Energy News for February 2, 2015

  • by BPC Staff
  • on February 2, 2015

Politico Morning Energy: The big questions for Budget Day – Quadrennial Energy Review now at White House – House could vote on Senate Keystone bill next week – Union strikes at refineries

By Alex GuillenIT’S BUDGET DAY: President Barack Obama will release his first budget proposal to a GOP-controlled Congress today, and while the document is generally consider DOA on the Hill, it will provide insight into what programs are getting the White House’s attention in the final two years of his presidency. Reuters, citing unnamed administration officials, has a few early numbers, including that the proposal will include $7.4 billion for clean energy technologies, almost a billion dollars more than this year’s enacted level, as well as $4 billion for a fund pushing states to accelerate emissions cuts. The funding would go to states that achieve targets early or by exceeding goals. The budget will also include proposals to permanently extend the wind production tax credit and the solar investment tax credit, according to Reuters: BIG QUESTIONS FOR TODAY

Cuts or growth at EPA? The president proposed a 3.7 percent cut for EPA’s budget last year, with reductions in staff and spending on a big-ticket state water loan program taking the brunt of the damage. Meanwhile the agency’s climate activities, including its big greenhouse gas emissions rules, got a boost in staff and budget. Senate Majority Leader Mitch McConnell has vowed to use the appropriations process to go after EPA and its climate rule, saying that pulling purse strings is the “best tool” against such executive action.

Where is the emphasis at DOE? The Energy Department has long been a grab bag of priorities for Republicans. Popular programs like ARPA-E, national labs and basic science research are generally safe from major budget cuts. But the GOP has long sought to shift some funding away from renewables and efficiency research and into advanced fossil fuel research and nuclear programs. Last year’s White House proposal included ideas for several programs that promptly fell flat on the Hill, including an Energy Security Trust and a Race to the Top-style energy efficiency program for states.

The $3 billion question: The president has pledged the U.S. to a $3 billion initial contribution to the Green Climate Fund, but any path toward securing appropriations is going to be uphill. The administration plans to parse that request out over several years’ worth of budgets, which lessens the blow, and White House officials note that former President George W. Bush committed $2 billion toward a similar World Bank climate investment fund. But Republicans have already begun pushing back on the idea of giving to the GCF; December’s omnibus spending bill included language blocking any money from going toward the fund, at least for fiscal 2015.

More money at Interior? Last year’s proposal included boosts for the Bureau of Land Management’s oil and gas program and for the Bureau of Ocean Energy Management. The Bureau of Safety and Environmental Enforcement and programs permitting renewable projects both saw some trims. One proposal with a better chance of bipartisan support is a funding boost for the National Park Service, which is hoping for more money for upgrades ahead of its centennial in 2016. Funding for federal firefighting efforts, split between Interior and the Agriculture Department, will draw extra interest this year as well.

WHAT WE DO KNOW: A White House fact sheet offering a broad look at budget items reiterates the administration’s green agenda: ‘[T]he Budget invests in clean energy, improving energy security, and enhancing preparedness and resilience to climate change. These investments support the President’s Climate Action Plan, helping to expand American leadership in the clean energy economy with new businesses, jobs, and opportunities for American workers.’

Briefing schedule: Interior Secretary Sally Jewell hosts a media briefing at 1:30 p.m., followed by Energy Secretary Ernest Moniz’s press briefing at 2:30 p.m. EPA and the NRC will also host briefings later today.

HAPPY BUDGET DAY and welcome to Morning Energy, where the Patriots may have Seattle, but last night’s real winner was Cheryl LaFleur. Send your energy news to, and follow on Twitter @alexcguillen, @Morning_Energy and @POLITICOPro.

SPOTTED during the super bowl: An American Petroleum Institute ad featuring the group’s “Lady in Black,” and one of Koch Industries’ “We are Koch” spots.

QER NOW AT WHITE HOUSE: The Energy Department has sent the draft Quadrennial Energy Review to the White House for review, a spokeswoman confirmed to ME. By executive order, the report was due to the president on Saturday. It’s unclear when the White House plans to release the review, which is meant to outline the nation’s various energy challenges. The QER task force was overseen by the White House’s Office of Science and Technology Policy and Domestic Policy Council, with DOE coordinating the nearly two dozen departments and agencies involved. The report is due every four years, leaving the 2019 iteration in the hands of the next administration.

