Daily on Energy: Pushback against the movement to ban diesel exports

WHAT’S HAPPENING TODAY: Good afternoon and happy Monday, Daily on Energy readers! While Callie and Maydeen won’t be in New York for this year’s Climate Week, please don’t hesitate to shoot us a note if you’d like to connect over the phone or share any tips. 📝🌱Welcome to Daily on Energy, written by Washington Examiner energy and environment writers Callie Patteson (@CalliePatteson) and Maydeen Merino (@MaydeenMerino). Email cpatteson@washingtonexaminer dot com or mmerino@washingtonexaminer dot com 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. The effort to impose a ban on diesel exports is gaining momentum as prices reach record highs but some analysts caution that a ban would only offer a short-term solution. Garret Golding, assistant vice president for energy programs at the Federal Reserve Bank of Dallas, wrote on X that a diesel ban could place a downward pressure on wholesale prices in the U.S., especially in the Gulf Coast. But he noted that removing U.S. diesel exports would reduce global supply, pushing diesel and distillate prices higher. Those prices would also backfire on portions of the U.S. that rely on imports, such as the East Coast.Golding noted that refineries that could no longer export diesel would quickly run out of storage space and be forced to reduce their run rates. “[W]hen you reduce run rates because you can’t export distillate/diesel, you end up reducing how much gasoline, jet fuel and other refined products you’re producing – which means higher prices,” Golding wrote. Bob McNally, founder and president at Rapidan Energy Group, also said on Bloomberg TV today that a ban would cause prices abroad to “skyrocket.” Similar to Golding, he noted that prices in coastal areas like the Northeast could go higher. “You would get a short-term abrupt collapse in pump prices for diesel in Texas, Louisiana, sort of the midcontinent area on the coasts. I don’t think they fall much; they probably go higher,” he said. “And the U.S. would shatter its reputation as a safe place to invest for a generation.” Where do prices stand now? As of this afternoon, the national average price for diesel is at $6.51 per gallon. The states with the highest diesel prices include California at $8.42, Washington at $7.44, and Hawaii at $7.18 per gallon. Republican Sen. Chuck Grassley of Iowa has called on President Donald Trump to place an embargo on diesel exports to help lower prices. Grassley noted that farmers and the agricultural sector would soon see prices soar because of the high cost of fuel. Senate Majority Leader John Thune last week told reporters he would be willing to consider a ban. Louisiana Gov. Jeff Landry has also asked the administration to impose a 90-day ban on U.S. diesel exports. The Louisiana Mid-Continent Oil and Gas Association today put out a statement responding to the governor’s request, arguing that halting exports would force refineries to reduce production both on diesel and gasoline. “This is a misguided proposal that would cause more harm and increase, not decrease, costs for American families and businesses,” LMOGA president Tommy Faucheux said. What’s happening abroad? The conflicts in the Middle East and Ukraine have crimped the global fuel supply chain and sent prices soaring. Russia’s current export ban on diesel is expected to be extended beyond the end of the month, Bloomberg reports. Before the ban, Russia accounted for nearly 10% of global seaborne diesel supplies. A WIN AGAINST A CONTROVERSIAL ‘RAIN TAX’: Some residents in northeastern Pennsylvania could see a controversial “rain tax” go down the drain, thanks to an executive order pushed by freshman Rep. Rob Bresnahan. Bresnahan spoke with Callie and the Examiner’s Zach Halaschak on Friday, saying that the order signed by Trump last week will provide tax relief in his district – specifically relief related to a levy on how much it rains. This tax stems from an Obama executive order in 2009 that pressured states and local governments within the Chesapeake Bay Watershed to fund restoration and protection projects. The bill for these projects trickled down to homeowners. Since 2019, residents in Luzerne and Lackawanna counties have been paying an additional tax each quarter on rainwater that collects on their sidewalks, driveways, rooftops, stone pathways, and other surfaces on their property deemed impervious. The larger those surfaces are, the higher that quarterly fee floats for each taxpayer.