- Wall Street Journal: Some oil majors see poor results from non-U.S. shale development
- Oil & Gas Journal: Lawmakers offer bills to bar draft EPA ozone standards
POLITICO Morning Energy for 3/20/2015
By DARIUS DIXON, with help from Alex Guillén, Erica Martinson, and Darren Goode
INTERIOR’S FRACKING RULES READY FOR LAUNCH: The Obama administration is set to unveil the first major nationwide safety restrictions on fracking, touching off a fresh political confrontation between the president, his critics in Congress and the energy industry. The Interior Department’s rules — expected to be released as soon as Friday — are the federal government’s most comprehensive foray to date toward regulating the technology at the heart of the U.S. oil and gas boom, addressing worries such as potential dangers to drinking water. They will also offer oil and gas supporters new room to accuse President Barack Obama of seeking to throttle fossil-fuel production, despite his repeated boasts about the nation’s booming energy supplies.
The relative glut in fossil fuels has also weakened the bottom lines of many oil and gas producers, making them vulnerable to what Dan Naatz, a senior vice president at the Independent Petroleum Association of America, described as a regulatory “death by a thousand cuts.”
Greens, meanwhile, will likely have a mixed reaction despite potentially winning some concessions in Interior’s final version of the regulations. Anti-fracking activists denounced an earlier draft from Interior as too weak, saying the president should do more to tamp down oil and gas production amid worries about illnesses, damaged roads, explosive fuel trains and even earthquakes, which some scientists suspect have been triggered by underground disposal of drilling waste. Elana Schor has more: http://politico.pro/1I2FZ0u
DEAR GOV, RESIST EPA RULE. SINCERELY, MCCONNELL: Senate Majority Leader Mitch McConnell has urged all 50 governors to reject EPA’s proposed greenhouse gas rule for existing power plants, known as the Clean Power Plan. “Some have recently suggested that failing to comply with the EPA’s requirements would be to disregard the law. But the fact is, it is the EPA that is failing to comply with the law here,” McConnell wrote in a letter yesterday. McConnell quoted liberal Harvard professor and new GOP favorite, Laurence Tribe, who called the plan “constitutionally reckless.”
The letter doubles down on McConnell’s “just say no” campaign, which was launched in his recent opinion piece that called for states to decline to work with the agency or submit plans to cut CO2. EPA is due to issue a final rule this summer. McConnell said the plan would have major costs for little benefit, and suggested governors “carefully review the consequences before signing up for this deeply misguided plan. I believe you will find, as I have, that the EPA’s proposal goes far beyond its legal authority and that the courts are likely to strike it down.” The letter: http://politico.pro/1GvTjJO
Speaking of the courts: The proposed rule faces its first major legal challenge on April 16 when a federal appeals court will hear oral arguments over whether EPA had authority to write the regulation.
HAPPY FRIDAY! I’m your host, Darius Dixon, and I’m shaking my fist at the sky (*shakes fist vigorously*) at winter’s parting shot. But sometimes you have to take things in stride like the Honey Badger: http://bit.ly/1MOuKeS. Send your energy commentary, news, scoops and tips to ddixon@politico.com, and follow us on Twitter @dariusss, @Morning_Energy and @POLITICOPro.
BOTH HOUSES OF CONGRESS closed up shop yesterday and will be back on Monday. Both plan to begin discussing fiscal 2016 budget resolutions next week.
During debate in the Senate Budget Committee yesterday Sen. Tim Kaine — who represents base-rich Virginia — successfully attached an amendment to the fiscal 2016 budget resolution that “would establish a deficit-neutral reserve fund to bolster the resilience of mission-critical Department of Defense infrastructure to better withstand the impacts of climate change.”
WE OFFICIALLY HAVE A SENATE EX-IM OFF: A pair of competing bills aimed at renewing the Export-Import Bank were introduced in the Senate yesterday. One bill, led by Sens. Mark Kirk and Heidi Heitkamp, as well as another six senators evenly split between Republicans and Democrats, would extend the Ex-Im’s charter for four years and lower its lending cap from $140 billion to $135 billion. The legislation would also raise the percentage of the agency’s operations that must go toward supporting small businesses from 20 to 25 percent. Meanwhile, Sen. Jeanne Shaheen, and three fellow Democrats, introduced their own version that would renew the Bank for seven years, and raise its lending cap by $20 billion, to $160 billion.
The other important difference: Besides funding, the biggest difference between the two bills relates to existing restrictions on coal financing. Shaheen’s bill does not include language that would permanently override restrictions on the financing of coal-fired power plants abroad. On the other hand, the Kirk-Heitkamp bill removes coal restrictions completely by prohibiting discrimination against any energy sources. The Kirk-Heitkamp bill: http://politico.pro/1Gwnmkw. The Shaheen, Democrat bill: http://politico.pro/1I2Ehw9 (h/t Pro Trade’s Victoria Guida)
SENATE GOP TAPS NOIA: The public affairs director of the National Ocean Industries Association will become the new digital director for the Senate Republican Conference under Sen. John Thune. “Working on the Hill has been a goal of mine since I moved to DC six years ago and I’m excited to get to work serving our country,” Robert Myers wrote in an email last night. “I will always support NOIA’s mission, fighting for offshore access, and am excited for the potential opportunities in the next few years expanding American made energy.”
