- Wall Street Journal: Private Equity Hunts for Oil Deals Outside U.S.
POLITICO Morning Energy for 6/18/2015
By ELANA SCHOR, with help from Alex Guillén and Darren Goode
PAPAL CLIMATE ENCYCLICAL DAY: The Vatican formally releases Pope Francis’ much-anticipated encyclical on climate change and the environment bright and early today, and the pontiff’s perspective promises to roil the already turbulent politics of greenhouse gas emissions. In addition to the human role in global warming, the papal message is expected to broadly address protection of species and natural resources. Find it on the Holy See’s homepage: http://bit.ly/1i9vkTR
Liberal super PAC American Bridge is releasing a 24-page research document linking early critics of the encyclical to the Koch brothers, a sign that Democrats plan to use the papal message to their advantage: http://politico.pro/1JVMNRH. And an email circulated on the Hill on Wednesday by Arch Coal, first leaked to The Guardian by Greenpeace, suggests that industry interests plan to respond by highlighting the positive effects of fossil fuels in combating “energy poverty” in developing nations. Check out a copy of those talking points here: http://politico.pro/1QF9qxE
BEEN WAITIN’ ON YOUR CALL: Four separate public briefings are already scheduled for today to give faith leaders of various stripes a chance to weigh in on “Laudato Si,” the encyclical’s Latin title. Many members of Congress have opined ahead of its official release.
“The pope is basically saying it the way it is,” Sen. Barbara Boxer (D-Calif.) declared in a Wednesday colloquy with fellow climate hawk Sen. Brian Schatz (D-Hawaii), who called on conservatives to “step up and to acknowledge the reality of this problem and propose their own set of solutions.”
One prominent Republican stayed mum, however — a spokesman for Speaker John Boehner, a devout Catholic, offered no comment on the encyclical beyond saying the Ohioan is likely to be asked about it today at his weekly press briefing.
EPA’S RFS CHECKUP: The battle over biofuels mandates hits the Senate Homeland Security and Government Affairs Committee today, as its regulatory affairs subpanel hosts acting assistant EPA air Administrator Janet McCabe for a look at the agency’s management of the Renewable Fuel Standard. Subpanel Chairman James Lankford (R-Okla.), a long-standing critic of the RFS dating back to his time in the House, is expected to question whether the EPA will continue to miss the volume mandate deadlines set by Congress. Ranking member Heidi Heitkamp (D-N.D.), for her part, rapped the EPA last month for finalizing biofuels targets below the levels set by law.
McCabe has defended the proposals as reflecting “real-world circumstances,” including the slower-than-expected growth in cellulosic biofuels development, weaker gasoline demand and bottlenecks in supplying additional ethanol to consumers. The EPA didn’t release her testimony ahead of the hearing.
If you go: The hearing will take place at 9 a.m. in 342 Dirksen. Watch it here: http://1.usa.gov/1QJGKyr
BIOFUELS BRIEFING: Ethanol eventfulness continues later today, as the Iowa Renewable Fuels Association hosts a briefing about the importance of biofuels and other energy policy issues to the 2016 caucuses in the Hawkeye State. Sen. Joni Ernst (R-Iowa) is set to appear, with pollster Ed Goeas and TheIowaRepublican.com releasing the results of surveys on how Iowa caucus-goers and general election voters view the EPA’s RFS, as well as other issues. The action starts at 2 p.m. in Minuteman Ballroom A at 1 Constitution Avenue NE.
WELCOME TO THURSDAY’S MORNING ENERGY. I’m Elana Schor, filling in this week as your guide to the day’s top energy and environmental news. Please join me in welcoming two new members to our team in the coming days, Deputy Editor Nick Juliano (@nickjuliano) and your future full-time ME host, Eric Wolff (@ericwolff).
And in the meantime, give me a hand by sending your tips, energy news and commentary to eschor@politico.com, and follow us on Twitter @eschor, @Morning_Energy and @POLITICOPro.
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INSIDE TODAY’S FERC MEETING: The fight over offshore wind has made its way to FERC. Retired Navy captain and Newport, R.I., resident Benjamin Riggs — who also happens to oppose Cape Wind — has challenged a power purchase agreement between the developer of the 30-megawatt Block Island Wind Farm and the utility National Grid. He argues that state regulators’ 2010 approval of the PPA violates the Federal Power Act, the Public Utility Regulatory Policies Act, and the Constitution’s Supremacy Clause.
Second time’s the charm? FERC in 2012 tossed out a similar complaint from Riggs, but he argues there is new precedent to bolster his argument. Riggs points to a recent ruling out of the 4th Circuit Court of Appeals regarding a Maryland program meant to promote and subsidize new power plants in the state, which the court said violated federal jurisdiction. (That case, and a similar one out of New Jersey, are pending appeal before the Supreme Court.) The utility and developer point out that Riggs did not file a lawsuit in court, as he could have done after FERC rejected his argument in 2012, and argue that the circumstances have not changed.
