Regulatory decisions about America’s bounty of natural gas are in the hands of an obscure and understaffed federal agency with a limited mandate to think about climate change.

Why it matters: With America’s production of oil and natural gas soaring and Congress not acting on climate change, the once-sleepy Federal Energy Regulatory Commission is finding itself at the center of protests and lawsuits.

• Interviews with all 4 FERC members illustrate their division over how to handle greenhouse gas emissions.

Driving the news: Democratic FERC commissioner Richard Glick wants to require companies seeking approval for pipelines and LNG export terminals to offset GHG emissions, similar to the way companies compensate for more traditional environmental impacts like creating wetlands.

• Natural gas is cleaner than coal and oil, but as a fossil fuel it still emits heat-trapping emissions.

The other side: “I just fundamentally disagree with Commissioner Glick on this matter,” said Neil Chatterjee, the panel's Republican chairman. “The approach the commission has been taking is what we are statutorily obligated to do.”

Where it stands: Chatterjee pointed to the commission’s February approval of a gas export terminal, calling it a “breakthrough” because it was the first in two years and because it listed the GHG emissions associated with the project. (Glick dismissed the move as "window dressing.")

“I’ve been out there as a Republican from Kentucky and as a Trump appointee talking about climate change and the need to mitigate emissions. And if we can’t have a rational conversation about the role that U.S. LNG exports have in reducing global carbon emissions, I don’t think we’re ever going to get pragmatic solutions in this area.”

Between the lines: FERC's relatively limited legal authority is in the economic realm and rests largely on two nearly century-old laws — the Federal Power Act and the Natural Gas Act — that aren't environmentally focused.

• It's also short-staffed. Normally, it should have 5 commissioners — today it's at 4 and about to drop to 3.
• Democratic commissioner Cheryl LaFleur has struck the most centrist position and has often cast the commission’s tie-breaking votes. On this, she supports Glick's idea.

What's next: LaFleur is resigning next month, at which point the two GOP commissioners will have a clear majority and be able to approve controversial projects over Glick's opposition.

Go deeper: Read the whole column.

Oil prices are higher following Iranian seizure of a British oil tanker in the Strait of Hormuz late last week that escalated tensions around the crucial shipping lane.

But, but, but: They're not that much higher — Brent was trading up roughly 0.64% to $62.87 this morning as we hit send on this newsletter.

The big question: Why aren't markets freaking out over the drama in a region where an amount totaling one-fifth of the world's oil supply passes each day?

What they're saying: Oil analyst Ellen Wald offered me a few reasons.

"Current and potential future weakness in demand is of much bigger concern these days than supply. Macroeconomic indicators and sentiment concerning the U.S.-China trade war are much more potent issues for the market."

She notes that none of the incidents in and around the strait in recent weeks have actually impeded movement of crude oil.

• Tankers allegedly sabotaged by Iran's Islamic Revolutionary Guard Corps weeks ago were not carrying crude, while the British tanker was empty.
• Also, "U.S. production is a much more relevant force in supply and oil pricing today," Wald points out.

Threat level: The potential for more serious conflict in the region is higher than the market response would suggest, per Richard Nephew, a former State Department official and National Security Council aide.

• "Of the most surprising and perplexing developments of 2019, is the readiness of oil markets to view the security threat in the region as 'situation normal,'" Nephew, now with Columbia University's Center on Global Energy Policy, writes in a post published Friday.
• His piece takes stock of the recent incidents between the U.S.and Iran and the diplomatic collision over uranium enrichment.

The bottom line: "Taken in combination with the constant churn of crisis in the region and Iran’s wide array of proxies (some of which may be under greater or lesser Iranian control), this is a combustible mixture," Nephew writes.

Tesla's financial struggles will be in the spotlight this week as the Silicon Valley electric automaker reports Q2 earnings after markets close on Wednesday.

What's next: The company is expected to report a second consecutive quarterly loss despite record deliveries for the April–June stretch.

That brings us to an insightful piece by Axios' Joann Muller, where she reports Tesla is beginning to behave like the Detroit Three carmakers during their most desperate days.

Why it matters: By pumping incentives and slashing prices, analysts say the electric car manufacturer appears to be signaling that it prioritizes vehicle deliveries and cash generation over margins.

• In addition to this week's expected Q2 loss, Tesla also risks alienating loyal customers and destroying its considerable brand equity — problems Detroit is all too familiar with.

What's happening: A dizzying string of recent price adjustments on Tesla cars is a sign of internal chaos over how to deal with shrinking U.S. incentives, aging model lines, and pressure to boost deliveries, Bloomberg reports.

Plus, Tesla has reasons to pump up sales, even if it means sacrificing profits, writes Barclays automotive analyst Brian Johnson in a note to clients.

• With future capital raises likely, it's important to show growth to potential investors.
• Tesla also makes money selling regulatory credits to other carmakers, so the more cars it sells (even at a loss), the more revenue it makes from credit sales.

Read more

Breaking Monday: BP and the agribusiness giant Bunge said they're forming a joint biofuels and sugar venture based in Brazil.

What they're saying: "In one step, this agreement will allow BP to significantly grow the size, efficiency and flexibility of our biofuels business in one of the world's major growth markets," Dev Sanyal, CEO with BP Alternative Energy, said in a statement.

What's next: Per the announcement, the new JV called BP Bunge Bioenergia will operate 11 mills in Brazil. The sites will be powered by electricity generated by waste biomass from sugar cane, and surplus power will go to Brazil's grid.

Go deeper: Grain trader Bunge to form bioenergy firm with BP (Reuters)

New CBS News polling of 18,550 registered voters shows that 78% of Democratic voters in 18 early primary and caucus states view climate change as "very important" in the 2020 election.

Why it matters: The findings for the poll, which was conducted July 9–18, underscores how the topic is playing a prominent role early in the 2020 contest.

• Climate ranks second to health care, which 88% of respondents call "very important" in the survey released Sunday.
• That puts climate ahead of income inequality (at 71% for 3rd).
• The difference is outside the plus-or-minus 1.5% margin of error in the poll of 8,760 registered Democratic and Democratic-leaning Independents.

Where it stands: The views on climate change vary from state to state, and the individual state data is less robust. But with that throat-clearing...

• In Iowa, site of the first contest, 75% of these voters called climate very important, behind health care at 89% and ahead of "jobs and wages" at 68%. The margin of error for this subset is 4.4%.
• In New Hampshire, where the primary comes after the Iowa caucuses, climate was again in 2nd among topics with 81% calling it very important, compared to 88% for health care. The error margin for the New Hampshire sample is 5%.