Daily on Energy: Oil considerations swaying Trump’s Syria policy

After threatening to remove U.S. troops in Syria, Trump is justifying a continued presence in the war-torn country by saying he wants to maintain control of Syrian oil fields.

The Pentagon has drawn up plans to reinforce several hundred U.S. troops still in Syria with 500 additional forces and heavy weapons to prevent those oil fields from falling back into the hands of ISIS or other “destabilizing actors” such as Syria’s Assad regime, Russia, and Iran, a defense official told reporters.

“This is a tectonic shift: Essentially Trump is saying, instead of leaving Syria, he is willing to put more resources in a smaller part of Syria in order to hold down a restive oil fiefdom,” said Nicholas Heras, a Middle East security fellow who studies Syria at the Center for New American Security. “It’s the perfect marriage of counter ISIS, counter Iran and applying strategic pressure on Russia and Assad by holding onto the oil.”

He’s a business, man: Trump is even suggesting he’d like to make Syria’s oil a business opportunity, proposing for a U.S. oil company to partner with America’s Syrian Kurdish allies to develop the oil for export.

“I always said if you’re going in, keep the oil,” Trump said at a cabinet meeting Monday. “We’ll work something out with the Kurds so that they have some money, so that they have some cash flow. Maybe we’ll get one of our big oil companies to go in and do it properly.”

Heras and other analysts tell Josh that prospect is remote at best. U.S. companies would be reluctant to put their personnel at risk in an uncertain security environment, and the oil fields are in terrible shape — requiring the building of new infrastructure to transport the oil — after the U.S. coalition bombing campaign against ISIS that began in 2014, when the terrorist group controlled the oil and profited from it.

“No U.S. company is going to sink money into Syria so long as it’s a warzone and Assad has a legal claim to that oil,” said Matt Reed, vice president of the energy consultancy Foreign Reports. “You can’t simply turn the taps and take the oil. You need to clear the wreckage and start from scratch and that’s a multi-billion-dollar investment over many years.”

Why Syria’s oil still matters: Analysts acknowledge Syria’s oil is strategically significant to the various actors fighting for the future of the country, even if Syria is not a major producer or exporter. Most reliable accounts put Syria’s total crude production at around 20,000 to 40,000 barrels per day, down from as high as 600,000 barrels a day.

“For the major players inside Syria, that oil is a potential lifeline,” Reed said. “ISIS made a fortune from it for years and Assad needs export revenue badly.”

The oil fields in question are located in Deir Ez-Zor province, in eastern Syria bordering Iraq, which produced the bulk of the country’s oil prior to the war. The Syrian government has sovereignty over the area under international law, although the area’s best oil fields are under the control of the U.S. and its Kurdish allies, the Syrian Democratic Forces, says Heras.

“There is real urgency on the side of the regime and its Russian allies to get those oil resources back under their control,” Heras said, noting parts of Syria governed by Assad often suffer from fuel shortages.

However the crude in Deir Ez-Zor is relatively high sulfur, or sour, and heavy, meaning it would fetch a lower price and be less attractive for companies to sell.

“It’s hard to imagine a mainstream U.S. oil company wanting to get involved,” said Kevin Book, managing director for research at ClearView Energy. “It would take an unusual skillset and risk tolerance for a company to green-light Syria right now.”

Welcome to Daily on Energy, written by Washington Examiner Energy and Environment Writers Josh Siegel (@SiegelScribe) and Abby Smith (@AbbySmithDC). Email [email protected] or [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.

NOT A GREAT WEEK FOR EXXON: The oil major is facing another lawsuit over how it has portrayed climate change science and risks.

Massachusetts Attorney General Maura Healey filed the lawsuit Thursday, alleging ExxonMobil has mislead investors and consumers — both about the risks the company faces from the transition to a low-carbon economy and about the actions the company is taking to clean up its portfolio.

“Today, Exxon is ramping up production of fossil fuels, while telling YOU that they’re a clean energy leader,” Healey tweeted of the lawsuit. “We know this case won’t be easy, but Massachusetts consumers and investors deserve the truth.”

Exxon is already in court: New York state’s lawsuit against the oil company went to trial this week. New York has taken a slightly different tack, accusing Exxon of securities fraud by underrepresenting how much the company would be exposed to future climate regulations.

The oil company’s attorney, Ted Wells Jr., said in an opening statement this week before the court that Exxon did “absolutely nothing wrong.” The company has acknowledged climate change is real and a problem “for many years,” Wells said. “But the problem of climate change does not permit the New York attorney general to bring a meritless complaint and one that is so unconnected from the truth.”

But Exxon also faces challenges in the court of public opinion: Democrats in Congress are determined to see the oil industry face the music, too. The House Oversight committee’s Subcommittee on Civil Rights and Civil Liberties held a hearing Wednesday look at oil companies’ “efforts to suppress” climate science.

Two witnesses at the hearing were former Exxon research consultants, who argued the oil company hid the truth of what it knew about climate change.

“The advertisements that Exxon ran in major newspapers raising doubts about climate change were contradicted by the scientific work we had done and continued to do,” Martin Hoffert, a professor at New York University who worked as a research and engineering consultant for the oil major in the 1980s, told lawmakers.

“This was immoral and has greatly set back efforts to address climate change,” Hoffert added.

EPA WINS FIRST ROUND OF FUEL ECONOMY COURT WARS: But the Friday order from the D.C. Circuit judges sets the stage for a bitter fight over whether the Trump administration backs up its pending action to weaken fuel economy standards with enough evidence.

A group of states led by California, environmentalists, and a coalition of electric utilities and advanced transport companies like Tesla had sued the Environmental Protection Agency’s determination in April 2018 that it would alter its greenhouse gas emissions limits for cars. That finding set in motion the Trump administration’s efforts to relax fuel economy standards and eliminate California’s authority to regulate cars’ greehouse gas emissions.

