Energy News for March 16, 2015

  • by BPC Staff
  • on March 16, 2015


POLITICO Morning Energy for 3/16/2015

By DARIUS DIXON, with help from Darren Goode and Heather Caygle

PONEMAN EXPLAINS HIS JUMP TO CENTRUS: For five years, Dan Poneman was the Energy Department’s No. 2 administrator during a time when the agency steered hundreds of millions of dollars to a struggling nuclear company that has won the backing of both the Obama administration and top Republicans and Democrats in Congress. This month, he’s set to become the company’s president and CEO — a post that will bring him as much as $1.7 million a year. But Poneman’s new job has drawn fire on Capitol Hill since the company announced his hiring March 5, and is prompting watchdog groups to question whether DOE’s revolving-door policies are strong enough. It’s also bringing more unflattering attention to Centrus Energy Corp., the company formerly known as USEC.
Poneman said in an interview that the company didn’t approach him about the job until after he had left the department in October. He said the post will allow him to take a leading role on issues he has championed for decades: fostering nuclear power while controlling the availability of weapons-grade uranium. “I’ve been living and breathing this stuff, not every single day, but it’s a recurring theme,” said Poneman, who has written books about nuclear nonproliferation and served as an expert on nuclear security issues for the National Security Council during the Clinton administration. “When this came up and they were recruiting, I said to myself: Here I am, I’ve been telling people what I think should be done; and they say, well here’s your chance.” Your morning host breaks down the complicated relationship:

GET TSCA, SET, GO: The Senate Environment and Public Works Committee is planning to hold a hearing this Wednesday on new bipartisan Toxic Substances Control Act legislation being championed by Sens. David Vitter and Tom Udall. Their bill — the Frank R. Lautenberg Chemical Safety for the 21st Century Act — would update the 1976 Toxic Substances Control Act and has drawn another seven Democratic and eight Republican cosponsors. The widow of the late New Jersey senator, Bonnie Lautenberg and Udall will make opening statements at the Wednesday hearing. Jim Jones, the EPA’s assistant administrator for chemical safety and pollution, will then testify, and then another panel is then expected to include folks from the Environmental Defense Fund, George Washington University as well as the Maryland attorney general Brian Frosh.

It may be bipartisan but it’s apparently anti-California, as far as California’s concerned. Sen. Barbara Boxer, the top Democrat on EPW, has slammed the bill as “worse than current law.” Instead, the California lawmaker found an ally in East Coast Sen. Ed Markey and the pair introduced competing TSCA legislation a couple of days after the Vitter-Udall bill (S. 697) was unwrapped. Sen. Bernie Sanders has also joined the Boxer-Markey bill (S. 725).

WELCOME TO MONDAY. I’m your morning host, Darius Dixon, and now that we seem to be done with snow and sleet for the time being, let ME be the first to preemptively complain about the coming summer heat. We’re checking in on when the pools open. This is POLITICO so we like to be first at everything. Send your energy commentary, news, scoops and tips to, and follow us on Twitter @dariusss, @Morning_Energy and @POLITICOPro.

BOTH HOUSES OF CONGRESS are back in town this week. The Senate convenes at 3 p.m. and is expected to hold a roll call vote at 5:30 p.m. on the nomination of Carlos Monje, Jr. to be an assistant secretary of Transportation for policy. He has been a counselor to Transportation Secretary Anthony Foxx since February 2014. After that, a voice vote is expected on the appointment of Vice Admiral Manson Brown to be the Commerce Department assistant secretary for environmental observation and prediction. The House is also back today, after a week-plus recess, with a vote at 6:30 p.m.

THRIVING IN THE SHADOW OF KEYSTONE INDECISION: Via The Associated Press: “In a far corner of North Dakota, just a few hundred miles from the proposed path of the Keystone XL pipeline, 84,000 barrels of crude oil per day recently began flowing through a new line that connects the state’s sprawling oilfields to an oil hub in Wyoming. In West Texas, engineers activated a new pipeline that cuts diagonally across the state to deliver crude from the oil-rich Permian Basin to refineries near Houston. And in a string of towns in Kansas, Iowa and South Dakota, local government officials are scrutinizing the path of pipeline extensions that would pass nearby.

