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COAL CRUSHES THE COMPETITION AMID COLD SNAP: The 2018 deep freeze has made coal the leading provider of electricity for heating in the East. Coal beat out every other form of power plant in the federally overseen PJM electricity market, which comprises 13 states from Illinois to the District of Columbia.
Coal brings in the new year: Coal provided about 47,000 megawatts of electricity on Saturday, while its rival natural gas provided around 21,000 MW and nuclear power around 35,000 megawatts, according to PJM market reports. Wind is pumping out the electrons, but its total output was about 3,000 megawatts.
One megawatt of electricity can provide 750-1,200 homes with power, depending on how much demand there is on the system, according to experts.
Oil plants surge: On Tuesday morning, oil-fired power plants surged to a record high of over 10,000 megawatts. Natural gas plants also crested above 30,000 megawatts, while coal was continuing at just over 47,000.
Production rise: Adding to the administration's support for the coal industry, new federal data released Thursday showed that coal ended on a high note during the last week of 2017.
Coal production for the year totaled 760.4 million short tons, which is 6.4 percent higher than a year ago, according to the Energy Information Administration's last weekly coal report for 2017. The agency is the Energy Department's statistical and analytical arm.
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ENERGY INDUSTRY BEGINS FEELING ITS WAY THROUGH TRUMP’S TAX LAW: Big oil companies are finding that the tax code overhaul signed by President Trump before Christmas likely will bring short-term pain, but long-term gain. Meanwhile, the power industry is reviewing the legislation to figure out how it will affect them and their customers.
Pay to play: BP said it expects good things from the new tax law for U.S. earnings, but first it had to cough up $1.5 billion in payments to the federal government as part of President Trump’s corporate tax relief.
The $1.5 billion charge was a result of the lower corporate tax rate affecting its deferred tax assets and liabilities, which led to the one-off charge in its fourth-quarter earnings to be announced next month, according to Reuters.
Sifting through: BP said the “ultimate impact” of the tax changes is complex, which the company must still review. Its decision to pay an up-front charge on its fourth-quarter earnings follows a similar decision by Shell.
Electric companies ordered to report benefits: But the oil sector is not alone in responding to the tax bill. A growing number of state electricity regulators are ordering major electric utilities, some of which are the largest companies in the U.S., to give them an immediate report on how the tax law will affect their bottom lines, which will affect commercial and residential electric customers.
State electricity regulators from Kentucky, Michigan, and Montana issued orders to the utility companies they oversee on Dec. 27, according to S&P Global.
The Kentucky Public Service Commission told utilities that any discount must be passed through as a discount for electricity consumers.
What about the feds? The Federal Energy Regulatory Commission, the federal counterpart to the state regulators, likely will have to examine the tax bill’s influence in utility investment and consumers. FERC oversees how utilities function in the wholesale electric markets it oversees, leaving the retail market to the states. That means the effects of the tax bill on transmission utilities across the vast interstate markets are within the commission’s purview.
Silence, so far: However, as of Tuesday, the commission has been silent on the impact of the tax plan. The next public meeting where the tax bill could come up is on Jan. 18.
Tax relief and Perry’s grid gambit: FERC is also expected to make a decision by Jan. 10 on Energy Secretary Rick Perry’s proposal to provide market-based incentives to ensure coal and nuclear power plants are rewarded for keeping the grid from going dark during harsh weather.
The Trump tax discounts to coal and nuclear utilities could have an impact on Perry’s proposal. If it’s found that electric prices would be lower due to the tax relief provided to power plant owners, and hence providing the incentives would not harm consumers, there could be an argument made to approve the Perry proposal.
EARTH’S FUTURE IS A DESERT WITHOUT PARIS, SCIENTISTS SAY: Climate researchers are warning that a large chunk of the globe could become a desert if the goals of the Paris climate change accord are not met.
The findings published Monday in the journal Nature Climate Change show that more than 25 percent of the world's population will live in a perpetual state of drought and growing desertification if the Earth's temperature rises by 2 degrees Celsius by 2050.
Preventing catastrophe: The report says the solution is to prevent global warming from rising above 1.5 degrees C, which the researchers say would significantly reduce the number of regions of the world affected by "aridification," or the drying of the planet.
Global warming, meet global dryness: “Our research predicts that aridification would emerge over about 20-30 percent of the world’s land surface by the time the global mean temperature change reaches 2ºC," said Manoj Joshi, lead researcher from the University of East Anglia in the United Kingdom. "But two-thirds of the affected regions could avoid significant aridification if warming is limited to 1.5º C.”
Where the Paris deal fits in: That's where the Paris climate change agreement kicks in, because it calls for countries to reduce greenhouse gases from fossil fuel use to keep from reaching 2 degrees Celsius. Most climate scientists blame greenhouse gases from the burning of fossil fuels for causing manmade climate change.
