hard for a carbon tax at the very time when energy prices are so high,” Scott Segal, a utility industry lobbyist at Bracewell, told Josh.

Manchin has been outspoken about his opposition to carbon taxes and cap-and-trade programs. House Democrats, meanwhile, did not include carbon pricing in their version of the reconciliation package, as the idea has fallen out of favor with progressives.

“I don’t think you can have any carbon pricing bill that you could introduce to the House today that you would get the majority of Democrats,” Rep. Sean Casten, an Illinois Democrat, told Josh and co-host Neil Chatterjee for a new episode of the “Plugged In” podcast dropping tomorrow.