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TRUMP ADMINISTRATION DOLES OUT EXEMPTIONS AS IT ROLLS OUT IRAN OIL SANCTIONS: The Trump administration announced Friday morning that it will dole out exemptions to eight countries allowing them to continue importing oil from Iran even as the U.S. applies sanctions beginning Nov. 5.

The sanctions are intended to punish countries that buy oil from Iran, after President Trump rejected the nuclear deal with Tehran in May, by cutting them off from the U.S. financial system.

Fears of higher oil prices softened the policy: But after promising a zero-tolerance approach to cutting off oil supplied from Iran — which is key to Tehran’s economy — the Trump administration blinked at the prospect of higher oil and gas prices as the midterm elections approach.

“We expect to issue some temporary allotments to eight countries only because they have demonstrated significant reductions in crude oil and cooperation on other fronts,” Secretary of State Mike Pompeo said in a press call Friday morning, touting that oil prices have remained “stable” which is “good for American consumers.”

Brent, the global benchmark, was at it lowest level since mid-August this week, after prices had breached $85 per barrel last month because of expectations that the Trump administration would impose an aggressive sanctions policy on Iran’s oil.

Pompeo insists the exemptions will go away: Pompeo emphasized the waivers are temporary, and that each of the exempted countries are making “important moves” to get to zero imports of Iranian oil. He said he expects two of the eight countries to eventually cease buying oil from Iran, and the six others to reduce purchases by “greatly reduced levels” in a matter of “weeks.”

Pompeo did not name the countries, but said the administration would provide those details on Monday. Bloomberg reported earlier Friday that those granted waivers include China — which buys the most oil from Iran, India — the second largest buyer, South Korea, and Japan.

Projecting a tough policy: The secretary of state tried to downplay the exemptions by projecting the Trump administration’s sanctions rollout as tough. He noted Iran has already seen its oil exports fall 1 million barrels per day even before the imposition of sanctions, more than many analyses projected would occur.

“The Iranian economy today is already feeling the effects of this effort, not because the sanctions have snapped back, but because the world and Iran knew this was coming,” Pompeo said. “We exceeded expectations because maximum pressure means maximum pressure.”

He also contrasted the Trump effort with that of the Obama administration. Before reaching the Iran nuclear deal, the Obama granted exemptions to 20 countries over three years for similar oil sanctions on Tehran. During those sanctions, the Obama administration expected nations to cut imports by about 20 percent during each 180-day review period to get subsequent exemption.

OIL CEO WHO URGED WAIVERS PLANS TO MEET WITH ADMINISTRATION NEXT WEEK: Trump donor and Canary oil services CEO Dan Eberhart plans to meet with the administration next week to discuss the Iran oil sanctions roll-out, John has learned.

Eberhart, in a recent Washington Examiner op-ed, had urged the White House to issue waivers to ease the strain on the oil market.

“Taking Iran’s exports all the way to zero isn’t necessary to inflict severe economic pain on Tehran,” he wrote. “Granting sanctions waivers to some Asian allies would keep some Iranian oil flowing and help keep prices in check.”

Eberhart tells John that he plans to meet with Trump administration officials on Nov. 9.

Eberhart also wants Trump to make good on his $1 trillion pledge to boost infrastructure by investing in pipelines and other energy hardware that would make the U.S. more resilient to oil price shocks.

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US REFINERY OUTAGES NOT AFFECTING FUEL SUPPLY AHEAD OF IRAN OIL SANCTIONS: The Energy Department is reporting close to record high gasoline demand this fall, and despite refinery maintenance outages, the price has actually fallen, not gone up.

The Energy Information Administration’s weekly oil supply update showed that refinery outage due to fall equipment maintenance is not influencing prices for gasoline, diesel, and jet fuel.

“EIA has reached this conclusion despite the current high level of U.S. gasoline demand, which so far in 2018 has been close to the record high seen in 2017,” the agency said in its weekly report.

