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WAR HEATS UP OVER ETHANOL: The big ethanol conference in San Antonio heated up Monday night with refiners and the largest steel union sparring over comments made by the corn fuel’s largest lobbying group.

“Philadelphia Energy Solutions and the United Steelworkers are appalled that the Renewable Fuels Association has launched a dishonest campaign, fabricating ‘facts’ about PES’s business and mocking the livelihoods of thousands of manufacturing workers in refineries across America,” read a joint statement by Gregory Gatta, the CEO of Philadelphia Energy Solutions, the largest refiner on the East Coast, and the head of the steel union, Leo Gerard.

• It’s not easy being miffed: The two are miffed over the ethanol group’s claims that Philadelphia Energy had to file for bankruptcy protection recently because of poor business choices, not because of costs imposed by the ethanol mandate.

“The facts are this: PES is a solid business providing energy security for America and employment for 1,100 dedicated refinery workers who every day help power homes, businesses and transportation throughout the Northeast United States,” the statement added.

• Who’s at fault? The two top officials are trying to show that the Renewable Fuels Association, which is holding its conference, is the bad guy in the fight over the Renewable Fuel Standard.

“Unlike the RFA’s denigration of the value of American refinery workers, we are not fighting against ethanol or other biofuel producers, farmers and the many Americans they employ,” the two officials say in the statement. “In fact, PES consistently blends as much ethanol and other biofuels as its customers will allow.”

The refinery and steelworkers say they want to fix the part of the ethanol mandate they view as “flawed and indefensible,” which is the mechanism that forces them to buy expensive renewable identification number credits, or RINs, to meet the standard without being fined by the Environmental Protection Agency.  The RIN requirement “is destroying the independent merchant refining industry and the thousands of families sustained by it,” the statement said. “PES and the USW believe we can all participate in the energy market on an even playing field.

REVENGE OF THE ‘PHANTOM FUEL’ TAX: Meanwhile, the lead lobbying group for refiners formally petitioned the EPA to waive requirements to blend advanced cellulosic ethanol into the nation’s gasoline supply, calling the fuel “non-existent” and making them subject to a “phantom” tax.

“Year after year, the cellulosic biofuel industry fails to produce the volumes mandated under the RFS, forcing refiners to pay a de facto phantom fuel tax to comply with EPA’s unrealistic predictions,” said Rich Moskowitz, general counsel for the American Fuel and Petrochemical Manufacturers. “Refiners should not be penalized for the cellulosic biofuel industry’s deficiency, and EPA must take action to adjust these unrealistic volume mandates.”

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TRUMP GUTS OBAMA-ERA METHANE RULES FOR FRACKING: The Interior Department on Monday proposed a revised version of Obama-era methane rules that favors President Trump's "energy dominance" agenda over duplicative and punishing regulations, according to the Interior Department's land management regulator.

• Goodbye ‘punitive’ rules: “In order to achieve energy dominance through responsible energy production, we need smart regulations, not punitive regulations,” said Joe Balash, assistant secretary for land and minerals management.

“We believe this proposed rule strikes that balance and will allow job growth in rural America,” he said.

The Obama administration in 2016 imposed strict regulations on oil and natural gas drillers that the Trump administration saw as duplicative with other federal regulations and state requirements that also regulated methane emissions.

• Part of the climate action plan: Methane is a potent greenhouse gas blamed by most climate scientists for causing climate change. The 2016 regulations were part of former President Barack Obama's plan to battle the warming of the earth.

U.S. FRACKING COULD BRING ANOTHER OIL GLUT: The global oil supply is expected to overtake demand this year, sparked by U.S. shale production, posing another oil glut and era of low prices, according to a new International Energy Agency report released Tuesday morning.

• Looks familiar: The IEA said the climate is “reminiscent of the first wave of U.S. shale growth” earlier this decade, which overwhelmed the market and caused prices to fall.

The surge in U.S. production, helped by companies that have cut their drilling costs, threatens the agreement by OPEC nations and Russia to curtail supply to raise crude prices.

“Today, having cut costs dramatically, U.S. producers are enjoying a second wave of growth so extraordinary that in 2018 their increase in liquids production could equal global demand growth,” the IEA said.

• Moving on up: U.S. crude production in January rose by 1.3 million barrels a day from a year earlier.

American oil output reached 10 million barrels per day in November for the first time since 1970.

The IEA expects U.S. production to overtake Saudi Arabia soon. “By the end of this year, it might also overtake Russia to become the global leader,” the agency said.

FERC CHAIRMAN SEEKS TO OVERCOME ‘RUBBER STAMP’ LABEL IN PIPELINE REVIEW: Federal Energy Regulatory Commission Chairman Kevin McIntyre told state utility commissioners Tuesday morning that he is bothered by the “rubber stamp” label given to the commission by critics and is seeking changes to the panel’s pipeline review system.

