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NIGHT OF THE ‘ZOMBIE’ WOTUS: There is renewed industry pressure on the Trump administration to step up its effort to repeal the Waters of the U.S. rule after Thursday’s court defeat brought the Obama-era regulation “back from the dead.” “The South Carolina court has effectively brought WOTUS back from the dead in 26 states, creating a zombie version of the 2015 rule that threatens the rights of farmers and ranchers across the country,” said Scott Yager, the National Cattlemen’s Beef Association’s chief environmental lawyer. The livestock fight: Ranchers and farmers are the most outspoken critics of the WOTUS rule, because it means the EPA has a greater say over how they manage their land’s water use down to the smallest water hole. The WOTUS measure expanded EPA’s enforcement authority to include small areas of water that critics say go far beyond what the federal government has authority to regulate under the Clean Water Act. The EPA rule would treat a watering hole or drainage ditch as a U.S. waterway, the same as a river or major tributary. Continuing the fight in court: “NCBA will continue to fight in the courts and in Congress to kill the 2015 WOTUS rule once and for all,” Yager said. 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. FEDERAL JUDGE ORDERS TRUMP TO REINSTATE OBAMA’S WOTUS RULE: The status of our nation’s streams and waterways just got a whole lot more confusing. Most importantly, Thursday’s decision by the U.S. District Court in South Carolina, ordering Trump to reinstate WOTUS, means that the so-called Clean Water Rule is again operative in 26 states where district courts have not halted the regulation, creating a “patchwork” of rules in different states. “The ruling is problematic because it creates a patchwork of states where the WOTUS rule applies and others where it does not,” Peter Tolsdorf, general counsel of the National Association of Manufacturers, a defendant in the case, told Josh. He vowed to appeal the ruling.
EPA lost because it rushed the job: When former EPA Administrator Scott Pruitt issued a rule delaying the Waters of the U.S. regulation until 2020 in February to allow the agency time to rewrite it, he skipped the customary customary 30-day waiting period between the rule’s finalization and its effective date. Critics say that in doing so, he circumvented the Administrative Procedures Act, or APA, opening the agency to litigation.
Judge David Norton, an appointee of George H.W. Bush, agreed. “As administrations change, so do regulatory priorities,” Norton said. “But the requirements of the APA remain the same. The court finds that the government failed to comply with these requirements.” The setback is the latest example of courts rebuking the EPA for incautious and rushed deregulatory actions undertaken by Pruitt. Pruitt’s acting replacement, Andrew Wheeler, has pledged to be more deliberate in rolling back Obama’s agenda. Wheeler will have his chance: Wheeler’s EPA is in the process of repealing and replacing WOTUS all together. It recently sent a draft replacement rule to the White House for review, which should be made public soon. COURT KILLS TRUMP DELAY OF CHEMICAL SAFETY RULE: But the courts are not done rebuking the Trump administration. A federal appeals court Friday morning threw out the EPA’s attempt to delay, by 20 months, Obama-era chemical facility safety rules. The D.C. Circuit Court of Appeals — this reasoning looks familiar — faulted the EPA for not being careful, and lacking rationale.
Different case, same result: “Because EPA has not engaged in reasoned decision making, its promulgation of the Delay Rule is arbitrary and capricious,” the court said. The court added that EPA “makes a mockery of the statute.”
Trump’s Supreme Court nominee Brett Kavanaugh heard arguments in the case, but did not participate in the decision. Environmental groups, the U.S. steelworkers union, and 11 states had argued the EPA violated the Clean Air Act by delaying the tougher regulatory rule over high-risk industrial plants. And they keep on winning: New York Attorney General Barbara Underwood celebrated the ruling, and mocked EPA for its repeated court failings. “Again and again, the Trump@EPA has tried to push through policies that jeopardize our health and fly in the face of the law,” she wrote on Twitter. “Again and again, we’ve taken them to court and won.” ETHANOL VS. ‘SECRET SCIENCE’: The number of comments on the 2019 Renewable Fuel Standard is now brimming past the quarter of a million mark ahead of Friday’s deadline, placing it in the lead over the EPA’s ‘secret science’ rule that barely broke 250,000. Comments opposing ethanol mandate: Many of the late breaking comments sent to the agency in the last 24 hours on the ethanol mandate call on it to cut the amount of ethanol blended in the gasoline supply. Ohio union chimes in: Union members from Ohio called on the agency to drop the amount refiners are required to blend because of the high cost it imposes on refinery workers in the Buckeye State. “To avoid this situation, EPA should use its waiver authority to prevent ‘severe economic harm’ and reduce the proposed 15 billion gallon conventional biofuel requirement to a level that reflects 9.7 percent of projected fuel demand,” said Stephen Brown, a representative of the International Brotherhood of Electrical Workers Local Union No. 8. The American Petroleum Institute announced Thursday that it is re-upping its call for repeal of the renewable fuel program, altogether. API argues the program will harm vehicle engines and place consumers on the hook for expensive repairs. The ethanol industry is expected to counter these arguments in its comments, which they will file later Friday. RICK PERRY NOT PANICKING OVER MEXICO’S VOW OF ENERGY INDEPENDENCE: U.S. refiners will not suffer if Mexico becomes more self-sufficient for its energy needs, Energy Secretary Rick Perry said Thursday. Perry struck an optimistic tone after meeting with the staff of Mexico’s leftist, populist, president-elect Andrés Manuel López Obrador, who has vowed to roll back constitutional reforms that opened the country’s formerly nationalized energy system to foreign investment.
