Daily on Energy: OPEC agrees to increase oil output

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OPEC REACHES DEAL TO BOOST OIL PRODUCTION TO LOWER PRICES: OPEC on Friday reached a deal to boost oil production to lower oil prices that have more than doubled since January 2017, member countries announced after concluding a meeting in Vienna.

The oil cartel and non-member countries, including Russia, agreed to increase output by 1 million barrels per day beginning in July.

But what’s the real increase? Because the amount is measured proportionately among all members of the agreement, even those that don’t have the ability to boost production, the real increase will be about 700,000 barrels a day.

The Trump administration had pressured OPEC to boost production after 18 months of cuts because higher global oil prices have led to rising gasoline prices for U.S. drivers.

Trump chimes in: “Hope OPEC will increase output substantially. Need to keep prices down!” Trump tweeted Friday morning after OPEC announced the deal to raise production.

Trump has tweeted twice in recent weeks that oil prices are too high. He blamed OPEC and Russia’s production cut agreement that began in January 2017 to cut production by 1.8 million barrels per day to boost slumping oil prices. OPEC said countries will increase oil production gradually.

“I don’t think anyone should expect an immediate slug of crude to the market,” said Saudi Arabia Energy Minister Khalid Al Falih.

Countries struggling: Some major oil-producing countries will struggle to raise output. Iran is facing renewed oil sanctions after the U.S. withdrew from the nuclear deal with Tehran, and Venezuela is suffering from a political and financial crisis that has dramatically limited production there.

Welcome to Daily on Energy, compiled by Washington Examiner Energy and Environment Writers John Siciliano (@JohnDSiciliano) and Josh Siegel (@SiegelScribe). Email [email protected] for tips, suggestions, calendar items and anything else. If a friend sent this to you and you’d like to sign up, click here. If signing up doesn’t work, shoot us an email and we’ll add you to our list.

PRUITT GETS HIT FROM ALL SIDES OVER ETHANOL MANDATE: Environmental Protection Agency Administrator Scott Pruitt is getting hit from all sides over his handling of the nation’s ethanol mandate and the potential for major changes to the program.

It’s the economy, stupid: “We are on the verge of seeing 4 percent annualized GDP — something your detractors said would never happen,” Dan Eberhart, a Trump donor and president of Canary, one of the largest oil services firms in the country, wrote in a letter to President Trump on Thursday.

Pruitt’s repeated mistakes: But “we won’t get there if you allow your EPA Administrator to repeat the mistakes of the past by picking winners and losers via executive fiat,” Eberhart wrote.

Eberhart was protesting reports that the EPA is poised to order refiners to blend more ethanol in 2019 to make up for the agency granting “hardship” waivers to dozens of refiners to help them reduce the cost of blending ethanol in gasoline.

It worked? Sources close to the lobbying push say the eleventh-hour push to get Pruitt to back off from reallocating ethanol gallons to refiners worked. One source close to the action say the Renewable Fuel Standard requirements for 2019 are going to be proposed as soon as Friday, but without the reallocation measure attached.

Trying to confirm: Renewable fuel and ethanol supporters were attempting to confirm that the RFS would be announced Friday. Reuters had reported that EPA canceled an event in Missouri where Pruitt was planning to announce the RFS with the reallocated 1.5 billion ethanol gallons.

GREENS WARN PRUITT THAT HIS LEGAL DEFENSE FUND MAY RUN AFOUL OF ETHICS RULES: A coalition of environmental groups and others sent Pruitt a letter warning him that the legal defense fund he is setting up could be his next scandal.

Avoid more scandals: “If a legal defense fund is not carefully set up and administered, there are many ways the fund may run afoul of executive branch ethics rules,” the letter sent Thursday read. “Given the large number of ethics scandals now under investigation at the EPA, further scandals should be avoided by you and the agency.”

Inhofe’s favorite Super PAC: One of the first groups listed on the letter is American Bridge 21st Century, a Democratic Super PAC, which Sen. Jim Inhofe, R-Okla., said on Wednesday was behind a campaign to oust Pruitt.