“One phrase that bothers me at my tenure at FERC is the term 'rubber stamp.'" McIntyre said at the National Association of Regulatory Utility Commissioners’ Winter Policy Summit. "It fails to recognize the excellent work done by the commission and staff over many many years to ensure adequate and careful review of pipeline projects.”

• ‘Fresh look’: FERC announced in December it would take a “fresh look” at the way it approves natural gas pipelines amid growing clashes between environmental groups and the agency over climate change.

The pipeline review will examine its 1999 policy statement on how it issues permits for new interstate natural gas pipelines.

• Infrastructure ‘need’: McIntyre, a Republican appointed by Trump, did not provide a timeline for FERC’s pipeline review, but said there is “no argument about whether we need additional energy infrastructure at some level and in some areas."

"Adequate infrastructure is needed not just for our grid and pipeline system, but for our consumers,” he said.

GRID STUDY NOT ABOUT ‘BAILOUTS’: McIntyre also urged regional grid operators to not get “hung up” on the concept of “bailouts” as they review the reliability and resilience of their markets.

FERC rejected Energy Secretary Rick Perry’s proposal to subsidize struggling coal and nuclear plants, but issued an order requiring grid operators to study whether their markets have reliability and resilience problems as the power system transitions to using more natural gas and renewables.

McIntyre says Perry’s order was misunderstood, but vowed any proposed solutions will maintain “robust, competitive markets.”

• ‘Valid concern’: He defended Perry for proposing the controversial measure, saying he was right to highlight the “long-term resilience” of the power grid.

"Who can argue with that was a completely valid concern?” McIntyre said. “It was a completely valid concern."

The FERC chairman said the commission, which is independent, and the Energy Department have a “strong and robust” relationship.

PERRY BEEFS UP NUCLEAR WEAPONS SPENDING OVER RENEWABLES IN BUDGET: The Energy Department's $30.6 billion budget request for fiscal 2019 would beef up the agency's nuclear weapons role, while gutting the renewable energy office in favor of fossil fuels and nuclear power.

Perry said the budget looks to advance Trump’s "long-term goal of energy dominance," while prioritizing the agency's "national security responsibilities ... by calling for increased funding to modernize our nuclear security enterprise and strengthen the cybersecurity of our energy infrastructure."

DOE becoming Pentagon’s little brother: Perry emphasized that the "two areas are critical to America’s long-term national security” and follow the policy direction laid out in Trump's Nuclear Posture Review issued last week. The budget provides a $2 billion boost from the fiscal 2018 budget request.

Nearly half of the agency's budget, $15.1 billion, would be directed "to modernize and restore the nuclear security enterprise aligned with the Nuclear Posture Review and National Security Strategy," according to a summary. That's about $1 billion above last year's proposal.

CANTWELL OPPOSES TRUMP’S PUSH TO PRIVATIZE ENERGY INFRASTRUCTURE: President Trump’s infrastructure plan released Monday includes a proposal to privatize several federal power transmission assets, an idea quickly rejected by a leading Democrat.

• For sale: Targets include the Bonneville Power Administration covering the Pacific Northwest, and transmission assets from the Tennessee Valley Authority, the Southwestern Power Administration, and the Western Area Power Administration.

Also pegged for sale is the Washington Aqueduct, which supplies drinking water to Washington and Northern Virginia.

• Hold your hydro: Sen. Maria Cantwell of Washington, the top Democrat on the Senate Energy and Natural Resources Committee, took special exception to selling the Bonneville Power Administration, which sells hydropower generated at federally owned dams. Ratepayers compensate the government, with interest, for Bonneville’s power and transmission systems.

Several presidents, including former President Ronald Reagan, have proposed to sell Bonneville. Congress has repeatedly rejected those proposals, Cantwell said.

• ‘Stop this bad idea’: “Selling off BPA’s transmission system and abandoning cost-based rates would raise electricity rates and throw sand in the gears of the Northwest economy,” Cantwell said. “Northwest consumers already cover the full costs, with interest, of building and operating our region’s hydropower system. I will be working with all my Pacific Northwest colleagues to once again stop this bad idea in its tracks.”

PROPOSED EPA CUTS DOVETAIL WITH TRUMP INFRASTRUCTURE PLAN: The Environmental Protection Agency fiscal 2019 budget request pairs budget cuts with White House priorities under President Trump's infrastructure blueprint.

• Not just budget cuts: It's not just about budget cuts in the proposal released by the EPA Monday, although there are plenty of those. The budget proposal, which is accompanied by a four-year EPA strategic vision document, dovetails with the administration's themes of deregulation and infrastructure development.

