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Presidential advisor Amos Hochstein: 'We're not against' oil majors making profit

ABU DHABI, United Arab Emirates — President Joe Biden is making no secret of his frustration with high gas prices and the oil companies making record profits as a result. With the support of Democratic allies in Congress, he is threatening to levy windfall taxes on energy firms, a prospect that’s prompted backlash from the industry.

The president on Monday tweeted: “The oil industry has a choice. Either invest in America by lowering prices for consumers at the pump and increasing production and refining capacity. Or pay a higher tax on your excessive profits and face other restrictions.”

The language sets up what looks like a standoff between the U.S. oil industry and the Biden administration at a time of high energy prices, soaring inflation and worries of a global crude supply shortage after years of under-investment in the industry and several months of sanctions on Russian commodities for its war in Ukraine.

But reports of animosity between the White House and America’s energy giants are overhyped, says Amos Hochstein, Biden’s special presidential coordinator, who liaises closely with energy industry leaders domestically and around the world.

The Biden administration is not anti-profit or anti-free market, he stressed; rather, it wants to see oil companies reinvest their profits in improving crude production and the country’s energy security.

“I talk to the CEOs, other senior members of the administration talk to the CEOs on a regular basis,” Hochstein told CNBC’s Hadley Gamble Monday, when asked about the administration’s relationship with industry executives.

“People know that. I don’t think that’s the issue. The issue is this: we want them to increase their capex, increase investment,” he said. “The price environment for the last year, over a year now, lends itself to investment. So take those profits that you’re making. We’re not against profits. What we do want, and the president said this last week — take those profits and invest them.”

Watch CNBC's full interview with U.S. Presidential Coordinator Amos Hochstein

Congressional Democrats argue that oil executives are prioritizing shareholder returns over reinvesting profits toward boosting production that could lower consumer prices. Hochstein held the position that shareholder returns are not an issue in themselves, but that increasing America’s energy supplies should be the priority.

“You want to pay some back to shareholders? Some is fine,” he continued. “But not excessively. You want to take these profits, that’s fine too. But not excessively. We’re in a war and you can do more to increase production.”

Record-breaking oil company profits

Several major oil companies have raked in record profits this year as consumers grappled with soaring gas and energy bills. ExxonMobil reported a record $19.7 billion net profit for the third quarter, and Biden this week accused the Texas-based company of using that to reward shareholders and buy back its own stock rather than investing in production improvements that could ease prices at the pump.

California-based Chevron made $11.23 billion in profits in the third quarter, just shy of the record it hit in the previous quarter. In the last two quarters, Chevron, ExxonMobil, ConocoPhillips and Britain’s BP, Shell and France’s TotalEnergies reportedly made over $100 billion in profits — more than they earned in the entirety of 2021.

Exxon Mobil CEO Darren Woods, speaking to CNBC last week, said his company was committed to addressing both shareholder returns and improving production, regardless of who was in the White House.

“We don’t really look to satisfy one administration or the other. We look to make sure we’re doing the best we can using our shareholders’ money appropriately, finding advantaged projects that allow us to grow production and grow value. We’re also looking at reducing our emissions,” he told CNBC’s “Squawk Box.”

Exxon Mobil CEO Darren Woods: OPEC is leveraging its pricing power

But Hochstein says he doesn’t see sufficient investment on a broad scale.

“All I see is record profits that are not translating to sufficiently increased investment and where investments are not keeping up with average ratios of investment-to-price increase,” he said.

Many in the oil industry argue that a windfall tax is counterproductive and would harm production and investment. Still, the threat of such taxes from the Democratic leadership is likely more of a pressure tactic than a plausible policy proposal in the near-term since Congress is not in session. And it could even become impossible to carry out if Republicans, who largely oppose such a move, win one or both houses in the November midterm elections.