The Steyer effect: Inhofe said billionaire Tom Steyer was to blame for the bad press, pointing out as evidence that Steyer had contributed to the Super PAC.

Who’s who of greens: Others on the letter included Campaign for Accountability, Center for Media and Democracy, Earthjustice, Environmental Defense Fund Action, Greenpeace, Friends of the Earth, Green for All, GreenLatinos, Hip Hop Caucus, League of Conservation Voters, Natural Resources Defense Council, Sierra Club, and Public Citizen, among several others.

The silent treatment: The letter points out that several Democratic senators have asked for details on his legal defense fund, but the deadline for getting back to them has passed with no reply.

MULVANEY ASKS PRUITT TO ‘STEP ASIDE’: White House Office of Management and Budget Director Mick Mulvaney may have made a Freudian slip at Thursday’s Cabinet meeting when he asked Scott Pruitt to “step aside.”

In Mick’s way: He wasn’t recommending firing the EPA chief, but rather needed room to present his proposal for streamlining the government.

The top seat: Pruitt was seated at the head of the table with a grin on his face when Mulvaney asked him politely to get out of his way.

“I’ve asked Scott to sort of step aside” to go over the proposals, Mulvaney said.

White House investigation: But there is a serious point to underscore here. Mulvaney is conducting his own investigation of Pruitt’s security and travel expenses, paying particularly close attention to the EPA’s purchase of a $43,000 soundproof booth for Pruitt’s office.

The White House says it is concerned about Pruitt’s spending and other missteps, but adds that it is awaiting the results of its investigation.

The big dozen: The EPA’s own inspector general is conducting no less than a dozen investigations into a long line of potential ethics violations by Pruitt, from spending taxpayers’ money to have a security detail go on vacation with him to Disneyland, to having staff find jobs for his wife and buy a mattress from the Trump International Hotel.

Wrap it up: A week ago, the government’s top ethics official requested that new allegations be added to the EPA inspector’s list of investigations, while simultaneously urging Inspector General Arthur Elkins to wrap up the probes soon, so the ethics office can provide the president with recommendations for disciplinary action.

August grilling: Wyoming Republican Sen. John Barrasso, chairman of the Senate Environment and Public Works Committee that oversees the EPA, expects the inspector general to release the results of the investigations by August. Barrasso has scheduled Pruitt to testify at a hearing meant to coincide with the release.

ZINKE MET WITH HALLIBURTON CHAIRMAN, REPORT SAYS: Interior Secretary Ryan Zinke had a sitdown with Halliburton Chairman David Lesar at the agency’s headquarters in Washington last August, Politico is reporting.

Lesar is involved in a major real estate deal in Zinke’s hometown of Whitefish, Mont., where a foundation that Zinke established years ago is looking to benefit through selling land for a parking lot. Zinke’s wife, Lola, is the president of the foundation.

The story’s foundation: Politico originally reported on the Zinke foundation’s link to Lesar in a June 19 story. The Interior Department is refuting that story’s assertion that Zinke remained a member after becoming Interior secretary in March 2017.

Meeting confirmed: The meeting between Lesar and Zinke was confirmed to the news group by a participant at the meeting, after records were released by House Democrats on Thursday in a letter to the inspector general.

The sword of Grijalva: Rep. Raul Grijalva of Arizona, the top Democrat on the House Natural Resources Committee, sent a letter with other top Democrats, to Interior’s inspector general, which included previously unreported emails that showed Zinke and Lesar had met on Aug. 3, 2017.

The gathering: The Grijalva-led letter showed that the meeting also included Lesar’s son John and Montana developer Casey Malmquist, who joined Zinke in his office from about 4:30 p.m. to 6 p.m.

More letters: Democrats want the inspector general to probe whether Zinke used his office for financial gain. Public Citizen also sent a letter to the inspector general requesting an investigation on similar grounds.