The D.C. Circuit said the EPA’s determination wasn’t a “final action,” and opponents would have to wait to sue over the administration’s changes to the standards. But the judges also appeared to issue a warning shot to the EPA and Transportation Department that they’d better clearly explain themselves if they diverge from Obama-era fuel economy findings.

“If EPA’s rulemaking results in changes to the existing 2012 standards, it will be required to provide a reasoned explanation and cannot ignore prior factual findings and the supporting record evidence contradicting the new policy,” the order reads.

CLEAN AIR COMMITTEE CHAOS: EPA’s science advisors aren’t likely to agree Friday about whether the agency should tighten air quality standards for fine particulate matter — and that could create more problems for the agency down the road, observers say.

The EPA’s Clean Air Scientific Advisory Committee is meeting in North Carolina to finalize advice to the agency about what it should do about the air quality limits. The EPA has said it wants to finish its review and potential updates to the standards next year.

But the disagreement among the committee comes after members raised concerns they didn’t have all the scientific expertise they needed to conduct the review. EPA Administrator Andrew Wheeler disbanded an expert panel in 2018 that would have helped advise the seven-member committee.

Twenty members of the disbanded panel reconvened as an independent group, and they urged the EPA to strengthen the air quality standards in a consensus letter Tuesday.

One former EPA air office staffer tells Abby the science advisors should tell the EPA it needs more time and resources to review the new science. Disagreement among the science advisors could ultimately cost the EPA in the courts, John Bachmann, who worked in the EPA’s Office of Air Quality Planning and Standards for 30 years, said.

“What’s the rush? Isn’t it more important to get it right than to get it fast?” he told Abby.

CHUCK SCHUMER’S PLAN TO DRIVE CLEAN CARS: His new plan sets a goal of having all cars on the road be clean by 2040 and would cost $454 billion over 10 years.

The Senate minority leader and New York lawmaker boasted in a New York Times op-ed his plan already has the support of environmentalists, labor unions, and carmakers like Ford and General Motors.

It has three major components.

First, it would set up a cash-for-clunkers program, giving consumers a discount on American-made electric cars if they trade in gas-powered vehicles. That program alone, Schumer estimates, would eliminate 63 million gas-powered cars from the roads by 2030.

The other two pieces of Schumer’s plan focus on infrastructure. It would offer grants to states and cities to install EV chargers, as well as provide grants to “retool” U.S. manufacturing plants to focus on EV and battery technologies.

TAKEOFF COMING FOR OFFSHORE WIND: Offshore wind is set to be a major player in combating global climate change, with the potential to grow 15-fold and attract $1 trillion in investment over the next two decades, the International Energy Agency reported Thursday.

Offshore wind currently provides just 0.3% of global power generation, but that could grow by 15 times, serving up between 3.1% to 5.4% of electricity by 2040, depending on how significantly countries enact policies to reduce emissions.

Offshore wind has historically been confined to European nations, but it is expanding thanks to falling costs, supportive government policies, and technological progress, such as larger turbines and floating foundations.

China added more offshore wind capacity in 2018 than any other country, and could be the world’s leader by 2025, while the U.S. has good offshore wind resources in the northeast, despite recent delays by the Trump administration in federal permitting of such projects.

DEMOCRAT TO DELIVER ON TRANSMISSION PROMISE: Democrat Martin Heinrich plans to introduce legislation to create an investment tax credit for certain “regionally significant” transmission projects in order to expand the use of wind and solar.

He’ll also introduce another bill directing the Federal Energy Regulatory Commission to improve its inter-regional transmission planning process, to encourage private companies to finance projects.

“Tax incentives have proven to be a major signal to investors to put their capital behind wind and solar,” Heinrich said. “We should encourage the same type of growth for the infrastructure that will deliver the power from these resources to market.”

The New Mexico senator announced the twin initiatives Thursday after giving a keynote address at the International Summit on the Electric Transmission Grid hosted by WIRES, a nonprofit trade group.

There, Rep. Paul Tonko, D-N.Y., chair of the energy committee’s climate subcommittee, warned his panel won’t be able to reach its decarbonization goals unless Congress provides better direction on national transmission policy.

The Rundown

Washington Post Americans would rather reduce oil and gas exploration than ‘drill, baby, drill’

New York Times A forecast for a warming world: learn to live with fire

Los Angeles Times PG&E says transmission line broke as Sonoma fire began

Calendar

TUESDAY | OCTOBER 29

10:30 a.m. 2123 Rayburn. The House Energy and Commerce Committee’s Environment and Climate Change Subcommittee holds a hearing entitled, “Protecting the RFS: The Trump Administration’s Abuse of Secret Waivers.”

2:30 p.m. Senate Visitors Center, Room 200/201. Senate Democrats Special Committee on the Climate Crisis holds a hearing entitled, “Dark Money and Barriers to Climate Action.”

WEDNESDAY | OCTOBER 30

10:00 a.m. 406 Dirksen. The Senate Environment and Public Works Committee holds a hearing on the nomination of Sean O’Donnell to be Inspector General of the Environmental Protection Agency.

10:30 a.m. 2322 Rayburn. The House Energy and Commerce Committee’s Energy Subcommittee holds a hearing entitled, “Building a 100 Percent Clean Economy: Solutions for the U.S. Power Sector.”

THURSDAY | OCTOBER 31

10:00 a.m. 1225 Eye Street NW. The Bipartisan Policy Center hosts an event entitled “Scaling Carbon Removal: From Public Innovation to Commercial Opportunity.” Former Energy Secretary Ernest Moniz delivers a keynote address.