A changing White House tone on fossil fuels

Biden came into office campaigning hard for an end to fossil fuel use and a transition to renewables as part of his climate-focused agenda, laying out a bevy of regulations on oil and gas exploration and production. Supporters of Biden’s green energy goals say this aggressive push was needed to reverse what they describe as damage done by former President Donald Trump, who rolled back years of work on environmental protections and pulled the U.S. out of the Paris Climate Accords.

But it was that policy push, those in the fossil fuel industry argue, that helped throttle investment in oil and gas production and subsequently led to the energy supply shortages and higher prices we see today. Now, faced with a tightening global oil and gas market, climbing demand, and a war in Europe, the administration is taking a different tone.

“Look, it’s no secret that the Biden administration and oil industry do not see eye-to-eye on the long term role that oil will play in the economy,” Hochstein said. “However, we have to do two things. We need more investment in oil production and refining, now.”

Energy security is not a 'short-term thing,' IEF secretary general says

The longtime energy policy veteran pointed out that much of the initial regulations and restrictions have eased — and noted that under this administration, the U.S. is approaching pre-pandemic highs in oil production levels, even despite what he says is insufficient activity from oil companies.

Figures released by the U.S. Energy Information Administration on Monday revealed domestic crude oil production hitting 11.98 barrels per day in August, the highest since March 2020 and nearing the U.S.’s all-time record of 12.3 million barrels set in 2019.

Occidental Petroleum CEO Vicki Hollub contradicted the narrative that the Biden administration was ignoring oil companies. Speaking to CNBC in Abu Dhabi, she said she indeed communicates with U.S. Energy Secretary Jennifer Granholm, a vocal climate policy advocate.

“I do hear from Secretary Granholm — she is focused on tech, she’s enthusiastic about the climate transition, she listens, she [communicates with] the National Petroleum Council and has sent us requests for studies to be conducted to help her in making her decisions” concerning clean energy investments, Hollub said.

Whatever the disagreements on the longer-term role of the fossil fuel industry in the U.S., oil executives and White House officials appear to agree on one thing — they will need to communicate properly to ensure future energy security for the country at a time of severe economic and geopolitical risk.

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E-quipment highlight: Haulotte E MAX rough terrain electric scissor lifts [video]

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E-quipment highlight: Haulotte E MAX rough terrain electric scissor lifts [video]

The new HS18 E MAX (called “HS5390” E MAX in the US, because we don’t know what meters are) rough terrain electric scissor lift from Haulotte can drive around your job site at full height, and with a full load.

Last week, Haulotte added the new HS5390 E MAX to its line of electric rough-terrain scissor lifts, completing the company’s existing HSE (HS electric) range of scissor lifts. The HS18, though, is unique – and not just because of its 18 meter fully extended height. The HS18 E MAX can be driven both fully extended, and fully loaded.

Two configurations of its material handling racks are available for the HSE scissors. The racks are built to suit the materials being transported, generally expected to be “panels” (think drywall, windows, etc.) or pipes.

Haulotte material handling rack

With a load capacity of 400 kg (over 880 lbs.), Haulotte says its new HS5390 E MAX is ideal for jobs that require the transport of heavy loads across unfinished surfaces, using a series of optional attachments to offer a productive and safe solution to keeps materials organized and off the ground, minimizes the risk of trip and fall accidents.

Haulotte says its PULSEO-powered scissor lifts (“PULSEO” is Haulotte’s electric drive brand name) revolutionize the aerial industry by offering the performance of an internal combustion diesel machine in a more environmentally friendly package that can be used across the job site and in indoor or urban settings where loud, polluting diesels aren’t an option.

Electrek’s Take

HS5390 E PRO; via Haulotte.

This is a great example of a second-generation product doubling down on electrification and delivering significant improvements on its products without focusing on things like increased runtime (that’s the equivalent of “range anxiety” in the automotive world).

By stepping back and saying, “these things are already getting the job done time-wise, how can we make them do more in the time they already have?” Companies like Haulotte and JCB have made it infinitely easier for construction crews to put the HSE scissor lifts to work.

SOURCE | IMAGES: Haulotte, via Heavy Equipment Guide.