GREENS BLAST ‘IRONY’ OF FIRST ENERGY: “Doesn’t it seem ironic that FirstEnergy is claiming that its coal and nuclear plants are necessary for resilience — but it was FirstEnergy’s incompetence in managing the power grid that was the major cause of the 2003 Northeast blackout?” read an email from the Natural Resource Defense Council on Thursday, as it pushes back on Trump’s plan to have  the Energy Department save money-losing coal and nuclear plants at the request of the Ohio-based company.

Not the first time: “If it feels like you’ve been reading about a potential federal bailout for America’s aging and uneconomic coal and nuclear plants for a long time, you’re not wrong,” wrote Pat Remick, senior energy comms strategist for the group. “Despite a high level of opposition, one may wonder why the idea won’t die.”

Could there be a lawsuit coming? Remick sent the email to highlight Gillian Giannetti’s latest piece on the bailout plan. Giannetti is a lawyer with the Sustainable FERC Project, a group the follows electricity policy within NRDC.

PERRY TO SIGN ISRAELI ENERGY PACT: Energy Secretary Rick Perry is set to sign an agreement Monday to establish a new U.S.-Israeli joint effort to address energy, water, and engineering.

Chamber of excellence: Perry will sign the agreement with Israeli Energy Minister Yuval Steinitz at the U.S. Chamber of Commerce’s headquarters in Washington, creating the U.S.-Israel Chamber of Excellence in Energy, Engineering and Water Technology.

From Israel to Europe: After signing the agreement with the Israelis, Perry will host the European Union and members of the Three Seas Initiative for a meeting at his headquarters in Washington.  

Business ties: The meeting will discuss ways businesses “can play a role in these countries and the importance of continued trans-Atlantic cooperation to promote energy security,” according to an agency advisory. There will be opening remarks, but the discussions are closed press.

THOUSANDS TO DESCEND ON WASHINGTON FOR ENERGY CONFERENCE: More than 12,000 people are expected to arrive in Washington next week for the World Gas Conference in Washington.

Every three years: The June 25-29 conference is held every three years, and is the the world’s largest global natural gas conference. Deliberations kick off Tuesday morning with an opening ceremony featuring Perry.

U.S. energy dominance: “The United States is both the world’s largest natural gas producer and consumer, making us the ideal host for this global conversation,” said American Gas Association President and CEO Dave McCurdy.

Super fuel: “In the U.S., natural gas has boosted our economy, enhanced our national security and supported renewable energy, leading to energy-related carbon dioxide emissions hitting 25-year lows. We hope to expand that opportunity throughout the world,” he added.

McCurdy is the chairman of the conference’s organizing committee.

U.S. OIL, GAS RELEASE 60 PERCENT MORE METHANE THAN EPA ESTIMATES: The U.S. oil and natural gas industry is releasing 60 percent more methane, a potent greenhouse gas, than the EPA estimates, a report released Thursday says.

Plug the leak: The study, published in the journal Science, found that crude oil and gas operations emit more than 28 billion pounds per year of methane, mostly from oil and gas wells, but also from other parts of the supply chain, such as storage and pipeline transport.

It estimates the leak rate from the U.S. oil and gas system to be 2.3 percent, compared to the EPA estimate of 1.4 percent. That might seem like a small amount, but it represents about 13 million metric tons each year, or enough natural gas to fuel 10 million homes.

Climate impact: Methane, the main component in natural gas, is more potent than carbon dioxide because it traps more heat, although its greenhouse gas emissions are relatively short-lived in the atmosphere.

Industry cites progress: The American Petroleum Institute, the main trade group representing the oil and gas industry, responded to the study by pointing out that te industry has reduced methane emissions over time.

The group says methane emissions have fallen 14 percent since 1990, as natural gas production has increased by more than half. API also challenged the methodology of the study, saying it may have overstated emissions by focusing only on airborne pollution.

WHITE HOUSE AIMS TO GUT ARMY CORPS, MERGE WASTE CLEANUP PROGRAMS: The White House aims to move and consolidate major environmental and energy programs under a federal reorganization plan it released Thursday. Congress would have to approve any changes.

