Daily on Energy: What we know so far about the Venezuela deal

WHAT’S HAPPENING TODAY: Good afternoon and happy September, readers! Despite it being September, we are still experiencing some seriously high temperatures here in D.C. Starting today through Thursday, we’re expecting three straight days of 90-degree weather. Be sure to stay cool and hydrated out there! 🫠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. What we know so far about the Trump administration’s deal in Venezuela: The Pentagon’s Office of Strategic Capital is taking a 35% equity stake in a new oil company that will drill across more than a dozen oil fields in Venezuela. The White House said that “Venezuelan interim authorities” granted North American Blue Energy Partners, a private oil and gas exploration and production company, 100-year concessions for 17 oil fields that have proven reserves of roughly 65 billion barrels of crude. The Department of State has also been granted the right to purchase oil produced at production cost, with a guaranteed 20% of the offtake from all current and future fields that NABEP will operate. The agency has also been granted the right of first refusal to purchase the remaining 80% of NABEP’s production. The U.S. government will also have significant control over the makeup of the Venezuelan oil company, holding veto power over the appointment of any member of the board of directors. The majority of the company’s board must also be U.S. citizens.What we still don’t know: The release put out yesterday did not offer any details as to what the legal framework will be to keep the deal in place as administrations in the U.S. and Venezuela change over time. U.S. officials said in a call today that the deal will not impede any democratic transition and instead will lay the groundwork for the next government of Venezuela to be a “successful republic in the long term.” There also appears to be a discrepancy between statements from the U.S. and Venezuelan governments regarding how long the new oil company will be able to produce in the 17 oil fields. While the administration has said it is a 100-year concession agreement, interim President Delcy Rodriguez said over the weekend that the agreement will last 25 years. The release from the administration also reiterates the idea that the deal will help the administration refill the Strategic Petroleum Reserve, but does not explain how it will utilize the heavy crude while the SPR facilities are not built to hold that type of oil. Trump has touted the deal as a way to lower gasoline prices, which continue to tick up ahead of the November midterms due to months-long pressure from the war in Iran. U.S. officials have denied setting any specific timeline for when Americans might see prices at the pump falling because of increased Venezuelan crude imports. Some experts have warned that it could take five to 15 years to see gasoline prices change. Read more from Callie here. THE MAN TAPPED TO LEAD TRUMP’S VENEZUELA OIL VENTURE: Emerging at the center of Trump’s Venezuelan oil deal is a controversial businessman from Caracas: Alejandro Betancourt. As part of the deal in Venezuela, the Trump administration plans to work with Betancourt, whose family owns NABEP, which is the country’s second largest oil firm.Betancourt has played a key role in securing the deal for the Trump administration. The Washington Post reported that he helped to boost his company’s oil production from 18,000 barrels to nearly 200,000 barrels in two years, which caught the attention of the administration. A U.S. official said today that they have “vetted him through our system.” “There are no charges he’s facing in the United States for violation of any of our laws,” they added. “This is a proven operator. If you look at his history as an example, this was a person. I’m not nominating anyone for sainthood here.” However, much controversy surrounds Betancourt, including arrests and money laundering allegations. The 46-year-old businessman is known as a “Bolichico,” or a businessman who built his fortune through government contracts under the former Hugo Chavez or Nicolas Maduro regimes. Betancourt made billions of dollars at his firm, Derwick Associates, where he secured contracts without competitive bidding to build power plants during the Chavez era after a severe power crisis in the late 2000s. In 2017, anticorruption watchdog Transparencia Venezuela accused his company of inflating prices. Derwick denied any wrongdoing and the inquiry did not lead to formal charges. The Organized Crime and Corruption Reporting Project in 2021 also reported that he was involved in corruption and money laundering networks linked to the Venezuelan state. He has faced money