• A bit more giving: The budget proposal, at $6.1 billion, is slightly more giving than Trump's fiscal 2018 budget request of $5.6 billion, but not by much. The proposals both have sizable 25 percent and 31 percent spending cuts to the EPA, respectively, compared to Obama-era fiscal 2017 spending levels.

• More importantly: But more importantly, the agency's fiscal 2019 budget appears to be closely tied to Trump's plans for infrastructure development, while cutting out environmental regulations and program reviews that slow down development.

• Big changes: Big changes would come from EPA's work to eliminate requirements under the Clean Air Act and other statutory programs under the president’s “One Agency, One Permit” concept.

The concept would designate "a lead federal agency" to meet a two-year deadline of issuing a single record of decision for a major project.

INTERIOR BUDGET SEEKS TO REPAIR NATIONAL PARKS USING ENERGY REVENUE: Interior Secretary Ryan Zinke’s fiscal 2019 budget proposal calls for Congress to create a fund of up to $18 billion that would pay for repairs and maintenance to national parks and wildlife refuges.

• Mr. Fix It: The fund would be paid for by new leases for energy development on onshore and offshore federal lands. It also would finance schools under the Bureau of Indian Education.

The national park system has an $11.6 billion maintenance backlog, Zinke said, half of that involving roads.

• Dollars and cents: Overall, the Trump administration’s budget proposal would give the Interior Department $11.7 billion in funding, slightly more than the $11.6 billion it proposed for fiscal 2018. Congress never implemented the Trump administration's 2018 budget proposal.

• Policy over people: Indeed, critics noted the plan includes cutting nearly 2,000 National Park Service jobs, compared to 2017 levels, at the same time visits to national parks are at record levels.

EPA REACHES $10 MILLION SETTLEMENT WITH SHELL: Energy giant Shell agreed to install $10 million in emissions control equipment at a Louisiana chemical plant as part of a settlement Monday with the EPA and Justice Department.

The EPA, Justice Department and the Louisiana Department of Environmental Quality announced the settlement with Shell Chemical for emissions violations stemming from the company's chemical plant in Norco, La.

• The terms: The settlement will result in the elimination of more than 150 tons of excess emissions of harmful air pollutants. It resolves charges that Shell violated the Clean Air Act and state law by not properly operating flaring units to burn off excess gases.

Shell also will pay civil penalties totaling $350,000, including $87,500 to state regulators.

RUNDOWN

New York Times A nearly invisible oil spill threatens some of Asia’s richest fisheries

Bloomberg Exxon sues its antagonists in a fierce climate change lawsuit

BBC Bitcoin energy use in Iceland set to overtake homes, says local firm

CNBC European Union added almost 16 gigawatts of wind energy capacity in 2017

Associated Press O’Hare Airport gets EPA grant to reduce carbon emissions

New York Times Here are the places that struggle to meet the rules on safe drinking water

Bloomberg U.S. intelligence agencies break with Trump over climate threats

Calendar

TUESDAY, FEB. 13

9 a.m., Oklahoma City. The EPA will hold a public meeting on the proposed approval of the application submitted by Oklahoma Department of Environmental Quality to allow the Oklahoma Coal Combustion Residuals State Permit Program to operate in lieu of the federal CCR program.

epa.gov/coalash/forms/public-hearing-oklahomas-coal-combustion-residuals-permit-program-february-13-2018

All day, 999 Ninth St. NW. The National Association of Regulatory Utility Commissioners holds its annual Winter Policy Summit, Feb. 11-14.

naruc.org/winter-policy-summit/2018/

All day, San Antonio. The Renewable Fuels Association opens the National Ethanol Conference, Feb. 12-14.

nationalethanolconference.com/   

WEDNESDAY, FEB. 14

2 p.m., 1324 Longworth. The House Natural Resources Subcommittee on Water, Power and Oceans will hold an oversight hearing titled “The State of the Nation’s Water and Power Infrastructure.”

naturalresources.house.gov/calendar/eventsingle.aspx?EventID=403880  

3 p.m., 366 Dirksen. The Senate Energy and Natural Resources Committee holds a legislative hearing on nearly two dozen bills on monuments and national parks. energy.senate.gov/public/index.cfm/hearings-and-business-meetings?ID=A5C425EF-2C4C-4BF3-964F-658C9DAD71B6

THURSDAY, FEB. 15

10 a.m., 1324 Longworth. The Natural Resources Committee’s subcommittee on Oversight and Investigations will hold an oversight hearing on “The Costs of Denying Border Patrol Access: Our Environment and Security.”

naturalresources.house.gov/calendar/

2:30 p.m., 1324 Longworth. The Natural Resources Committee’s subcommittee on Federal Lands will hold a legislative hearing on five bills related to wildlife restoration.

naturalresources.house.gov/calendar/

MONDAY, FEB. 19

President’s Day. Federal government is closed.