PUERTO RICO BLACKOUT SPARKS INTEREST IN SOLAR: Energy industry leaders say the island’s bountiful sunlight could facilitate a transition to an electricity system more reliant on solar power, especially if it’s paired with battery storage that can provide backup when the sun isn’t shining.
Steal my sunshine: Several companies have already provided renewable solutions on an emergency basis. Tesla installed a solar field and batteries to a children’s hospital in San Juan. Sonnen, a German company, is installing solar and storage systems at emergency centers.
And researchers at the University of Washington’s Clean Energy Institute, relying on donations, traveled to a remote mountain municipality called Jayuya to build solar-powered refrigerators in a community center.
Bigger plans: Puerto Rico Gov. Ricardo Rossello and New York Gov. Andrew Cuomo, meanwhile, recently released a $17.6 billion grid restoration plan produced by a group of utility companies they formed. The Puerto Rico Energy Resilience Working Group proposes rebuilding the island’s grid with renewables and distributed energy resource technologies such as micro-grids and battery storage.
Separately, the Puerto Rico Energy Commission, the energy authority that regulates PREPA, recently asked for ideas about how to rebuild the grid.
Mini me: AES, a global electricity provider that already is present in Puerto Rico, offered a plan that would establish a network of solar-powered “mini-grids” backed up by battery storage.
AES estimates its plan can be paid for just by 10 years of savings from depending less on fuel imports.
TRUMP STARTS ROLLBACK OF OFFSHORE DRILLING RULES: The Trump administration did not rest during the holidays, as last week it began dismantling safety rules created after the Deepwater Horizon offshore oil rig disaster in the Gulf of Mexico.
The Interior Department's Bureau of Safety and Environmental Enforcement, which regulates offshore oil and natural gas drilling, says its proposed changes to the rules are intended to reduce “unnecessary burden” on the energy industry and would save $228 million over 10 years without compromising safety.
No more third parties: Among the proposed changes, BSEE would eliminate a provision requiring third-party inspectors of certain safety equipment — such as a blowout preventer device — be certified by the bureau.
The blowout preventer device broke at the bottom of the sea in the Deepwater Horizon incident, spewing almost 4 million barrels of crude oil into the Gulf of Mexico.
INTERIOR DEPARTMENT REPEALS OBAMA FRACKING RULE: The Interior Department last week officially repealed the Obama administration’s 2015 fracking rule regulating oil and natural gas drilling on federal lands.
Rule breaker: The Obama-era rule targets the practice of hydraulic fracturing, or fracking, which has made the U.S. the world’s leading producer of energy. The rule is intended to increase the safety of fracking by reducing the risk of water contamination. It would have forced companies to comply with federal safety standards in the construction of fracking wells and to disclose which chemicals they used in the fracking process.
Winners and losers: Killing the rule has been a top priority of the oil and natural gas industry, as well as Republican lawmakers from Western states.
Environmental groups are expected to sue the agency after the rule is finalized, adding to the list of Trump administration actions going to court in the new year.
BISHOP SAYS CONGRESS MUST CEMENT TRUMP’S PUBLIC LANDS AGENDA: In case you missed it, the Washington Examiner interviewed Rep. Rob Bishop, R-Utah, chairman of the House Natural Resources Committee, before the holiday break.
Bishop, in a wide-ranging Q&A, said he's thrilled to finally be working with a president who supports the idea of returning the control of federal land to states and localities.
He said Congress needs to work quickly to make sure Trump's decisions to roll back national monument designations are locked into place, so a future president can't reverse those moves.
Congress to provide ‘finality’: "What they are doing has go to be put into some type of statutory language to actually give some finality to it," Bishop said. "Otherwise, everything Trump is doing now can be changed by the next president."
Game plan: Bishop also weighed in on the prospects for Antiquities Act reform this year, his effort to rollback the Endangered Species Act, and the power grid restoration effort in Puerto Rico.
Read it all, here.
New York Times Fighting climate change, one laundry load at a time
Reuters Oil posts strongest Jan. 1 opening since 2014 as Iran unrest pushes up crude
Bloomberg Oil's dream to grow in plastics dims as coke turns to plants
Forbes Despite efforts to trip it up, new energy economy remains on sound footing
Post and Courier Golf, beaches and power: How utilities wine and dine the public officials that set your rates
New Yorker The dark bounty of Texas oil: Will the booms and busts of the energy industry always dominate the state?
TUESDAY, JAN. 2
8:15 p.m., Ventura, Calif. Department of Homeland Security Secretary Kirstjen Nielsen will participate in a press conference on the Thomas Fire. The press conference also will be attended by Regional Administrator for the Federal Emergency Management Agency Region IX Robert J. Fenton Jr. and California Governor’s Office of Emergency Services Director Mark Ghilarducci.
WEDNESDAY, JAN. 3
TUESDAY, JAN. 9
Noon, 1300 Pennsylvania Ave. The American Petroleum Institute President and CEO Jack Gerard delivers the 2018 “State of American Energy” event, previewing the U.S. oil and natural gas industry’s top priorities for the year ahead.