laundering investigations in the U.S., Spain, and Switzerland. He was also arrested twice in the United Kingdom after Switzerland and Spain filed separate extradition requests related to alleged money laundering. The Washington Post reported that senior U.S. officials earlier this year called Swiss prosecutors about the investigation into Betancourt. All the rest: JUDGE BLOCKS NEW YORK FROM ENFORCING CLIMATE ‘SUPERFUND’ LAW: A federal judge has struck down New York’s “Climate Superfund” law that aimed to hold fossil fuel companies accountable for the effects of climate change, ruling that the measure is preempted by federal law. Quick reminder: In 2024, Democratic New York Gov. Kathy Hochul signed a bill approving the Climate Change Superfund Act. This established an emissions compensation scheme, requiring large fossil fuel companies to pay $75 billion over 25 years into a fund that would be used to pay for damages caused by climate change. What’s new: The ruling was issued yesterday by U.S. District Court Judge Brenda Sannes, who was appointed by former President Barack Obama. Sannes ruled that New York’s emissions compensation scheme went beyond the Clean Air Act, saying the state law acted outside the jurisdiction of New York. “The Clean Air Act does not ‘authorize’ the Climate Act,” Sannes wrote, adding that the state measure “operates within an area of law ‘in which the federal interest is so dominant’ that it cannot be enforced.”The Department of Justice celebrated the ruling, saying the decision protects the American energy industry from “state overreach.” Principal Deputy Assistant Attorney General Adam Gustafson of the Justice Department’s Energy and Natural Resources Division said: “New York’s law would have expropriated $75 billion from energy companies around the world during an energy emergency and in direct defiance of American foreign policy and federal law. We will continue to fight for affordable, reliable energy for all Americans.”CLIMATE DISASTERS COULD COST THE WORLD $450 BILLION A YEAR: A recent new forecast by risk-modeling company Verisk found that natural disasters could cost the world $450 billion annually. Verisk estimates that about 62% of global losses from natural disasters are uninsured, the Financial Times reports. As a result, households, companies, and governments would need to cover about $279 billion in losses annually. The Financial Times noted that the insurance industry has also seen increasing losses. Last year was the sixth year in a row in which global insured losses hit $100 billion. NEPAL’S FLASH FLOOD DEATH TOLL REACHES 1,000: The catastrophic flooding in Nepal has killed over 1,000 people.Rescuers are deploying heavy machinery, helicopters, and excavators to reach those who are still missing. Reuters reports that teams from China, India, and Nepal are building temporary bridges to reach remote areas and digging through the ruins of hydropower projects, where hundreds of workers have been trapped. At least 4,000 people remain missing.Nepal’s finance minister told Reuters earlier this week that the country may need $4 to $5 billion to rebuild. The United Nations today said the Himalayan region faces severe risks from future glacier floods. Hydroelectric power systems and riverbank communities may be threatened by flooding. “Technology cannot move fast enough to prevent loss along these massive ​river systems that catch the overflow of the glacier lakes,” Kanni Wignaraja, an assistant secretary-general at the UN, told Reuters. In 2020, researchers identified 47 dangerous glacier lakes in Nepal, China, and India, but that number is now significantly higher. Wignaraja said the population at-risk goes into the millions. ICYMI – EPA GRANTS BIOFUEL EXEMPTIONS TO SMALL REFINERIES: The Environmental Protection Agency yesterday granted more than 10 small refineries exemptions from biofuel blending requirements. The EPA granted full exemptions from the 2025 Renewable Fuel Standard requirements to 18 small refineries, while 11 refineries received partial exemptions. The oil industry and agriculture sector have long clashed over the Renewable Fuel Standard, which requires refineries to blend renewable fuel into gasoline or diesel or purchase credits known as renewable identification numbers or RINs. The EPA granted exemptions equivalent to 1.76 billion RINs for 2025, exceeding its estimate. It had estimated that it would grant exemptions equivalent to 990 million RINs for 2025. The agency plans to make up the 770 million RIN difference by adding it to the 2026 and 2027 Renewable Volume Obligations, which are the amounts of renewable fuel refineries must account for during those years. 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