EPSA URGES SCOTUS TO REJECT DEMAND RESPONSE CASE: The Electric Power Supply Association, and other FERC critics, urged the Supreme Court to ignore the Obama administration’s request that it rescue the agency’s demand response rule, which was vacated by a lower court last year. The appeals court ruling last year said that FERC’s Order No. 745 trampled on states’ authority to regulate retail markets and EPSA argued that the decision should stand. The group also noted that there is no circuit split on the issue and pointed out that the government did not ask for a review on one of the two grounds used to vacate the rule — that the program was arbitrary and capricious. “States remain free to develop and regulate their own demand response programs, and FERC remains free to use the many tools at its disposal to encourage them to do so, and to ensure that wholesale markets operate efficiently,” EPSA wrote. EPSA’s filing: http://politico.pro/1CygwMa
On timing: EPSA predicts that a decision on whether to take the case could come as soon as April 27, though that date could easily be pushed back. And should the justices actually take the case — many are skeptical that they will — arguments won’t happen until the fall, with a decision coming by winter at the earliest.
Flashback: As legal eagles will remember, FERC preemptively addressed some of EPSA’s arguments in its own filing earlier this year. It argued that a circuit split is unlikely because, were FERC to write a new rule, it probably would be challenged in the D.C. Circuit, where this case has created binding precedent. And the government argued that the arbitrary and capricious issue is immaterial to the question of whether FERC has jurisdiction here, and that those concerns could be fixed on remand.
RINS MOST WANTED: EPA and the Justice Department have reached a $3 million settlement with Washakie Renewable Energy, a company that allegedly generated more than $2 million worth of invalid renewable fuel credits. Between January and October 2010, Washakie generated more than 7.2 million Renewable Identification Numbers and told EPA that it produced biodiesel associated with those RINs at its facility in Plymouth, Utah, when in fact it produced … zip. The RINs represented a carbon dioxide reduction of about 30,000 metric tons. The settlement was lodged in the D.C. District Court yesterday. EPA said that because Washakie purchased and retired an equal amount of RINs to the number identified as invalid and used for compliance purposes, the agency doesn’t plan to request the parties who used the invalid RINs to replace them. More info, including the settlement: http://1.usa.gov/19DuvoP
NREL CHIEF TO RETIRE: After ten years at the helm, Dan Arvizu will retire from the directorship of the Energy Department’s National Renewable Energy Lab at the end of September. Arvizu was also president of the Alliance for Sustainable Energy, LLC, the entity that runs NREL for DOE, and is currently chairman of the National Science Board, which oversees the National Science Foundation. In a statement, Energy Secretary Ernest Moniz credited Arvizu with making NREL “world renowned for clean energy advancement and cutting-edge science.” The lab studies everything from grid integration to materials research. “I have no doubt the laboratory will continue to be an innovation leader and primary source of technical knowledge and insights that impact the transformation of global energy systems,” Arvizu said in a statement.
GOPER WINS AUDUBON AWARD: The New York Audubon is awarding GOP Rep. Chris Gibson its highest award tomorrow, the William B. Hoyt Environmental Excellence Award, for his dedication to protecting the state’s environment. His advocacy for the Land and Water Conservation Fund, the Forest Legacy Program, the Long Island Sound and Great Lakes restoration got the group’s attention. Coincidentally, Gibson was also the sole Republican to vote against two GOP EPA bills this week.
THE OTHER ME: Maine Sen. Angus King is attending two solar power unveilings in his state, one feeding the Maine Audubon headquarters and another juicing the Wells Reserve at Laudholm. The Wells Reserve paid for the $200,000-plus solar system in part with grants from NOAA.
Although he’s been in the Senate for two years now, my love for the name “Angus King” hasn’t diminished. I think the parents of POLITICO Energy editor Bob King really missed a golden opportunity.
QUICK HITS
— When legally liable, companies don’t dispute global warming. Greenwire: http://bit.ly/1BE6iV4
— Oregon zombie coal subsidy returns and gets killed again. The Oregonian: http://bit.ly/1MSoJfl
— DEP worker sent home after sharing climate-change views. The Tallahassee Democrat: http://on.tdo.com/1x6SMhg
— Rep. Bishop: Protect coal plants to help the manatees. McClatchy/The Miami Herald: http://hrld.us/1Ly72WX
— Europe’s Power Grid Braces for Friday’s Solar Eclipse. The Wall Street Journal: http://on.wsj.com/1EzcHWi
— Gates Foundation’s $1.4bn in fossil fuel investments. The Guardian: http://bit.ly/1AMcifj
— These are Tesla’s main rivals in energy storage. MarketWatch: http://on.mktw.net/1I2NILW
— ComEd adds heat to already-boiling Illinois energy politics. Crain’s Chicago Business: http://bit.ly/1C2tUHX
Tags: energy, fuel, gas, oil