“Instead of those dollars going to fix our roads or support local police or fire departments, all that money goes to meet pollution requirements aimed at cleaning up the Chesapeake Bay, which is more than 200 miles away from Pennsylvania’s Eighth Congressional District,” Bresnahan said.The Republican said that one local official he spoke with said that the fines for noncompliance would have been as high as $10,000 per day. And property owners in his district have been facing a rain tax bill ranging from $65 to $2,000 per year. Last week’s order: Last Wednesday, Trump rescinded the Obama order, paving the way for such “rain taxes” to be lifted.Bresnahan told the Examiner that reversing the 2009 regulations has been a priority his entire first term in Congress, and that he began working with the Office of Legislative Affairs on “day one.” With Trump’s order, Bresnahan claimed, control has been given back to the commonwealth and localities. It does not eliminate states’ and localities’ abilities to impose similar fees in their regions. It also does not immediately end the “rain tax” in Northeastern Pennsylvania. Instead, Trump’s new order removes the federal pressure on his constituents who live so far upstream from the Chesapeake Bay.“This is about our communities that are hundreds of miles away from this exact cleanup effort, and where these dollars are going for something hundreds of miles away,” he said.Trump’s order has been criticized by lawmakers in Virginia and Maryland, which immediately border the Chesapeake Bay. Several members, including conservative House Freedom Caucus Chairman Andy Harris, have said that the 2009 executive order provided “vital federal resources” to support the bay. You can keep reading about what else the critics have to say and more from Callie and Zach’s interview with Bresnahan here. All the rest:WHAT’S GOING ON WITH OIL: International benchmark Brent crude briefly dipped back below $100 for the first time in several weeks, as traders appear more optimistic about the U.S.’s ability to escort oil out of the Strait of Hormuz. Over the weekend, U.S. Central Command’s Adm. Brad Cooper said the military had successfully facilitated the transit of 1 billion barrels of crude oil out of the waterway over the last two months. Cooper added that the U.S. has provided protection for more than 2,000 commercial ship transits through the strait, adding that “momentum is building”. Saudi Arabia’s East-West Pipeline remains damaged due to drone strikes earlier this month. The closure of the pipeline, which could carry up to 7 million barrels per day, has led to Saudi Arabia increasing its exports through the Strait of Hormuz. Data reviewed by Reuters shows that Saudi Aramco loaded roughly 14 million barrels of crude on seven supertankers inside the gulf on Sunday. Confidence in shipping through the strait appeared to be the main driver of the downward pressure on prices today, with international and domestic benchmarks falling by nearly 4%. Just before 3 p.m. EDT, Brent dropped 3.34% and was priced at $100.42 a barrel. West Texas Intermediate had also fallen by 3.81%, selling at $92.42 a barrel. CASH FOR GEOTHERMAL: Geothermal energy is getting a funding boost from Trump. The Department of Energy announced today that it has allocated more than $99 million for 21 projects aimed at advancing geothermal energy development across the U.S. These projects will involve conducting field-scale tests and exploration drilling to identify and confirm the most promising geothermal resources in the country. While many are in Texas and Utah, the projects are located as far east as Gloucester, Massachusetts, where LiPower Geothermal will be constructing a production well and reinjection well. Other exploration projects are located in Virginia, Alaska, Illinois, and Colorado. Some of the awardees include Fervo Energy Company, the University of Utah, Quaise Energy, and Invenergy Geothermal Development. A quick reminder: Geothermal energy can provide electricity, heating, and cooling, as well as store excess energy under the surface, just from extracting heat from underground reservoirs of hot, typically porous, rocks saturated with water. To generate energy, the heat is used to produce steam, which travels through piping and turbines to create electricity. Figuring out how to tap geothermal energy has long been restricted to areas with higher tectonic activity, as the movement of tectonic plates more easily brings the Earth’s internal heat closer to the surface. However, advancements in drilling made by the oil and gas industry have made geothermal power viable in many more locations. Click here to read