- Wall Street Journal: Another round of cost-cutting looming for oil, gas industry
- Morning Consult: The Strategic Petroleum Reserve: Congress’s New Piggy Bank?
- National Journal: Can Congress Break the Energy-Legislation Curse?
POLITICO Morning Energy for 7/16/2015
By DARIUS DIXON, with help from Alex Guillén, Darren Goode and Heather Caygle
ALL ROADS LEAD TO THE SPR, APPARENTLY: Funding for the nation’s crumbling roads and highways is about to run out in two weeks, and Congress is in disarray on how to prevent it, report POLITICO’s Seung Min Kim and Pro Transportation’s Heather Caygle. But one of the options they’re looking at is this season’s popular ATM: The Strategic Petroleum Reserve. Seung Min and Heather have more: http://politico.pro/1J1prJ6.
Since diving into the federal employee retirement plans is a non-starter with Democrats, some of the pay-fors being kicked around by Senate leaders include a $7 billion sell-off of the SPR, and $1.6 billion from the Oil Spill Liability Trust Fund. Energy readers will recall that just last week the House gave veto-proof support to the 21st Century Cures Act, an FDA bill selling off 64 million barrels of oil from the Strategic Petroleum Reserve over eight years in to order to raise a $5.2 billion offset. Energy Secretary Ernest Moniz and others in the Obama administration have raised concerns about the sales. While the White House criticized the bill, it didn’t issue a veto threat. Senate Energy and Natural Resources Chairwoman Lisa Murkowski has also cautioned that the petroleum reserve “is not a piggy bank.”
CROSSING THE STREAMS: The Interior Department could release its proposed stream buffer zone rule as early as today, a major coal mining and clean water regulation, according to two environmental sources. The rule has been under review at the White House Office of Management and Budget since March. Interior declined to comment on a release timeframe. Environmental groups hope the rule will further restrict coal mining; it updates a 1983 regulation that governs how close mountaintop removal coal mining can get to waterways. Republicans have spent years criticizing the plan to update the rule as part of the Obama administration’s so-called “war on coal” ever since documents leaked from an early rewrite indicated that thousands of coal mining jobs could be lost because of the rule. But Joseph Pizarchik, the director of Interior’s Office of Surface Mining, told lawmakers earlier this year that the proposed rule “would probably be a wash” on coal jobs. A rewrite issued by the George W. Bush administration in 2008 never went into full effect and ultimately was tossed out by a federal judge last year for violating the Endangered Species Act.
Unsolicited consideration: Given how controversial the rule is, experience tells us that we should assign a non-zero probability to the White House releasing this on Friday — right when you consider going home early for the day.
MUST BE COLD BECAUSE THEY’RE ALL BUNDLED UP: Of the three presidential campaigns that had enough bundler fundraising to require reporting to the FEC, Hillary Clinton was the clear winner, including in energy-related bundler money. Cheniere Energy Vice President Ankit Desai raised $82,000 for Clinton, while Brian Wolff, executive vice president at the Edison Electric Institute, wrangled $26,600 and ExxonMobil executive Theresa Mary Fariello raised $21,200. A few lobbyists with energy clients made Clinton’s list as well, including FTI’s Jackson Dunn, who represents Noble Energy and Dow Chemical, and raised $231,554. Heather Podesta, whose clients include Fuels America, Marathon Oil and Bill Koch’s Oxbow Carbon, raised $31,150, and Tony Podesta, who lobbies for BP and SolarReserve, gathered $74,575.
The GOP side: Jeb Bush’s bundler report doesn’t have any energy executives, but his list does include lobbyist Richard Hohlt, whose clients include Chevron and Pinnacle West Capital. Hohlt raised $27,000 for Bush. And Marco Rubio’s bundler list included $21,000 via Geoff Verhoff of Akin Gump, whose clients include VNG.co, a compressed natural gas fueling infrastructure company.
In case you were wondering: ME’s review of Donald Trump’s report showed no energy-related contributions.
HAPPY HOW-IS-IT-NOT-YET-FRIDAY?-DAY! I’m Darius Dixon and even if you’re not all that into the Pluto chatter of the last few days, I think xkcd handled it in a way that everyone can enjoy: http://xkcd.com/1551/. Send your energy news, tips, and commentary all week to ddixon@politico.com, and follow us on Twitter @dariusss, @Morning_Energy and @POLITICOPro.
NRC NOM NOM NOM: President Barack Obama intends to nominate Jessie Roberson to fill the remaining leadership seat on the Nuclear Regulatory Commission, the White House announced late Wednesday afternoon. Roberson has been vice chair of the Defense Nuclear Facilities Safety Board since 2010 and was the Energy Department’s assistant secretary for environmental management from 2001 to 2004, overseeing nuclear weapons cleanup efforts. She also has industry experience working as an environmental consultant as well as Exelon Corp.’s director of nuclear regulatory programs. If confirmed as an NRC commissioner, her term would run through June 2020.
