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AFTER TRUMP’S CAMPAIGN KICKOFF, OIL FRACKERS DESCEND ON WASHINGTON SEEKING ASSURANCES: Oil drillers and those aligned with the fracking industry are seeking assurances from the Trump administration while in Washington on Wednesday that building new oil pipelines remains a top priority in the campaign season. They’re warning that the U.S. will lose its competitive advantage as an oil exporter without the pipelines.
Members of a relatively new trade group led by Continental CEO Harold Hamm, called the Domestic Energy Producer Alliance, will be hearing directly from senior Cabinet officials on implementing the president’s April executive order to expand energy and pipeline infrastructure.
Trump’s Cabinet is expected to hit a few milestones on implementing the order through July and August.
Hamm is a firm Trump supporter and a confidante to the president on energy policy.
The industry group’s members plan to meet with Environmental Protection Agency Administrator Andrew Wheeler and Interior Secretary David Bernhardt, along with Energy Department officials, and lawmakers on Capitol Hill.
“I’m interested in hearing about what their thoughts are on drilling … and the pipeline stuff is top of the line for me,” said Dan Eberhart, CEO of oil services firm Canary and a Trump donor, who flew into Washington for the meetings with Hamm’s group.
Eberhart keeps a close eye on the oil export situation as the U.S. has become a top global producer of crude oil within a relatively short period of time. Exports have been surging, but Eberhart sees a limit to the U.S.’ success coming in an election year.
Eberhart is warning that lagging infrastructure is going to begin to place a damper on the rise of U.S. crude exports in as soon as the next six months.
“We’re going to run out of export capacity next year,” Eberhart told John. “It may be a year from now, it may be six months from now.”
The limit for exports is between 3.1 million and 3.2 million barrels per day, on average, “but we’re going to hit that wall,” he said.
The U.S. is currently exporting an average of 2.6 million barrels of oil per day, based on the most current statistics from the federal government. New data due out next week should give a better estimate on how close producers are on hitting that wall.
The U.S. also running low on export terminals, with industry officials saying Gulf Coast tanker and shipping traffic will soon reach unsustainable levels.
Eberhart wants to make sure the administration is paying close attention to the issue, because once the export wall is hit, it is going to be up the administration to move through more cross-state permits for pipelines.
He suggests the administration is more focused, right now, on natural gas pipelines and liquefied natural gas export terminals, but it is oil bottleneck that is really a top concern for him.
Eberhart met with Energy Secretary Rick Perry just before Trump’s order to remove impediments to energy development was signed in May. He says Perry is aware of the issue.
The bottom line is this: “When we can’t grow the exports anymore, that’s going to be huge issue,” Eberhart said.
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EPA RELEASES FINAL RULE TO GUT OBAMA COAL PLANT REGULATIONS: The EPA released its much-anticipated final rule Wednesday gutting President Barack Obama’s signature plan for reducing carbon emissions from coal plants to combat climate change.
The EPA’s replacement of Obama’s Clean Power Plan is a modest rule intended to encourage efficiency upgrades at coal plants to help them exist longer and emit less pollution.
“ACE will continue our nation’s environmental progress and will do so legally and with respect for the states,” Wheeler said at a press conference Wednesday, where he was joined by White House chief of staff Mick Mulvaney, other administration officials, and Republican members of Congress from coal states. “The ACE rule will incentivize new technologies so coal plants can be part of our energy future.”
The Trump administration plan, known as the Affordable Clean Energy or ACE rule, would encourage states to allow utilities to make heat rate improvements in power plants, enabling them to run more efficiently by burning less coal to produce the same amount of electricity.
The rule is not projected to meaningfully reduce emissions and is expected to have little effect on the actions of electric utilities.
ACE takes different approach: The focus on regulating power plants individually is a rejection of the Clean Power Plan, which allowed for efficiency upgrades, but also sought to push the overall power sector to switch away from coal to natural gas and renewables.
The Clean Power Plan relied on “generation shifting” to gas and renewables and looked at the “power sector as a whole,” a senior EPA official told reporters on a press call. “We believe that is not legal.”
The Trump administration rule, unlike the Clean Power Plan, does not set a specific target for the power sector to reduce carbon emissions, giving states the authority to write their own plans for reducing pollution at individual plants.
ACE COAL RULE WILL BE HIT QUICKLY BY LAWSUITS: Environmentalists and Democratic states plan to sue the Trump administration, arguing the rule does not meaningfully fulfill the bare-bones requirement of the Clean Air Act since it would not significantly cut carbon emissions by keeping alive coal plants with efficiency improvements that would otherwise retire.