Mexico is just one market on the path to ‘energy dominance’: “We are going to have more markets, most likely, than we are going to have products to export,” Perry said after meeting with López Obrador’s energy team, in comments reported by S&P Global Platts.
López Obrador has pledged to stop importing refined products such as gasoline by 2022, and plans to build a new crude oil processing facility. But Mexico matters: That is significant because Mexico imports more U.S. natural gas by pipeline than any other country, and recent years have seen the buildout of an extensive pipeline network to transport the product. Perry stressed he is not worried, even tweeting out friendly photos with López Obrador’s energy staff, and vowing to “continuing to build on our strong energy partnership.” “It is a good goal for Mexico [to be energy independent]. I tip my hat to the president-elect for having that as a goal, but we know this won’t happen overnight,” Perry said. ZINKE’S ‘REVOLVING DOOR’ TARGETED IN ENVIRO LAWSUIT: Environmentalists just can’t leave Interior Secretary Ryan Zinke alone, as a new lawsuit to proves. The group Friends of the Earth sued Zinke Thursday night to get Interior to hand over documents that they believe will expose a “revolving door” between Zinke’s staff and the industries they are supposed to be regulating. Trying to get answers from Interior: The lawsuit was filed in the D.C. District Court after the Interior Department did not respond to a Freedom of Information Act request filed by the national environmental group. A bullseye painted on Zinke: Activists are targeting the agency after reports showed a group that Zinke founded in his home state of Montana had been working with David Lesar, the chairman of the large oil services firm Halliburton, on a real estate development project. Zinke denied that he had any involvement with the organization after becoming secretary. The agency’s inspector general is currently investigating the matter. The lawsuit takes aim at a number of Interior officials as prime examples of the revolving door, including Deputy Interior Secretary David Bernhardt, who had worked as a lawyer and lobbyist for oil and natural gas companies before joining the Trump administration. TRUMP-ALLIED ENERGY CEO SAYS HE’S RAISING PRICES BECAUSE OF STEEL TARIFFS: Dan Eberhart, a Trump donor and CEO of America’s largest private oilfield services company, plans to tell customers that he is raising prices to cover additional costs resulting from the president’s tariffs on imported steel. Eberhart, who runs the oil equipment company Canary, provided Josh a copy of a letter he plans to send to customers, warning of impending price hikes because of higher material costs for steel it uses in products, such as wellheads and valves.
‘No other option’: “As a steel-dependent business that is downstream of the tariffs, we have no recourse except to pay the higher prices,” Eberhart said in the letter. “We have no other option other than passing at least some of those costs to our customers.”
His problem is simple: Eberhart said Canary spends millions of dollars per year on imported steel because domestic manufacturers do not produce the niche grade of steel he uses in his products. And the solution is obvious: He hopes to revisit price increase when “the trade situation changes,” Eberhart said in the letter to customers, and urges the end of Trump’s trade war in order to “continue unleashing America’s energy.” RECYCLING INDUSTRY IS THE LATEST INDUSTRY TO BE HURT BY TRUMP’S TARIFFS: The recycling industry is the latest industry to prod the Trump administration on the adverse effects of the president’s tariffs. The strain is too much: “The combined strain on the U.S. recycling industry of China’s import restrictions and the tariffs imposed by both the U.S. and Chinese governments will have a damaging effect long-term on our industry’s competitiveness and the health of the manufacturing supply chain,” wrote Robin Wiener, president of the Institute of Scrap Recycling Industries, in a letter sent earlier this week to Commerce Secretary Wilbur Ross and U.S. Trade Representative Robert Lighthizer. End the trade war: Weiner wants the administration to end the trade war with China by beginning talks as soon as possible. “We respectfully request that every effort is made to return to the negotiating table with China to find a path forward in our trading relationship,” he wrote. “[T]he absence of cooperation to resolve disagreements is creating much harm to our industry and our manufacturing customers.” TRUMP ADMINISTRATION, SENATORS VOW TO PARTNER WITH STATES ON WILDFIRES: The Trump administration is partnering with a bipartisan group of senators on a plan to work closer with western states on forest management projects to help prevent wildfires. Agriculture Secretary Sonny Perdue, fresh back on Thursday from a trip to California to see the toll of record-setting wildfires, expanded on the administration’s push to do more forest management projects, which involve the removal of trees and vegetation in forests to take away fuel for fires, and timber sales. There were eight major wildfires burning in California as of Thursday, including the Mendocino Complex, the state’s largest ever wildfire. More than 80 others were burning nationwide, including 17 in Alaska, 15 in Montana, and nine in Washington state.