“While the Keystone project awaits a final decision, scenes like these are unfolding almost every week in lesser-known developments that have quietly added more than 11,600 miles of pipeline to the nation’s domestic oil network. Overall, the network has increased by almost a quarter in the last decade. And the work dwarfs Keystone.” The AP:

CALLING ALL REGULATION NERDS: For those not yet in the know, the Pro Energy team’s Erica Martinson pulls together the world of energy regulation into a pretty rockin’, wonky, bi-weekly tipsheet. Get caught up on EPA-, FERC- and Energy Department-related lawsuits, and announcements on oil train regs. Here’s the latest edition:

SIERRA CLUB CAMPAIGN TO STORM THE HILL: Dozens of community leaders from at least 16 states — including Michigan, Tennessee and Wisconsin — are expected to rush the halls of Capitol Hill this week as part of a Sierra Club campaign to press lawmakers to support the EPA’s efforts to address coal ash, carbon emissions and smog. The people flying and driving in are a mix of retirees from Missouri to Illinois community activists and veterans, college students and school administrators.

WRITE ME FROM LAUSANNE: Energy Secretary Ernest Moniz today is once again headed to Switzerland — this time to Lausanne — to continue circling Lake Geneva as a member of the U.S. delegation involved in the nuclear negotiations with Iran. The third time’s the charm, right? Like the trip earlier this month, the negotiating team, led by Secretary of State John Kerry, includes the National Nuclear Security Administration’s nuclear safeguards director Kevin Veal as well as Moniz advisor and body man Mark Appleton. The U.S. negotiating team will meet with Iranian and European Union officials this week as part of the trip. A week from tomorrow is the White House’s rough deadline for reaching an agreement — or not — with Iran.

DOE TO MAKE OUT LIKE A BANDIT ON OIL: The Energy Department is planning to buy up to 5 million barrels of oil to replenish the Strategic Petroleum Reserve after a test sale last year, reports the Midland Reporter-Telegram. “The planned purchase of sweet crude between June 1 and July 31 is required by federal laws forcing the Department of Energy to buy back petroleum products within one year, using the proceeds from a test sale. In this case, the recent collapse in crude prices means the government is set to make money on the two transactions.” Some of the proceeds from last year’s sale have already been used to establish the gasoline reserve for the Northeast, a DOE spokesperson told Jennifer Dlouhy. “With the remaining funds left in the account, the Department of Energy is initiating a buyback process to purchase additional crude oil for SPR sites along the Gulf Coast,” the spokesperson said.

For those who don’t recall: DOE conducted a test sale of nearly 5 million barrels of crude oil from SPR sites in Texas and Louisiana between March and July to find out how SPR drawdowns may be affected by changes like the boom in domestic production and increased imports of Canadian crude. Oil buyers had trouble securing capacity in a Shell pipeline because of huge amounts of Eagle Ford crude being moved from Texas to Louisiana, DOE said in a November report ( to Congress.

And in case you were wondering: DOE made $468,564,599 off last year’s test sale. The weighted average price paid for the oil was $93.75 per barrel.

FEINBERG: ENERGY INDUSTRY NEEDS TO DO MORE ON OIL TRAINS: Acting Federal Railroad Administrator Sarah Feinberg says the energy industry should step up and do more to make the transport of crude oil by rail safer, adding that railroads have gone above and beyond. “We are running out of things that I think we can ask the railroads to do,” Feinberg told reporters Friday. “[W]e are getting to a point where I think we’re running out of things that we can put on the railroads to do, and there have to be other industries that have skin in the game,” she added. When pressed about what other industries, she responded that she has been “calling on the energy industry to do more for weeks, if not months. Quietly for months, much more vocally for weeks.” Read more:

NEW TRAIN VALVES TO BE RAILROADED: The FRA is requiring railroad tank car owners to replace thousands of unapproved valves installed in some DOT-111 cars because of concerns that they are leaking small quantities of hazardous materials. About 11,200 of the valves by McKenzie Valve & Machining have been sold to tank car owners and facilities, with DOT estimating that about 6,000 tank cars are actually using them. Owners have 60 days to comply. The leaky valves are not related to ongoing concerns about the safety of unit trains transporting crude oil.


— UN backs fossil fuel divestment campaign. The Guardian:

— Why the global economy is growing, but CO2 emissions aren’t. The Washington Post:

— Murray Energy to pay $1.4B to acquire control of St. Louis-based Foresight Energy. The St. Louis Post-Dispatch:

— Q&A: Laid-off oil workers should be positive, flexible. The Houston Chronicle:

— Campaign aimed at altering Va. route of natural gas pipeline. The Associated Press:

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