Mind the gap: If Roberson is confirmed, it’d create the DNFSB’s third vacancy. The board only has five seats and needs three members to reach a quorum (although fewer numbers can still hold hearings). The board is responsible for providing independent analysis and safety recommendations to the Energy Secretary about nuclear weapons facilities within DOE.
MARKEY CLIMATE AMENDMENT GETS SCHOOLED: Sen. Ed Markey tried to convince his colleagues to back an amendment that would create a competitive grant program within the No Child Left Behind bill aimed at developing or improving climate science education for K-12 students. But alas, it failed 44-53. The measure would’ve made funds available for statewide programs aimed at creating or expanding climate education by way of educational materials, and teacher training. But HELP Chairman Lamar Alexander charged that the language would create a political football depending on who’s in the White House. “Based upon what we know about the U.S. Department of Education,” the Tennessee Republican said, “as soon as we authorize it, it’ll begin to write regulations defining what we mean by climate change … Just imagine what the curriculum on climate change would be if we shifted from President Obama to President Cruz, and then back to President Sanders, and then to President Trump.” He noted his opposition “as a Republican who believes climate change is a problem and that human activity is a major contributor to that problem.” The grant program amendment: http://politico.pro/1JjB3mI. Markey also filed a second amendment to the bill that is a Sense of the Senate about the importance of teaching climate science: http://politico.pro/1V6lRlK
CAUTIOUS SENATE OPTIMISM: Senate Energy and Natural Resources Chairwoman Lisa Murkowski told reporters Wednesday that she and her Democratic counterpart Sen. Maria Cantwell are making headway on the “small handful of outstanding issues” holding up a wide-ranging energy package and that she is “hoping for a markup next week.” Cantwell, on the other hand, cooled some of the optimistic predictions that a draft would be released this week and kickoff panel action next week. “I think you could see something next week,” she told ME about draft text. She said “maybe” there would be markups starting next week, a schedule that would be “ambitious.” She added: “While I don’t know if anybody will be wowed by the bill, there’s lots of good things in there that are very essential to moving forward on a clean energy economy,” she said. “And I think there’s good bipartisan support for those things.”
** A message from The Pew Charitable Trusts: This is our last chance to protect the sage-grouse and our Western way of life. The Bureau of Land Management must include strong science-based protections in final plans for sagebrush habitat that supports wildlife like sage-grouse, elk, pronghorn, and golden eagles. Let’s keep our Western landscapes iconic: www.pewtrusts.org/sage-grouse. **
THE GOP’S BACKFIT BACKSLAP: Environment and Public Works Chairman Jim Inhofe has set his sights on two NRC post-Fukushima safety regulations as examples of where the agency’s staff shows its “growing proclivity” for justifying rules with qualitative information rather than strictly data-driven analysis. In a letter to NRC Chairman Stephen Burns, Inhofe and eight other Senate Republicans targeted elements of the ongoing mitigating strategies and filtered vents rulemakings that agency staff has recommended be imposed in part without solid number-crunching. Mitigating strategies has become one of the NRC’s most comprehensive safety packages after the 2011 Japanese nuclear disaster. But a section of the draft proposed rule the commission is now looking over includes a staff recommendation to turn a voluntary industry initiative into a requirement where procedures be maintained to protect the reactor core and continue cooling if fuel is damaged. This was a point of contention between commissioners, industry and the Union of Concerned Scientists at an NRC briefing a week ago (http://politico.pro/1J1tZzq).
Ok, brace yourself for some wonk-ese. After Fukushima, the NRC found that while the vast majority of plants had so-called SAMGs procedures readily accessible, it didn’t mean that employees were regularly drilled on them. Still, the nuclear industry updated those guidelines following the Japanese accident, but NRC staff want to be able to require the extra layer of drills and training. What Republicans have seized on is the way the NRC staff is seeking to justify the requirement, a requirement that even the staff notes — on a purely data-driven basis — would be of “minimal benefit to public health and safety.” Staff argues that because available quantitative information “is not a complete measure” of the safety benefits, they relied on quantitative and qualitative reasons to say that SAMG requirements “would result in a substantial additional protection for public health and safety.” NRC staff also made a similar argument around filtration systems more than two years ago, which would require vents on certain reactor types to handle elevated pressures, temperatures and radiation levels from a damaged reactor. Meanwhile, Inhofe and others argue that a leadership decision at the NRC to sign off on these qualitative arguments would be “precedent-setting” and “severely limit the Commission’s ability to limit the imposition of future proposals that are not safety significant.” They also want answers to several questions by the end of the month. The GOP letter: http://1.usa.gov/1V5p5WS
So long as it ends up in the right place: EPW Republicans write to EPA Administrator Gina McCarthy so enough that they forgot to take her name off the committee stationary when they wrote to Burns at the NRC. At the top of pages 2 through 8, “Administrator McCarthy” is indicated as the recipient.
