Daily on Energy: US-China rare earth truce extended

WHAT’S HAPPENING TODAY: Good afternoon and happy Friday, readers! We may not have made it to Thanksgiving yet, but holiday markets are already popping up around D.C. The Downtown D.C. Holiday Market officially opened today in Chinatown, which has more than 120 local vendors and will remain open through Dec. 23. 🎁⛄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.House minority leader Hakeem Jefferies of New York confirmed today that he is committed to getting permitting reform across the finish line, as some members of his party are pushing to punt the bill to the next Congress. “It’s working its way through the Senate. It’ll come over to the House. There’s still some issues that need to be addressed,” he said. “We’re going to have a conversation as a House Democratic Caucus when it comes over to the House, but we are committed to getting this done as part of our effort to build upon the need to decisively address the affordability crisis.”ONE YEAR AFTER US-CHINA RARE EARTH TRUCE, THE STALEMATE REMAINS It’s been one year since President Donald Trump and Chinese President Xi Jinping struck an agreement to ease the dispute between the two countries on rare earths materials.Last October, China and the United States reached a truce over Beijing’s most recent export restrictions on an additional five rare earths. China agreed to suspend the restrictions for one year in exchange for U.S. tariff reductions.The waiver on export controls were set to end at the beginning of the month. However, China announced earlier this week that it would extend the export control waivers by two months, through Jan. 10.Trump is set to travel next week to Shenzhen, China for the Asia-Pacific Economic Cooperation summit, where he is expected to meet with Xi. The two leaders are also expected to meet one more time in December.Zoe Oysul, a policy manager at the Center for Critical Mineral Strategy for SAFE, a nonprofit group, told Maydeen that the extension was expected, adding that continuing the waivers in the medium term was welcome.“Again, we want to ensure that these continued lukewarm relationships are not diluting the interest for the downstream to really diversify. We hope they see that these restrictions can come into play anytime in the future and extensions are not a long term solution,” she said.The agreement last October, however, did not address restrictions imposed by China in April 2025, when it suspended exports of seven types of rare-earth metals and magnets, requiring companies to obtain a ministry-issued license for any exports.Impacts on exports: Despite pauses in the implementation of certain export controls, supply chains in industries such as aerospace, defense, and automotive remain tight.Before the restrictions took effect in April 2025, the U.S. imported a monthly average of 76.8 metric tons of rare earth compounds and metals from China between June 2024 to March 2025, according to the Center for Strategic and International Studies.In the 11 months after the U.S. and China reached a truce last October, monthly imports averaged just 19.3 metric tons, representing a nearly 75% decline compared with the earlier period, CSIS added.The International Energy Agency found that China’s full implementation of restrictions on rare earths could put nearly $6.5 trillion in annual downstream production outside of China at risk.More upcoming restrictions? Export restrictions on Chinese critical minerals such as gallium, germanium, and antimony to the U.S. have remained paused until Nov. 27. These metals are essential for military applications and semiconductors.China dominates the global supply chains for rare earth and critical minerals, using its leverage against the U.S. The Trump administration has sought to expand the domestic supply chain and reduce reliance on China, but experts warn it may take years to become self-sufficient.Chris Berry, a minerals and industry analyst and consultant, told Maydeen, “It’s not that we had these supply chains up and running 10, 15, 20 years ago, and we just shut them down and we can sort of do a brownfield revamp. We’re sort of starting from scratch.”“The short answer to all of this is: the United States is not ready to meet any of these deadlines, not Nov. 10, not Jan. 10, not Nov. 27,” Berry said. All the rest: AN OIL MARKET RECOVERY: The global oil market is set to return to a surplus for the first time since the war in Iran began, the International Energy Agency has said.In its monthly oil report released today, the Paris-based agency said the markets were showing “tentative signs of rebalancing,” with oil supplies surpassing demand for the first time in months.The IEA said global crude supply increased by 2.3 million barrels a day in October, hitting around 105.4 million barrels per day. Markets are expected to remain in a surplus in the final quarter of this year and throughout 2027.Inventories for crude also rose last month, increasing by an average of 1.7 million barrels per day. This was the first increase since June, the IEA said.While the news will instill more confidence in the markets, the IEA warned that it does not mean consumers will not continue to be affected by disrupted supply or lower inventories overall.