EPA says the new rule will reduce carbon emissions by as much as 35% below 2005 levels in 2030 — similar to projections for the Clean Power Plan — but most of that would occur from market forces absent any regulation. EPA, in a fact sheet accompanying the rule, projects ACE will cut carbon emissions 11 million tons by 2030, but that’s only about a 0.7% reduction compared to what would occur with no regulation.
The EPA official acknowledged “some” coal plants will increase emissions over their lifetime if they apply efficiency improvements and operate longer, rather than retire.
“What a responsible administration would do is strengthen the Clean Power Plan, not kill it,” David Doniger of Natural Resources Defense Council, which will be among the groups suing the EPA, told Josh. “We will attack this because it attempts to cripple the Clean Air Act as a tool to tackle climate change.”
California Attorney General Xavier Becerra, a Democrat, is hosting a press conference Wednesday afternoon outlining his state’s opposition to the Trump EPA rule.
EPA’s real goal: The Trump administration, critics and supporters agree, is seeking to have the federal courts enshrine its narrow view of law, preventing future administrations from acting aggressively to combat carbon emissions from power plants.
“They are looking to define the limits of EPA’s regulatory authority,” Jeff Holmstead, a former deputy administrator of the EPA in the George W. Bush administration and energy industry attorney who agrees with the Trump administration’s approach, told Josh. “The ACE rule can establish what EPA can do when it comes to regulating emissions from the power sector.”
TRUMP’S FISH AND WILDLIFE CHIEF HEADS TO SENATE FLOOR: The Senate Environment and Public Works Committee Wednesday approved the nomination of Rob Wallace to be assistant secretary of Interior for Fish, Wildlife, and Parks.
The committee action sends Wallace to the chamber’s floor for a final vote by the full Senate.
The nomination was approved through unanimous voice vote, with no opposition from Democrats.
Democrats Sheldon Whitehouse of Rhode Island and Cory Booker of New Jersey praised his nomination, lauding Wallace’s promise to work with them on park and habitat issues impacting coastal states.
Wallace has agreed to sit down with a bipartisan group of senators to discuss a way forward on addressing numerous coastal issues, which Whitehouse says the Interior Department has ignored.
NEW YORK SENATE PASSES BILL TO ACHIEVE NET-ZERO EMISSIONS BY 2050: The New York Senate passed a bill Tuesday night requiring the state to reach net-zero greenhouse gas emissions by 2050 across all sectors of the economy.
The Democratic-led Assembly is expected to pass the bill, considered the most aggressive climate legislation in the country, as soon as Wednesday.
The Climate Leadership and Community Protection Act, also supported by Gov. Andrew Cuomo, would require New York to cut its emissions 85% below 1990 levels by 2050, and offset the remaining 15% through methods such as carbon capture.
Its net-zero emissions by 2050 target is a state-level version of what many Democratic nominees for president have called for at the federal level.
As part of its goal, New York would have to obtain 70% of its electricity from renewables by 2030 and use entirely carbon-free power by 2040.
States are leading: New York would become the sixth state to adopt a 100% clean electricity mandate after Hawaii, California, New Mexico, Nevada, and Washington, along with Puerto Rico and Washington, D.C.
New York currently gets about 60% of its electricity from carbon-free sources, mostly from hydro and nuclear power.
New York’s net-zero bill also applies to harder to decarbonize sectors such as transportation, buildings, and industrial facilities.
ROCKET LANDS NEAR EXXONMOBIL HQ IN IRAQ: Oil and gas giant ExxonMobil evacuated dozens of foreign staff after a rocket hit the area near its operations headquarters in southern Iraq, injuring three Iraqis.
The rocket struck the Burjesia residential and operations headquarters near the city early Wednesday morning. Exxon has evacuated 40 of its staff from the oil site and security reinforcements have been called to the area, according to the Washington Post.
It is not immediately clear what country or organization is behind the attack, although the ordinance was reportedly a Katyusha rocket, the same type of Soviet-era projectile that exploded nearby the U.S. embassy in Iraq last month. The attack comes amid continuing tensions between the U.S. and Iran.
The Rundown
Wall Street Journal PG&E reaches $1 billion settlement with Paradise, California governments
BBC Canada approves $5.5 billion oil pipeline project
New York Times Soaring temperatures speed up spring thaw on Greenland’s ice sheet
Reuters Electric dreams in danger as funding dwindles for China’s Tesla challengers
Bloomberg London is pushing its motorists toward ssing only EVs
Calendar
THURSDAY | June 20
10 a.m., 366 Dirksen. Senate Energy and Natural Resources Committee holds hearing to examine opportunities and challenges for advanced geothermal energy development in the United States.
10:00 a.m., 2123 Rayburn. The House Energy and Commerce Committee will hold a joint subcommittee hearing on the Trump administration’s efforts to roll back fuel efficiency and emission standards and carbon pollution regulations from light duty cars and trucks.