more from Callie about how fracking has helped the development of geothermal.NEWSOM SIGNS SEVEN BILLS TO REGULATE DATA CENTERS: Democratic California Gov. Gavin Newsom signed seven bills to place regulations on data centers electricity, water, and land use. In a press release, the governor’s office said the regulations would require data centers to pay for their grid updates and comply with state energy procurement requirements. They would also mandate proposed AI facilities to provide information on water usage and drought planning. Any upgrade to the water system would also need to be paid for by the data center. The facilities would also need to meet state environmental standards before any judicial streamlining could be approved. In other California news: Newsom over the weekend signed legislation that would remove regulatory restrictions on the sale of E15 to help ease rising fuel prices. California has long banned the sale of the higher ethanol blend. The bill was passed by the state lawmakers over a year ago. “This common-sense bill cuts unnecessary red tape while maintaining our environmental and safety standards. We’re helping make E15 a real option for California drivers,” Newsom in a press release. NEW RULES FOR DATA CENTERS IN THE E.U.: The European Commission has proposed new rules for data center developers looking to build in the European Union, requiring the companies to disclose how efficiently they use energy and water resources. The details: The commission specifically has proposed a rating scheme for data centers, in order to incentivize developers to adopt more energy- and water-efficient practices. The rules will not impose strict limits on energy and water use, or require developers to reveal the total amount of energy used for their operations. They will, however, require data centers with a capacity of 500 kW or more to disclose energy and water efficiency information. Why this matters: The EU aims to triple its data center capacity over the next five to seven years. While this is expected to strengthen the bloc’s technological sovereignty, it will also strain nations’ electricity grids and water resources. The EU is hoping that through the rating systems, data centers will be more incentivized to use efficient practices. This could also be the first step toward mandatory standards or reporting within the bloc. ICYMI – JUDGE RULES IN FAVOR OF SOLAR FOR ALL GRANTEES: A federal judge ruled Friday that the Environmental Protection Agency illegally terminated the Biden administration’s Solar for All program. As a reminder: The EPA sought to terminate the program following the passage of the One Big Beautiful Bill Act. The $7 billion program was meant to help lower-income communities install solar panels. The program is part of the Greenhouse Gas Reduction Fund, which was established as part of the Inflation Reduction Act. Rhode Island District Court Judge Mary McElroy vacated the EPA’s move, stating that “while grant funding from the Greenhouse Gas Reduction Fund was to no longer be available following the OBBBA, already existing grant awards were to remain in place, subject to the residual statutory authority under which they were originally obligated.” The EPA said it is reviewing the decision and considering options for appeal. Read more by Maydeen here. A LOOK AHEAD: Sept. 20 – 27 is New York City Climate Week. Sept. 21 – 22 The Agricultural Business Council of Kansas City’s Ag Outlook Forum is taking place in Kansas City, Missouri. Sept. 22 – 24 the Shale Insight 2026 Conference is being held in Erie, Pennsylvania. Sept. 22 – 24 American Clean Power’s Energy Storage Conference RECHARGE is taking place in Aurora, Colorado. Sept. 22 The Atlantic Council is holding a webinar featuring remarks from Exelon CEO Calvin Butler on artificial intelligence. Sept. 23 – 24 The Nuclear Symposium is taking place in New York City. Sept. 23 the Senate Committee on Environment and Public Works is holding a hearing to examine updating America’s nuclear waste management policy. Sept. 23 Advanced Energy United is holding a webinar analysing Illinois’ grid modernization and affordability policy Sept. 24 Advanced Energy United is hosting an event in Warwick, Rhode Island to celebrate the launch of the Ocean State Climate Alliance. RUNDOWN Bloomberg Trump’s Venezuela Oil Deal Hinges on Decrepit and Distant FieldsPolitico Voters are waking up on AI safety. So are these Senate Republicans.Axios A “really big proof point” for carbon removalWashington Post I’m Nebraska’s attorney general. No state can dictate the law for America.