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NEW GRID FORECAST COULD CLOUD NEED FOR PERRY’S COAL PLAN AT FERC: Coal-fired power plants are closing faster than new plants are opening to replace them, but power from natural gas and renewables will be enough to shore up those losses, according to projections released Thursday morning by the North American Electric Reliability Corporation. That casts doubt on the need for Energy Secretary Rick Perry’s plan to reward coal and nuclear plants for their reliability.
NERC’s 10-year reliability assessment showed the “new resources, which are primarily natural gas and renewable generation, should collectively provide the bulk power system with the same level of voltage support, frequency response and other essential reliability services as conventional generators.”
The assessment also concludes that the growth in electricity demand is at its “lowest rates on record.” So, conventional coal, oil, and some nuclear generation are leaving the system as there is less demand for that power.
The assessment does not directly assess Perry’s grid plan, but it suggests that grid resilience will not be undermined by coal and nuclear closures, which is the driving focus of Perry’s proposal to prop up those plants with market-based incentives through the Federal Energy Regulatory Commission.
NERC was designated by Congress to be the nation’s grid reliability overseen by FERC, and Thursday’s grid study likely will be examined as the commission looks to whether to approve the Perry proposal next month.
FERC recently asked Perry to extend it an additional 30 days in its assessment. Perry wanted the commission to approve it by Dec. 11.
John Moura, NERC’s head of reliability, said on a call with reporters that FERC still needs to look at the resilience and reliability issues from the premature closing of nuclear and coal plants, but he said nothing about the need for the commission to implement incentives.
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WHITE HOUSE TALKS ON ETHANOL MANDATE END IN ULTIMATUM: The second round of White House-brokered talks on the future of the nation’s biofuel program ended Wednesday with a warning from the corn ethanol camp, who said no solution can be reached if it means undermining the Renewable Fuel Standard.
The first meeting: The first meeting was held last week at the White House between President Trump and his advisers and a group of Republican senators looking to find a way for oil refiners to get around the high cost of complying with the RFS program. Currently, independent refiners must buy expensive Renewable Identification Number credits, or RINs, which they say places them at a strategic disadvantage.
‘An understanding’: “The integrity of the RFS is Sen. Grassley’s priority and there was an understanding expressed broadly in the meeting that any outcome can’t undermine the integrity of the RFS,” said Grassley spokesman Michael Zona.
In Cruz’s court: Zona said whatever happens next is up to Cruz. Grassley wants to see him “circulate specific proposals for consideration,” Zona said.
Industry says the solution is obvious: But the ethanol industry said the option before Cruz is obvious, according to Growth Energy, a leading ethanol advocacy group in Washington. “There already is a solution to all of the issues being discussed in this meeting,” said Emily Skor, the group’s CEO.
The solution is called “RVP relief,” she explained, referring to the industry’s call for legislation to be passed changing EPA’s restrictions on Reid Vapor Pressure for 15 percent gasoline-to-ethanol fuel blends that would allow the sale of more ethanol at the pump.
“Blending more ethanol is what lowers RIN [credit] prices,” Skor said.
“RVP relief would immediately add another three month’s worth of E15 sales to the market. That’s how the RFS is meant to work.”
SOLAR FACES POLICY UNCERTAINTY FROM TRUMP: The U.S. solar industry issued a report Thursday morning showing the industry managed to add two gigawatts of electricity generation to the power grid despite rising costs caused by “policy uncertainty” in Washington.
Trump mulls solar tariffs: The Trump administration is contemplating import tariffs on solar panel imports. The new market report from GTM Research and the Solar Energy Industries Association said “prices rose due to a tight global supply of modules and uncertainty around the Section 201 trade case now being weighed at the White House.”
Trump should ‘reject’: “We urge President Trump to reject tariffs and allow solar to continue its amazing growth for the U.S. economy, national security and American families in all 50 states,” Ross said.
More than two gigs: Just over two gigawatts of solar were added in the third quarter, making it the eighth consecutive quarter that the solar industry added more than two gigawatts, enough to power 1.4 million homes.
Solar falling: Nevertheless, the new solar additions were down compared to last year before tariffs were being contemplated. “The capacity additions represent a 51 percent drop year over year,” SEIA said.