Also today: The commissioners may also weigh in on a $650 million dispute between New York utility Consolidated Edison and PJM Interconnection. ConEd argues that PJM wrongly overcharged some $650 million to the utility over two PSEG transmission projects in northern New Jersey. FERC will also take up a handful of reliability standards proposed by the North American Electric Reliability Corp. The meeting starts at 10 a.m. at FERC HQ: 888 First St. NE. Webcast: http://bit.ly/1vU2yyB
Went down to the demonstration: FERC moved its May meeting up a week to avoid activists’ plans to protest, but this time several protesters plan to sleep under the stars so they could attend today’s meeting. The activists allege that FERC essentially is a rubber stamp for the gas industry and argue that its approval of gas pipeline and export projects harms local residents and the climate. FERC last month prevented many activists from being in the room during the meeting, putting them in another room to watch via webcast. But at least a couple of protesters got through, and more may do so this time. If you’re attending, get there early; security likely will take extra time.
A note on Moeller: Today’s meeting is technically the last one of Commissioner Philip Moeller’s term, which ends on June 30, but don’t expect him to depart quite yet. Moeller, a Republican, announced in May that he would not stay on for a third spin at FERC, but the commission’s rules allow him to stick around until as late as December, unless a successor is confirmed. The White House has not yet named a replacement, though Senate Energy and Natural Resources Committee Republicans’ chief counsel, Pat McCormick, is the rumored name.
LIKE THE WIND AT DOUBLE SPEED: The 20 members of Congress who have co-sponsored a proposal to end the production tax credit for wind power are getting a letter today from 85 companies warning that “targeting one industry and making retroactive changes to existing law is misguided and runs counter to the business certainty tax reform is meant to improve.” Link to the letter, released by the American Wind Energy Association: http://bit.ly/1BjNiCh
SPREAD OUT THE OIL, THE GASOLINE: Days ago it looked like senators might have the first chance to vote on the future of the crude export ban during debate on the chamber’s defense authorization bill, but that prospect dimmed yesterday as the bill approached final passage. As of press time, an amendment from Senate Majority Whip John Cornyn (R-Texas) that initially endorsed oil exports had been modified amid Democratic objections to simply require a report on the risks posed by Russia’s role as primary oil and gas supplier to Europe. That slimmed-down version may make it into the final authorization bill as part of a manager’s package still being negotiated late Wednesday.
McCARTHY TAKES MICHIGAN: EPA chief Gina McCarthy is headed to Detroit today to tour NextEnergy, an advanced energy technology company, and its NextHome project. Billed as a “living lab,” the facility is powered by direct current and allows a homeowner to choose power sources by market price.
IT’S A GAS, GAS, GAS (LOSS): The environmental watchdog Center for Western Priorities releases a report today that seeks to tally lost royalties from oil and gas produced on public lands in the West, ahead of the Friday end to a public comment period on the Interior Department’s nascent effort to raise those rates. Their final annual loss estimate was between $490 million and $730 million annually. Check out the full report: http://bit.ly/1R9KkSH
SEEKING NEW RESOLUTION TO RESOLUTION MINE: When the final version of last year’s defense authorization bill got its late-night release in December, Democrats and greens decried the inclusion of language approving an Arizona land swap that would allow the U.K.-based mining giants Rio Tinto and BHP Billiton to advance their Resolution copper mine. But three Republicans are among the 14 co-sponsors of a bill Rep. Raul Grijalva (D-Ariz.) proposed Wednesday to reverse the swap — Reps. Markwayne Mullin (Okla.), Walter Jones (N.C.), and Tom Cole (Okla.).
Sen. John McCain (R-Ariz.), who helped push through the Resolution provision, responded in a statement that the land swap, contrary to its portrayals by opponents, “was a bipartisan compromise hashed out through 10 years of debate and public testimony in Congress.”
GAO DINGS AGENCIES ON ESPC OVERSIGHT: The Government Accountability Office says federal agencies could beef up their oversight of energy savings performance contracts, through which the government gets private companies to finance up-front costs of efficiency improvements and then repays that from the savings. After reviewing 20 projects at seven agencies, GAO concluded that many of them overstated the energy savings because the contractors did not take into account changes in what equipment agencies used. GAO pinged the seven agencies — including DOE, several military services and the General Services Administration — for “limited oversight and evaluation of their ESPC projects” because in some instances, “they were unaware of these duties or how to perform them.” GAO: http://1.usa.gov/1QEJvpU
QUICK HITS
One day after completing an expansion of a big Canadian oil sands project ahead of schedule, an Exxon subsidiary delays its next phase. Reuters: http://reut.rs/1GPvWxg
Jeb Bush, one day after appearing to dismiss the papal encyclical, calls for “a consensus on how to approach” climate change. NYT: http://nyti.ms/1Rb6yDQ
The head of Russia’s top oil producer says the U.S. is the new OPEC. Reuters: http://reut.rs/1IlHwNv
Tags: energy, fuel, gas, oil