The plan would move most of the Army Corps of Engineers’ work to the departments of Interior and Transportation, while leaving its defense-related functions in the Department of Defense.

Keep it together: It would shift the Corps’ commercial navigation functions such as ports to the Transportation Department. All other activities would move to Interior, including flood and storm damage response, aquatic ecosystem restoration, and operating hydropower dams.

In a second proposal, the White House looks to merge the National Marine Fisheries Service, part of the Commerce Department, with Interior’s U.S. Fish and Wildlife Service so that the Endangered Species Act and Marine Mammal Protection Act can be administered in one agency.

Clean team-up: The Trump administration also proposes combining various environmental and hazardous waste cleanup programs. It would give more responsibility to the EPA’s Superfund program by also having the department administer Interior’s Central Hazardous Materials program and a similar program governed by the Department of Agriculture.

Fuel wars: The White House wants more consolidation in the Energy Department, too.

It calls for combining research and development programs for different energy sources — fossil fuels, nuclear, and renewables — into a single new Office of Energy Innovation.

Back to life: And finally, the White House reorganization plan would resurrect an unpopular idea to sell off the assets of many of the nation’s federally owned electric utilities from Tennessee to the Pacific Northwest.

WHITE HOUSE PLAN WOULD CENTRALIZE SECURITY FOR AGENCIES: The White House reorganization also would centralize security personnel for government agencies, assigning the U.S. Marshals Service to protect Cabinet chiefs.

“Rather than employing separate protective details with separate resources and authorities,” the plan says, “the USMS would professionalize and standardize this mission across multiple executive branch agencies.”

That effectively would mean disbanding Pruitt’s controversial and expensive 24/7 security detail, although the proposal does not explicitly refer to him.

PJM SAYS TRUMP COAL BAILOUT WOULD COST ITS CONSUMERS $3.8 BILLION: PJM Interconnection, the largest federally overseen grid operator, said Thursday that Trump’s plan to bail out coal and nuclear plants would cost customers in its region $3.8 billion.

“It is widely acknowledged that PJM’s grid is reliable, and will continue to be years into the future without government intervention,” PJM said in a five-page report defending the success of competitive power markets in keeping prices low, while producing reliable, clean electricity.

“The PJM markets can provide excellent, fuel-neutral tools to value fuel security attributes.”

HOUSE CLIMATE CHANGE CAUCUS ADDS FOUR NEW MEMBERS: The bipartisan Climate Solutions Caucus added four news members on Thursday, increasing the ranks of Republicans who say they want to combat global warming.

Matchmaker: The new additions to the the 82-member group are: Rep. Bill Posey, R-Fla., Bobby Scott, D-Va., Rep. Lynn Jenkins, R-Kan., and Rep. Stephen Lynch, D-Mass.

The group’s guidelines require every new Republican addition to be matched by a Democrat.

What it means: While the growing ranks represents progress for House Republicans on climate change, some environmental groups say the caucus has accomplished little, and is meant to provide cover for GOP members in centrist districts in states feeling the impacts of global warming.

RUNDOWN

Politico New Pruitt question: Where are his emails?

Reuters Stepping on the gas: China’s home-built fracking boom

New York Times Buses, delivery vans and garbage trucks are the electric vehicles next door

Washington Post For once, scientists found good news about West Antarctica

Reuters First new all-electric mine dumps diesel; cuts costs, pollution

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Calendar

FRIDAY, JUNE 22

Vienna. Meeting between OPEC and non-OPEC members about whether to increase crude oil production.

opec.org/opec_web/en/

MONDAY, JUNE 25  

All day, The 27th World Gas Conference in Washington June 25-29.

wgc2018.com/

1 p.m., 1615 H St. NW. The U.S. Chamber of Commerce’s U.S.-Israel Business Initiative will host Energy Secretary Rick Perry and Israeli Energy Minister Yuval Steinitz to open the newly formed U.S.-Israel Energy Center.

uschamber.com

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