That places the industry down 22 percent compared to last year, which is in line with the expected 21 percent decline for the entire year of 2016 versus the entirety of 2017.
CONTROVERSIAL PICK TO LEAD EPA’S CHEMICALS OFFICE WITHDRAWS NOMINATION: Michael Dourson, chosen by Trump to lead the EPA’s chemicals office, has withdrawn his nomination after Republican senators said they would join with Democrats to oppose him.
Dourson notified the Trump administration he was removing himself from consideration for the position on Wednesday.
Chemicals conflict: Dourson, a toxicologist and University of Cincinnati professor, founded a consulting group that represented companies that produced chemicals now under EPA review for their public health risks. In that role, he has recommended lower safety standards for chemicals than the norm proposed by agency regulators.
Advisory role questioned: Even before he was confirmed, Dourson was already working at the EPA as a senior adviser to Administrator Scott Pruitt, to the consternation of many Democrats, who say that such a dynamic violates the law.
REPUBLICANS ‘NOT HIDING’ FROM ENERGY OPPORTUNITIES AFTER SCALEBACK OF UTAH MONUMENT: Rep. Chris Stewart, R-Utah, the author of a new bill to enshrine into law Trump’s rollback of the Grand Staircase-Escalante National Monument, said Thursday he is “not hiding” from drilling opportunities that may arise from its shrunken boundaries.
The land on which the monument sits in southern Utah has significant coal deposits.
Congress backs Trump: A subcommittee of the House Natural Resources Committee on Thursday morning debated Stewart’s bill, which would confirm the changes to Grand Staircase that Trump called for.
Grand Staircase-Escalante would be split into three areas: Grand Staircase National Monument, Kaiparowits National Monument, and Escalante Canyons National Monument.
The bill provides a management structure for the revised Grand Staircase-Escalante monuments and creates a new national park within one of them. The Escalante Canyons national monument would become a national park, the sixth in Utah, slated for about 100,000 acres, although the exact boundaries remain in flux.
‘Embracing’ energy development: Stewart’s bill explicitly would allow oil and natural gas drilling in the new monuments and national park.
“The intent is for these to be managed like any other federal lands,” Stewart said Thursday, acknowledging the energy opportunities. “I am not hiding from that. I am embracing that. Of course we are trying to make these resources available to the community so they have the opportunity that has been taken from them.”
WIND ADVOCATES EXPECT TO WIN BACK CREDIT IN REPUBLICAN TAX BILL: Wind and renewables advocates are optimistic they will win back tax credits in the reconciled version of the tax bill agreed to by House and Senate Republicans Wednesday.
Details are sparse, but Bloomberg reports the compromise bill keeps the wind production tax credit and electric vehicle credit that the House had tried to weaken or eliminate in its original legislation.
Midwestern Republicans such as Sen. Chuck Grassley of Iowa have vowed to save the wind tax credit, noting the growth of the wind industry in red states.
The wind industry has warned the House provision, which would reduce the wind tax credit to 1.5 cents per kilowatt-hour, from 2.4 cents, could eliminate more than half of the new wind farms planned for the U.S. The wind tax credit is scheduled to phase out in 2020, under a bipartisan deal reached by Congress in 2015.
Other fixes? Renewable groups are also concerned about a Senate provision called the “Base Erosion Anti Abuse Tax” that they say would threaten their ability to use tax credits for financing projects.
Renewables advocates said a solution is expected on that front as well, but it’s not final.
Sen. John Thune, R, S..D., tells Bloomberg that lawmakers are trying to address the issue to ensure renewables projects aren’t harmed.
Another contested House provision would eliminate the use of private-activity bonds that are used for construction of infrastructure projects, including “clean coal” initiatives such as carbon capture and storage projects. The Senate bill maintains use of the bonds.
MURKOWSKI CHEERS ANWR DRILLING IN FINAL TAX BILL: Sen. Lisa Murkowski, R-Alaska, chairwoman of the Senate Energy and Natural Resources Committee, celebrated the decision by House and Senate leaders to include a provision she has long sought allowing oil and gas drilling in the Arctic National Wildlife Refuge.