Awash in a sea of gasoline: The average price of gasoline and diesel were down three cents from last week, the agency continued. For the rest of the fall, total fuel production losses as a result of the planned outages accounts for about 10 percent of the existing gasoline inventory, just above 13 percent for jet fuel inventory, and 10.5 percent for diesel and heating oil inventories.

“Regional inventories will likely be sufficient to make up for lost in-region production” as a result of “unanticipated events,” the agency said. Supply is not expected to be affected.

PETRAEUS CHEERLEADS FOR TRUMP’S OIL SANCTIONS ON IRAN: Retired general and former CIA chief David Petraeus has become a somewhat unexpected cheerleader for Trump’s move to impose oil sanctions on Iran next week.

He has high hopes for the sanctions: “The sanctions are going to bite. Trust me, on this, they really will,” Petraeus said Thursday during a keynote panel discussion at the National Council on U.S. Arab Relations annual policymakers summit in Washington.

Petraeus used the appearance to downplay concerns that Trump’s decision will lead to high oil prices, and to assure the Saudis and other Gulf allies at the summit that the U.S. remains a partner, despite the recent row over the murder of Saudi journalist Jamal Khashoggi.

This administration is careful: “To be sure, the administration is going to very careful in how it allows these to come into force, probably doing some negotiating with China, with India, with some of the other oil countries that import oil from Iran to be careful not to spike oil prices,” he said. “And our friends from Saudi Arabia are going to increase oil output … as was done the last time we had sanctions on Iran.”

BOLTON REFUSES TO TOUT OIL SANCTIONS AMID HAWKS’ DISPLEASURE: Trump’s top national security adviser did not participate in the rollout of the White House plan to impose sanctions on Iran, after the administration settled on a course of action that is disappointing Iran hawks.

Waivers undercut force of the sanctions: Trump has decided to grant waivers to a series of key countries that would like to continue purchasing oil from Iran, and won’t push for the regime’s banks to be disconnected from a critical international financial entity.

That outcome is a disappointment to at least some advocates of the president’s “maximum pressure” campaign. White House national security adviser John Bolton was expected to issue a statement on camera Friday outlining a more aggressive path, but he scrapped that plan Thursday afternoon.

RICK PERRY IS OFF TO EUROPE NEXT WEEK TO SECURE LNG DEAL: Energy Secretary Rick Perry is off to Europe next week to continue discussions on energy security with Poland, Ukraine, Hungary and Czech Republic “to build on his recent efforts to elevate American energy partnerships in the region.”

Perry is also expected to announce a new liquified natural gas deal with Poland, Axios first reported on Thursday. The deal is part of the Trump plan to diversify the region’s energy supply away from Russia.  

TRUMP SHOWS SIGNS OF CONCERN FOR ZINKE AFTER JUSTICE OPENS PROBE: The White House is reportedly getting a bit concerned about Interior Secretary Ryan Zinke breaking federal rules after the agency’s inspector general referred him to the Justice Department earlier in the week.

At least that’s what is being reported on the front page of the Washington Post on Friday morning, citing two senior administration officials.

The officials told the newspaper that Trump has asked aides for information about a real estate deal in Montana that involved a foundation that Zinke once headed and David Lesar, chairman of oil services giant Halliburton.

Trump told the aides that he was afraid that Zinke may have broken rules while serving as the interior secretary and is concerned about the Justice Department referral, the unnamed officials told the newspaper.

Nevertheless, there was no indication that Trump would fire Zinke.

GOP ATTACKS FLORIDA DEMOCRAT FOR ALLEGED TIES TO ‘DIRTY COAL MONEY’: The campaign arm for House Republicans is attacking the Democratic candidate in a competitive race on the southern tip of Florida for allegedly being allied with coal and insufficiently devoted to combating climate change.

The National Republican Congressional Committee is running an advertisement alleging that Democrat Debbie Mucarsel-Powell, running to represent Florida’s 26th District, is beholden to “dirty coal money” and not pure in her commitment to limiting global warming.