Why this is different: The new push to prevent fires carries more heft, as Perdue announced his plan with backing from Sen. Lisa Murkowski, R-Alaska, the chairwoman of the Energy and Natural Resources Committee, and the panel’s top Democrat, Maria Cantwell of Washington, along with Democrat Ron Wyden of Oregon and Republican Steve Daines of Montana.
“These horrible events just like last year are stark reminders of the immense forest fire health crisis in this country and the urgent need to dramatically increase our preventative forest treatments,” Perdue said Thursday in a press conference with the senators. Inside the plan: Their new plan, while lacking a ton of detail, would involve the federal government working more closely with states and private landowners to identify and prioritize forest management projects, and share personnel to carry them out. The U.S. faces a backlog of needed forest management projects, as federal and state agencies have used more of their budgets responding to wildfires, borrowing money from other accounts, rather than preventing them. Congress’ omnibus spending bill addressed the “fire borrowing” problem by establishing a contingency account for use in bad fire years. But there’s not enough funding for forest management to address the problem, experts say, as wildfires become more intense due to climate change. “These are not your grandfather’s fires,” Wyden said. “They are bigger, they are hotter, they are more powerful.” How coming together helps: The senators and Trump administration hope better collaboration with states will save money. They also aim to encourage more use of innovative technologies, such as drones and satellites that can hover over forests and provide information on their condition. “Our best thing we can do is work together on a hasty response,” Cantwell said. “We do a have new normal, and we have to meet it with a very aggressive response.” CHINESE HACKERS TARGETED ALASKA GOVERNMENT DURING PIPELINE TALKS: Chinese hackers targeted the Alaska state government during negotiations over a major natural gas pipeline project in the Arctic state, according to cybersecurity experts. “We believe these reconnaissance activities were not coincidental as they align broadly with China’s strategic and economic interests,” said the new report from Recorded Future, a private intelligence company focused on “real-time” threat insights.
Energy is under attack: Alaska Gov. Bill Walker, an independent seeking reelection through the Democratic Party primary, led a trade delegation to China in May. The trip was part of a longer-term effort to build a pipeline that would connect one of the world’s largest natural gas reserves to the Chinese market.
Walker is trying to finalize a deal to have China finance a $43.4 billion pipeline project that could provide access to Alaska’s North Slope, which could hold more than 200 trillion cubic feet of natural gas. The report is interesting because the energy industry has recently been hit with cyberattacks against the data networks that pipeline operators use. In addition, Russian hackers were able to access the control rooms of U.S. electric utilities last year, a tactic that could be intended to cause blackouts, homeland security officials said in July. RUNDOWN Houston Chronicle In Trump’s Washington, Rick Perry lays low New York Times Elon Musk, amid Tesla furor, tells of ‘most difficult’ year Wall Street Journal Trade fears throw future of U.S. natural gas into question Reuters Russian oil industry would weather U.S. ‘bill from hell’ The Guardian Ryan Zinke’s school friend crippling climate research, scientists say |
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CalendarTHURSDAY | August 16 All day, Walter E. Washington Convention Center. Utility company Exelon hosts its 2018 Innovation Expo. 11:59 p.m., Public comment period deadline for EPA’s science rulemaking. All day, California. The 2018 American Council for an Energy-Efficient Economy holds its 20th biennial conference on Energy Efficiency in Buildings through August 17. All day, Boston. The Environmental Protection Agency kicks off the first in-person National Environmental Justice Advisory Council public meeting since new members were announced on March 3, 2018. The event extends through August 16. FRIDAY | August 17 11:59 p.m., Public comment period deadline for EPA’s 2019 Renewable Fuel Standard and 2020 biodiesel rulemakings. MONDAY | August 20 11:59 p.m., Public comment deadline on the White House Council on Environmental Quality’s proposal to consider updating the National Environmental Policy Act. |