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Mazda EZ-6 EV goes on sale with a starting price under $25,000

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Mazda EZ-6 EV goes on sale with a starting price under ,000

Mazda officially opened the order books on its new Mazda EZ-6 EV and EREV versions of the car in China yesterday. And the starting price? It’s under $25,000.

Co-developed by Mazda and Chinese state-owned Changan Auto, the EZ-6 was one of two new electric offerings that debuted back in April. The other was a CX-5/0-sized crossover called the Arata, but the EZ-6 seemed closer to production, with a promised on-sale date later this year.

Well, Mazda lived up to its promise. The all-new Mazda EZ-6 is officially available for pre-order in China. And, while our sources (Chinese car blogs Autohome and CarNewsChina) are a bit fuzzy on the actual price, the translation seems to indicate a starting price of just 160,000 yuan (a tick over $22,800, as I type this).

One thing that’s less fuzzy, however, is that there are four extended range EV, or “EREV” versions of the car (read: hybrid) along with three fully electric BEV versions available for order at the pre-sales launch.

Value for money

Despite the low price, the base version of the newest Mazda get leather seating surfaces, and higher trim versions splice leather and suede (Alcantara?) together. There’s a 14-speaker Sony audio system available, too, along with 64-color ambient lighting, “zero-gravity” front seats, which means that the seats can recline to a near-flat position, and a panoramic glass roof.

The BEV model is reported to be equipped with a single electric drive motor putting out 190 kW of power (approx. 254 hp), and can be had with either a 56.1 or 68.8 kWh battery pack, good for a CLTC range of 480 km or 600 km (about 370 miles), respectively. Top speed of either model is an electronically-limited 170 km/h (105 mph).

The “EREV” model (man, do I hate that acronym) is equipped with a 93 hp 1.5L range extending ICE generator paired to a 160 kW (215 hp) electric motor and feeding electrons to a lithium iron phosphate battery. Battery range is about 80 miles, with a “maximum comprehensive range” quoted as 1301 km (approx. 808 miles).

Electrek’s Take

Mazda-first-EV-sedan
Mazda EZ-6 electric sedan; via Mazda.

Mazda’s CEO, Masahiro Moro is working with Changan to, “turn Mazda’s China business around.” The EZ-6 is part of that plan, and is being called Mazda’s first “global” sedan. Despite that, it seems unlikely that the EZ-6 will ever make it to the US.

And that’s too bad. Our roads could use a little electrified Zoom-zoom.

SOURCES | IMAGES: Mazda, via Autohome and CarNewsChina.

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Bidirectional charging may be required on EVs soon due to new CA law

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Bidirectional charging may be required on EVs soon due to new CA law

It’s an exciting week for grid resiliency-lovers in California, as Governor Gavin Newsom followed up his earlier smart grid law and signed another law this week which may require bidirectional charging on EVs in the future – though the law has no hard timeline attached, so it may be a while before we see this happen.

Bidirectional charging refers to the capability of electric vehicles to not just take electricity from the grid to charge, but to output electricity in various forms, whether this be vehicle-to-load (plugging in devices, like the 1.8kW capability on the Kia Niro EV), vehicle-to-home (like Ford’s “Intelligent Backup Power” system), or vehicle-to-grid (like the Nissan Leaf is capable of).

While these applications may seem like a party trick, widespread use of bidirectional charging could lead to huge benefits for efficiency, grid resiliency, and enable much greater penetration of renewable electricity generation.

Most electric grids don’t really have trouble meeting the regular everyday needs of electricity consumers, it’s when big spikes happen that things get difficult. Either on a hot day when everyone is using air conditioning, or a day when electricity generation is curtailed for some reason or another, that’s when things get difficult.

And as climate change makes temperatures hotter, California’s grid is often overtaxed on the hottest summer days, which are becoming more numerous. Even worse, methane-burning fossil gas peaker plants are the highest-polluting form of electricity California consumes, and these are currently used at peak times in order to deal with high demand.

