WHAT’S HAPPENING TODAY: Good afternoon and happy Friday, readers! Fourth of July and America’s 250th celebrations are underway in the nation’s capital this weekend. The Great American State Fair has opened on the National Mall, featuring carnival rides, agricultural showcases, and exhibits from states across the country. 🎡🌽🎆 Will you check it out the next time you’re in D.C.? We’re kicking off today’s newsletter with an exclusive on a new report from the Government Accountability Office that warned Congress that the U.S. emergency oil reserves are at risk of operational failure, largely due to aging infrastructure. 👀 Keep reading for all the details. Plus, we have the latest on the drone attacks on ships passing through the Strait of Hormuz – which the president said violates the U.S.-Iran ceasefire. 🇺🇲🇮🇷 Traders don’t appear too worried about escalation in the region, however, as domestic oil prices fell below $70 a barrel this afternoon. 🛢️📉 Read below for more.
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.QUOTE OF THE WEEK: Earlier this week, American Petroleum Institute CEO and president Mike Sommers indicated that there is interest from the industry in expanding the country’s Strategic Petroleum Reserve, and even building new facilities on the West Coast to store more emergency oil reserves. “There are a lot of improvements that we can do from an engineering perspective,” Sommers said on Monday. “We should be thinking about whether the SPR is located in the right place, and whether we should be looking at other places as well…I think we should be looking at the entire West Coast. We should be looking at improving the infrastructure that we currently have in the – in the Gulf Coast, as well. And the East Coast should be a potential post that we should be considering.”EXCLUSIVE – U.S. CRUDE INVENTORIES FACE OPERATIONAL FAILURE, WATCHDOG WARNS: The Government Accountability Office has found that the United States’ emergency stockpile of crude oil is facing significant risks to its ability to operate and meet future energy crises, according to a new report authored by the government watchdog obtained by Callie. The report, which details the results of a performance audit of the Strategic Petroleum Reserve conducted between February 2024 and May 2026, was sent to the House Energy and Commerce Committee this week. As the SPR is experiencing record lows (around 331.2 million barrels as of Monday) the GAO warned that the reserves’ operational capacity faces serious risks if significant changes are not made to upgrade out-of-date infrastructure, address inadequate maintenance of the reserves, and plan for future refills.The big takeaway: In 2014, the Department of Energy first identified that a large portion of the SPR’s infrastructure had reached or exceeded its design life and needed to be replaced. By late 2016, the agency approved a $1.4 billion life-extension project expected to be completed between 2022 and 2024.However, as of May of this year, the project had far exceeded its approved cost and schedule, forcing the agency to reduce its scope of repairs. Potential upgrades and repairs at one facility, West Hackberry in Louisiana, were removed from the project completely. The watchdog said DOE officials have said SPR infrastructure is being held together with “Band-Aids” and officials aren’t sure “how long they will hold.” This includes not only pipelines and brine-disposal systems but also fire-suppression systems.Read more from Callie on the report and what the GAO is urging the executive and Congress to do here. TRUMP SAYS IRAN VIOLATED CEASEFIRE: President Donald Trump said that Iran violated the ceasefire by launching drone attacks at ships in the Strait of Hormuz. A U.S. official said that the Islamic Revolutionary Guard Corps had “struck” a cargo ship “with a drone” yesterday. The attack on the vessel prompted the International Maritime Organization to halt its evacuation operations in the waterways. Trump wrote on Truth Social that one of the drones hit an upper deck of a large cargo ship, adding that damage was done but the ship was able to proceed on its way. He noted that the U.S. was able to take down three other drones. The attack on the ship highlights the fragility of the U.S. and Iran’s interim peace deal. Safety has been a major concern for those in the shipping and maritime industry, due to the threat of attacks and mines.