“For now, the severe tightness in product supply, especially for diesel, remains the overriding concern of the broader market and consumers,” the IEA said. “Persistent attacks on Russian energy infrastructure continue to choke off the country’s diesel supplies to international markets, adding to losses from the Middle East.”A BIPARTISAN BILL TO STRENGTHEN NATIONAL WILDLIFE REFUGE MANAGEMENT: A pair of bipartisan Senators introduced legislation today that aims to bolster habitat management efforts across the National Wildlife Refuge System.The bill, introduced by Republican Sen. John Boozman of Arkansas and Democratic Sen. Alex Padilla of California, would specifically give the U.S. Fish and Wildlife Service the authority to partner with state, tribal, and non-governmental organizations for habitat management.Essentially, it would allow FWS to enter into contracts with nonfederal partners who could then provide the regular, active management that the National Wildlife Refuge System needs to maintain healthy conditions. Similar authorities have already been granted to the U.S. Forest Service, National Park Service, and the Bureau of Land Management.The legislation, called the National Wildlife Refuge Habitat Partnership Act, has the backing of groups such as Ducks Unlimited, the Congressional Sportsmen’s Foundation, and Delta Waterfowl.STATUS OF ‘DRILL, BABY, DRILL’: The number of oil and gas rigs active in the U.S. decreased by three today, bringing the total number down to 601, Baker Hughes reported this afternoon. This week’s total is still up by 52 for the year.A bump in Alaska: This week the Department of Energy’s Energy Information Administration forecast that crude oil production in Alaska will grow by 17% next year. The EIA said it is expecting Alaskan oil production will increase by 23,000 barrels per day in 2026, followed by a 60,000 barrels per day jump in 2027.If accurate, this would be the largest production seen in Alaska since 2014. The annual production increase would also be the largest since the 1980s, the EIA said.The growth is primarily attributed to two projects located in the North Slope: ConocoPhilip’s Nuna project, and Santos and Repsol’s Pikka Phase 1.CONGRESSIONAL FUNDING BILLS ARE OUT: The Senate Committee on Appropriation yesterday released FY 2027 funding bills for the Environmental Protection Agency and Departments of the Interior and Energy.EPA: The agency was appropriated $8.56 billion for grants and program funding, including $4.4 billion for State and Tribal Assistance Grants.DOI: The committee appropriated $15.3 billion for National Parks, refuges, public lands, conservation and energy development on public lands and waters; and tribal trust responsibilities. The funding includes tribal contract support costs and lease payments, as well as $1.5 billion to support the U.S. Wildland Fire Service. The DOI was also appropriated $2.0 billion to help manage water resources in the west.DOE: The department, along with the Defense Department, was appropriated $38.4 billion to strengthen the U.S. nuclear deterrence, continue stockpile modernization, prepare for nuclear threats, Naval reactors, and cleanup efforts at legacy Cold War nuclear security sites.The department was also granted $16 billion to expand baseload power capacity and progress on advanced reactors and fuel technology. It will also go towards supporting research and development of hydrocarbons and geothermal energy, developing a critical mineral supply chain, and supporting the national laboratories.LATEST AT COP31: United Nations Secretary-General Antonio Guterres today called for an “immediate and drastic reduction” in greenhouse gas emissions at the UN’s annual climate summit.“The central question is in the hands of member states, particularly the big emitters. They must recognise the ​need for an immediate and drastic reduction in emissions to keep the 1.5 goal still possible by the end of the century,” he said.His comments come as the UN reported last month that the world is on track to exceed 1.5 degrees Celsius, making it the second warmest year on record.Meanwhile, development finance institutions for Britain, Norway, and Canada launched a joint initiative at COP31 to channel $10 billion into climate projects in emerging markets by 20230.RUNDOWN NPR Why even a fraction of a degree can escalate climate change impactsHigh Country News Salton Sea communities push back on bill to fast-track developmentGrist The affordability election delivered billions for public transit