OIRA CHIEF SIDESTEPS CO-BENEFITS DEBATE: The White House’s top regulatory overseer Wednesday side-stepped saying whether EPA and other agencies should be able to use co-benefits to justify regulations. Several Republicans at a House Judiciary subcommittee hearing pressed Office of Information and Regulatory Affairs Administrator Howard Shelanski to account for the practice, particularly in light of the Supreme Court ruling on the Mercury and Air Toxics Standard that relied on billions of dollars in benefits from the coincidental reduction of particulate matter. Shelanski said that OIRA ensures that rules are “well-tailored” to their stated purpose — for example, reducing mercury emissions. From there, co-benefits — like reduced PM — are calculated and incorporated into the rule’s justification. He did not address subcommittee chairman Tom Marino’s request that he re-evaluate that practice.
— The Supreme Court’s MATS ruling pointedly did not decide whether EPA can or should include co-benefits in its regulatory justifications. The practice has been in use for many decades, but some see an opening at the Supreme Court to discount co-benefits, which would make regulations like MATS more difficult to issue. Subcommittee Chairman Tom Marino noted the Chief Justice John Roberts wondered during oral arguments in the MATS case whether such disproportionate co-benefits are “an illegitimate way of avoiding the different … limitations on EPA that apply in the criteria program.”
Group presses for faster OIRA reviews: Public Citizen has launched a website to put pressure on OIRA and the Office of Management and Budget to complete its reviews of regulations within a 90-to-120 day timeline instituted by executive order. The site tracks regulations that have been under review for long past the deadlines — including a pipeline safety rule and a rule on non-federal oil and gas rights. And in case you were wondering, Wednesday marked 120 days precisely of OMB review for Interior’s stream rule. http://safeguardsdelayed.org/
LET’S TSCA TIMELINES, SHALL WE? It looks like the Udall-Vitter bill updating the 1976 Toxic Substances Control Act could reach the Senate floor as early as the first week in August, aides said, as the last gasp of action in the upper chamber before lawmakers leave for the long recess. Unless it gets bumped to September by cybersecurity legislation, that is. Debate on a highway bill is tentatively set to be on the Senate floor for two weeks starting next week. The House will be leaving at the end of July but they’ve already passed their own TSCA bill and don’t officially need to hang around to see what the Senate does ahead of bicameral talks.
BISHOP REQUESTS GAO REVIEW FOR NEPA COMPLIANCE: House Natural Resources Chairman Rob Bishop wants the GAO to investigate whether Office of Surface Mining has complied with the National Environmental Policy Act in writing the stream rule. Bishop is seizing on longtime complaints from the nine states treated as participating agencies in writing the rule. From February through last week, eight of those states have pulled out formally, citing a lack of communication from OSM since 2011 on the rulemaking process. Bishop and other GOP opponents of the rule argue that the freeze amounts to a NEPA violation, a charge OSM chief Joseph Pizarchik has previously rejected. Bishop’s letter to GAO: http://1.usa.gov/1I3Dm2H
TODAY’S FERC MEETING: This morning’s FERC meeting doesn’t look like we’re in for a nail-biter. The only eyebrow-raising item on the agenda is possible commission action on updated cybersecurity, or Critical Infrastructure Protection — or CIP — standards filed by the North American Electric Reliability Corp. in February. FERC approved the most recent iteration of the standards nearly two years ago, which go into effect in April, but regulators also directed NERC to make several modifications and FERC may approve, disapprove the revisions or ask for other changes. The agency may also take action on proposals seeking to improve scheduling between the natural gas and electric industries given the increased reliance on natural gas-fired power. This may be your host’s first trip back to FERC since October. Of course, there could always be more protestors … The meeting starts 10 a.m. at FERC HQ.
Programming note: Recall that FERC doesn’t hold a monthly meeting in August. Those dockets must be too hot.
ME-A CULPA: Your morning host slipped up in an item Wednesday about a new power purchase agreement announced by D.C. Mayor Muriel Bowser. The 20-year deal power drawn from a 46-megawatt wind farm would provide D.C. government buildings with about 35 percent of their electricity needs — not D.C. as a whole. Sorry ‘bout that.
QUICK HITS
— Investors Get Caught in Oil’s Slippery Wake. The Wall Street Journal: http://on.wsj.com/1K9cheI
— ExxonMobil gave millions to climate-denying lawmakers despite pledge. The Guardian: http://bit.ly/1Difd0R
— New York Mayor Bill de Blasio to Give Climate-Change Speech at Vatican. The Wall Street Journal: http://on.wsj.com/1M77vOm
— Group attempts to undercut solar initiative with rival amendment. The Miami Herald: http://hrld.us/1MbJPJq
Tags: energy, fuel, gas, oil