What explains the change in rhetoric: Republicans generally don’t run on climate change, but Florida’s 26th District, represented by Carlos Curbelo and spanning south Miami to the Florida Keys, is especially vulnerable to sea level rise and flooding.

“Every ad we run is district specific,” Maddie Anderson, the NRCC’s southern and central regional press secretary, told Josh. “Generally, though, we call out hypocrisy.”

But critics think the allegations are a stretch: Asked for specific evidence of Mucarsel-Powell’s ties to coal, Anderson referred to a hedge fund that billionaire environmental activist Tom Steyer founded years ago that invested in coal mines and power plants.

Anderson said Steyer has donated $2,700 to Mucarsel-Powell’s campaign. But Steyer is no longer affiliated with the hedge fund, Farallon Capital Management, and he is one of the leading progressives calling for ending the use of fossil fuels.

Anderson also cited a company tied to Mucarsel-Powell’s husband, Robert, that she says produces iron and steel and imports coal.

The Mucarsel-Powell campaign did not provide an on-the-record comment in response to an inquiry regarding those allegations.

SOUTH CAROLINA HOLDS DAY TWO OF HEARINGS ON NUCLEAR POWER PLANT SCANDAL: The South Carolina Public Service Commission is holding day two of hearings on a case brought to the energy regulators by environmentalists to scrap the construction of the delayed V.C. Summer nuclear power plant.

The case deals with the project not being completed over the last decade, and then scrubbed completely last year, while the utility that is building the plant has been able to collect billions of dollars from ratepayers.

That means electric rates have gone over the years to absorb the burden of the power plant’s construction, but without any clear idea of whether or not the plant will actually be completed. And the project operator can request additional fees each year. The plant has been under construction for a decade.

“The PSC is going to decide if South Carolina Electric and Gas is going to pay for up to $5 billion or if that’s going to be on the backs of the ratepayers,” Tom Clements, Friends of the Earth senior adviser, told local television news Thursday. Friends of the Earth and Sierra Club are lead petitioners in the administrative hearing before the commission.

Gary Jones, a lead engineer on the Summer plant, testified on Friday that the utility intentionally misled the commission on the schedule and construction of the plant.

The utility’s lawyers pushed back in cross examination, saying “Mr. Jones is wrong.”

It is not the job of Jones to express his opinion, but to serve as an expert, and his testimony should be thrown out, utility counsel asked.

The commission rejected the utility’s objection to Jones.  

Watch the hearing here.

COAL INDUSTRY CLAIMS PJM STUDY OF GRID RESILIENCE CONFIRMS ITS FEARS: The coal industry claimed Thursday that a study by the largest grid operator that downplayed the impact of retiring coal and nuclear plants actually demonstrated the importance of coal.

PJM Interconnection released a report Thursday finding that its electricity supply would hold up against a range of threats, providing evidence against the Trump administration case for preserving coal and nuclear plants.

“The grid is more reliable today than it’s ever been,” PJM CEO Andrew Ott said in revealing the study, adding that he believes “government intervention is unnecessary” to save coal and nuclear plants, as the Trump administration is considering doing.

That was not the message that the coal trade group American Coalition for Clean Coal Electricity took from the report.

“PJM’s analysis shows that accelerated coal retirements could lead to periods when demand for electricity exceeds supply,” said Michelle Bloodworth, president and CEO of the coal group. “This should worry electricity consumers in other parts of the country, not just in PJM.”  

Bloodworth is likely referring to a component of the report that said in one extreme scenario the grid could face risk – if more retirements of power plants occur than expected.

RUNDOWN

Wall Street Journal U.S. pushes Middle East deals ahead of Iran oil ban

Reuters Trump’s latest tariffs undercut his first trade salvo in solar

New York Times Where Americans (mostly) agree on climate change policy, in five maps

Bloomberg Cities threatened by climate risk still getting AAA bond ratings

Washington Post In Virginia’s coal country, a Democratic challenger makes his case to Trump voters