One solution to this problem is adding energy storage to the grid which can be dispatched when needed, and which can fill up when the grid is oversupplying electricity. This helps to balance out supply and demand of electricity and make everything a little more predictable.

This is why there has been a push for grid-based storage like Tesla megapacks, which represent a large source of rapidly-dispatchable energy storage.

But there’s another source of grid-connected batteries out there which was right under our nose the whole time: electric cars.

EVs, which are mostly connected to the internet anyway, could be used as a distributed energy storage device, and even called upon to help provide electricity when the grid needs it. We already see this happening with Virtual Power Plants based on stationary storage, but if cars had V2G, theoretically cars could contribute in a similar way – both saving the grid, and perhaps making their owners some money along the way via arbitrage (buying electricity when its cheap and selling it when its expensive).

The problem is, not many automakers have included V2G capabilities in their cars, and in the cars that do have it, not many manufacturers have made V2G-capable equipment, and the ones who have built it haven’t seen that many customers who are interested in spending the extra money to upgrade their electrical systems with V2G-capable equipment.

So there needs to be something to jumpstart all of that, and California thinks it might just have the thing.

New CA law might require bidirectional charging… eventually.

The idea started in 2023 when state Senator Nancy Skinner introduced a bill which would require EVs to have bidirectional charging by 2027.

As this bill made its way through the legislative process, it got watered down from that ambitious timeline. So the current form of the bill, which is now called SB 59, took away that timeline and instead gave the California Energy Commission (CEC) the go-ahead to issue a requirement whenever they see it fit.

The bill directs the CEC, the California Air Resources Board, and the California Public Utilities Commission to examine the use cases of bidirectional charging and give them the power to require specific weight classes of EVs to be bidirectional-capable if a compelling use case exists.

The state already estimates that integrating EVs into the grid could save $1 billion in costs annually, so there’s definitely a use case there, but the question is the cost and immediacy of building those vehicles into the grid.

The reason this can’t be done immediately is that cars take time to design, and while adding bidirectional charging to an EV isn’t the most difficult process, it also only really becomes useful with a whole ecosystem of services around the vehicle.

A recent chat Electrek had with DCBEL, making bidirectional chargers simpler for consumers

Even Tesla, which for years has touted itself a tech/energy company and sold powerwalls, inverters, solar panels and so on, is still only gradually trickling its bidirectional Powershare feature out onto its vehicles.

And that ecosystem has been a bit of a hard sell so far. It’s all well and good to tell someone they can make $500/year by selling energy to the grid, but then you have to convince them to buy a more expensive charging unit and keep their car plugged in all the time, with someone else managing its energy storage. Some consumers might push back against that, so part of CEC’s job is to wait to pull the trigger until it becomes apparent that people are actually interested in the end-user use case for V2G – otherwise, no sense in requiring a feature that nobody is going to use.

Electrek’s Take

Given all of these influences, we wouldn’t expect CA to require bidirectional charging any time soon. But it still gives the state a powerful trigger to pull if other efforts, like the recently-signed smart grid law, turn out not to be enough as California works to, grow, clean up, and make its grid more affordable all at the same time.

But having the force of law behind it could turn V2G into less of a parlor trick and more into something that actually makes a difference the way us EV nerds have been dreaming of for decades now (true story: Electrek once turned down Margot Robbie for an interview and instead talked to some engineers about V2G for an hour).

So, telling manufacturers that California may start mandating bidirectional charging soon means that those manufacturers will perhaps start taking V2G more seriously, particularly given the size and influence of CA’s car market. Even if the CEC doesn’t make it a requirement, the threat of it eventually becoming one means that EV-makers will probably start getting ready for it regardless.

There’s no real point to a single person discharging their car into the grid, but when millions of cars are involved, you could work to flatten out the famous “duck curve,” which describes the imbalance between electricity supply and demand. We hear a lot about “intermittency” as the problem with wind and solar, and grid storage as the solution to that, so being able to immediately switch on gigawatt-hours worth of installed storage capacity would certainly help to solve that problem. And we hope this law helps us get just a little closer to that potential future.


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