HOUSE COULD VOTE ON SENATE KEYSTONE BILL NEXT WEEK: House Republican leadership would like to vote next week on the Senate’s bill to jump-start Keystone XL, which would send it to President Barack Obama’s desk before the Presidents Day recess, multiple senior aides say. The strategy still has to be discussed with the broader House Republican Conference, and senior aides stress that no final decision has been made. But the emerging strategy is likely to give Obama his first opportunity to veto legislation from a Republican-controlled Capitol Hill – and may push his administration to reach a verdict on the pipeline itself more quickly than expected. Jake Sherman and Elana Schor:

KERRY HAS KEYSTONE IN HIS HANDS: Secretary of State John Kerry noted over the weekend that today is the deadline for various federal agencies to comment on the State Department’s review of Keystone XL – and that the administration continues to oppose congressional interference. “The process needs to be honored, not circumvented, and that means that there has to be the thorough sort of process of determination. So we’re continuing to conduct the rigorous, and, I might add, transparent objective review,” Kerry said after meeting with Canadian and Mexican officials in Boston. “All the agencies have to report back to us. And at that point, it’s in our hands for me to make a recommendation to send to the president, the president to make a decision at some point in the future. I think by this Monday, all the relevant agencies, per the president’s executive order, have to report in, and then we will analyze and address that information as appropriate. That’s what I intend to do.”

ALBERTA PREMIER TO PUSH W.H., STATE ON KEYSTONE: Alberta Premier Jim Prentice is in Washington this week, and he will talk Keystone XL with White House and State Department officials, as well as lawmakers. This is Prentice’s first trip abroad since he took Alberta’s top post in September. He also plans to address the U.S. Chamber of Commerce and will meet with New Jersey Gov. Chris Christie. Toronto Sun:

Reading between the lines: Prentice’s visit is “not just about a single pipeline,” a spokeswoman told the Sun. In President Barack Obama’s State of the Union last month, he urged lawmakers to “set our sights higher than a single oil pipeline.”

UNION STRIKES AT REFINERIES: The Wall Street Journal writes: “United Steelworkers at refineries that produce nearly 10% of the nation’s gasoline, diesel and other fuels went on strike Sunday, after contract negotiations broke down over salaries and safety concerns, union officials and companies said. The USW told members at nine refineries and chemical plants from Texas to California to walk out after their shifts were over and not to return until a new three-year collective bargaining agreement was reached. The strike affects 3,800 workers, the union said. … Tesoro Corp., Marathon Petroleum Corp., LyondellBasell Industries and Shell have said contingency plans to use nonunion labor will keep striking refineries running, and other plant operators have said they have similar plans if workers at their sites go on strike.” WSJ:

INTERIOR ASKS JUDGE TO TOSS SUIT AIMING TO HALT COAL LEASING: The Interior Department on Friday asked a federal judge to toss out a lawsuit backed by Microsoft co-founder Paul Allen seeking to force the government to stop further coal lease sales while it prepares a programmatic environmental impact statement for the federal coal leasing program to account for new information on climate change. Interior argues that it has ‘no legal duty to prepare a supplemental EIS’ for the 1979 environmental review used for NEPA compliance in coal lease sales since 1979. And in any event, Interior notes, ‘every leasing decision Interior makes… is subject to individual NEPA analysis, as the 1979 regulations require to this very day.’ The suit was brought by the Western Organization of Resource Councils and Friends of the Earth. Motion:

Plus: The state of Wyoming – the top coal producing state in the U.S., which gets most of its coal from federal lands – wants to get in on the action, filing a motion Friday for permission to intervene in support of Interior. The state is looking to defend the significant tax revenues generated by coal mining from federal lands, which in 2013 totaled more than $269 million in severance taxes, $237 million in ad valorem taxes and $238 million in lease bonus payments to the state. The state also filed its own motion to dismiss. Read:

BLM GIVES THUMBS UP TO WIND PROJECT’S INFRASTRUCTURE: The Bureau of Land Management on Friday announced it has given the green light for the infrastructure portion of a proposed $5 billion wind energy project in Wyoming. The first of two site-specific environmental assessments, this decision indicates that three facilities needed for building and operating the Chokecherry and Sierra Madre project – a haul road, a rail facility and a rock quarry – have cleared environmental review. The second, still-to-come EA covers the project’s plans to construct the first phase of 500 turbines. If and when BLM issues an approval, it will also authorize a right of way for development. If both 500-turbine phases are eventually built, the CCSM project would be the largest wind farm in North America, and would have a capacity of around 3 gigawatts. The developers, a subsidiary of the Anschutz Corp., say the project can move forward even without the wind production tax credit. Documents available here:


– The Baltimore Sun looks at the proposed Exelon-Pepco merger’s travails getting approval in Maryland:

– Two BP-spill related lawsuits make their way through federal courts this week. AP:

– Alpha Natural Resources will idle work at two West Virginia coal mines, citing market conditions and federal regulations. AP:

– One proposal to clear plutonium-exposed land: Goats. AP:

– MillerCoors turns on the biggest solar installation at any U.S. brewery, generating enough power to make 7 million cases on beer annually. San Gabriel Valley Tribune:

Week In Review:

Senate Approves Keystone Bill, but White House Not Amused

  • After a month-long debate, the Senate voted 62-36 to approve the Keystone XL oil pipeline. Nine Democrats voted yes. The measure is the first passed
 by the Senate in the new Congress.
  • National Journal compiled a political scorecard of the showdown, giving victories to Mitch McConnell, climate advocates and hydraulic fracturing, and losses to Ted Cruz (R–Texas), wind power and Republican political strategists.
  • The Senate’s bill has to be reconciled with the House version passed earlier this year. Assuming it passes, the measure is still likely dead on arrival at the White House. NPR reports.
  • Meanwhile, EPA said it will file a response to the State Department’s environmental review of Keystone. The letter could be the final determinant for Obama in deciding whether to approve the project, Bloomberg reports.


Oil Companies Report Ugly Q4 Earnings

  • In a span of five hours on Thursday, the first major oil companies to report earnings announced $20 billion in spending cuts. Bloomberg reports. The bear oil market has wiped out nearly $400 billion since June. Bloomberg writes that most people have only noticed lower gas prices; they haven’t noticed yet it’s hitting their portfolios, too.
  • Oil prices are on track to fall for the seventh month in a row. Silver-lining: On Friday crude jumped 8 percent – it’s best day since June, 2012. CNBC has the story. The short explanation: prices have been relatively stable over the past two weeks and investors were happy to learn how many rigs had been shut down.
  • Oil tycoon Harold Hamm said U.S. energy producers are partly to blame for the collapse of oil prices and told companies to stop pumping so much crude. Hamm is CEO of Continental Resources, which has cut back drilling this year, but still expects to produce more oil in the first half of 2015. The Wall Street Journal reports.

Renewables Need Not Fear Low Oil Prices

  • According to the EIA, low oil prices aren’t hampering the renewable energy market, the Guardian reports. Instead, countries across the globe are using market conditions as justification to strip subsidies from fossil fuels and replace them with investments in clean energy. Read the story from Bloomberg.

What’s Ahead: 

  • The White House releases its budget proposal Monday. Stay tuned for coverage from Morning Consult.
  • On Thursday, the House and Senate meet for a joint hearing on the state and local impacts of the administration’s proposed expansion of waters regulation. 


Morning Consult Energy Top Reads: Dec. 15 – Dec. 19

1) Natural Gas’ Green Friends Are Gone

from Morning Consult by Davis Burroughs


2) Winners and Losers in the Senate’s Keystone Pipeline Showdown       

from National Journal by Ben Geman


3) Voters Want an ‘All-of-the-Above’ Energy Bill

from Morning Consult by Davis Burroughs


4) On climate change, ‘not a scientist’ not enough for some U.S. Republicans

from Reuters by Valerie Volcovici and Amanda Becker


5) SOTU: Voters’ Real-Time Opinions on Keystone

from Morning Consult by Davis Burroughs


6) New Report Urges Western Governments to Reconsider Reliance on Biofuels

from the New York Times by Justin Gillis


7) Harold Hamm Says U.S. Oil Firms Can Help Right the Market

from the Wall Street Journal by Erin Ailworth


8) Worry for Solar Projects After End of Tax Credits

from the New York Times by Diane Cardwell


9) Obama administration to propose new wilderness protections in Arctic refuge — Alaska Republicans declare war

from the Washington Post by Juliet Eilperin


10) EPA Critique Buoys Keystone Critics After Congress Backs Project

from Bloomberg by Jim Snyder and Mark Drajem


Today’s Washington Brief:

  • The White House will unveil a $4 trillion budget proposal today. It includes a six-year, $478 billion public works program that would fund infrastructure projects like roads, railroads and ports. Obama’s previous attempts to secure infrastructure funding were unscucessful. The Washington Post
  • Scott Walker (Wiss.) leads a tightly packed field of Republican presidential contenders in the latest Iowa poll. USA Today reports.


Today’s Business Brief:

  • Crude oil prices surged Monday following a union-led refinery strike and sharp drop in U.S. production. CNBC has the story.
  • S. oil tank car lease rates have come to an abrupt halt as crude oil spreads have narrowed. That’s bad news for rail companies like CSX, Reuters reports.
  • Facing rising costs, the timeline for Georgia’s nuclear power plant expansion, the first new reactor slated to come online in decades, has been pushed back to 2019. E&E

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