The final bill would permit drilling in a 1.57 million-acre portion of the Alaska refuge, known as the “1002 area,” with the expectation of raising $1 billion during the 10-year budget window, to help pay for tax cuts.
Fact check: Rep. Raul Grijalva of Arizona, top Democrat on the House Natural Resources Committee, expressed doubt Wednesday that drilling would raise the revenue Republicans reject.
He has asked the Congressional Budget Office to conduct a new estimate of revenue projections in ANWR after a recent lease sale in the nearby Alaska National Petroleum brought in fewer bids than expected.
CONGRESS FAR AWAY FROM WILDFIRE PREVENTION FIX AS BLAZES SWEEP CALIFORNIA: Congress is no closer to agreeing on a plan to try to reduce the risk of wildfires and fix a funding problem that challenges the federal response, more than a week after damaging fires in Southern California worsened a record wildfire season.
But as fires rage across the West, Congress has disagreed over how to help fund wildfire response and impose forest management changes that could prevent fires from starting.
Extended fire season: “Everyone thought the fire season was over this year, but obviously that’s not the case in Southern California,” Rep. Bruce Westerman, R-Ark., told the Washington Examiner. “If this doesn’t highlight the need for management reform, I don’t know what would.”
House progress: The House last month approved Westerman’s bill, the Resilient Federal Forests Act, which contains several changes intended to make fires less explosive. The legislation would allow the Forest Service to thin the trees in forests up to 30,000 acres using a shorter environmental review process under the National Environmental Policy Act.
Senate opposition: Several Senate Democrats who have their own proposals, such as Sen. Ron Wyden, D-Ore., oppose Westerman’s bill, arguing his approach weakens environmental reviews too much and encourages litigation against the Forest Service.
Meeting of the minds: Westerman, and Rep. Rob Bishop, R-Utah, chairman of the House Natural Resources Committee, met this week with Interior Secretary Ryan Zinke and Department of Agriculture Secretary Sonny Perdue, to discuss their options.
Nothing going: But Westerman says he is not aware of any “substantive” negotiations occurring between the House and Senate.
GAO: MILITARY TALKS UP CLIMATE CHANGE BUT DOES LITTLE TO ADDRESS COSTS: The Pentagon says climate change poses a risk to its overseas operations, but it is doing little to assess the costs of those effects such as sea-level rise and weather issues, a federal watchdog agency said Wednesday.
What are the risks?: The “operational risks” from climate change include training and mission interruptions, as well as the costs associated with repairing damage.
No information: “Without a requirement to systematically track such costs, DOD will not have the information it needs to integrate climate-related impact resource considerations into future budgets,” the report stated.
THE PROMISE OF ADVANCED NUCLEAR POWER COULD GET ‘EXPENSIVE’: The government’s role in advancing new nuclear power plant designs will get more expensive if the Trump administration and Congress are serious about moving the new reactors to market, the head of the nation’s nuclear energy watchdog told lawmakers Wednesday.
More technical, more ‘expensive’: “I think that going forward, we get to taking that framework and applying it to specific technical issues,” Svinicki said. “From a budgetary standpoint, that’s where it gets more expensive because then the labs need to be doing things, we need to be doing things, weighing in on their testing plans and data plans, and say if you collect this data will it be sufficient for us to make a regulatory determination.”
Industry’s future: The new designs the agency is working on certifying, and ultimately licensing, represent the future of the industry amid growing concerns about the premature retirement of the existing nuclear fleet’s reactors and the need for smaller, lower cost nuclear energy designs to replace them.
RUNDOWN
Reuters Anti-pipeline group goes back to work against Keystone XL
Bloomberg Russia wins in Arctic after U.S. fails to kill giant gas project
New York Times What Republicans think about climate change: in maps
Washington Post Fracking sites may raise the risk of underweight babies, new study says
Wall Street Journal OPEC oil output falls to six-month low but U.S. fills gap
Reuters China’s industrial heartland struggles in Beijing’s fight against smog
Bloomberg Loose cap caused blast in Austria that rattled energy market
Calendar
THURSDAY, DEC. 14
9:30 a.m., 1334 Longworth. The House Natural Resources Committee’s Federal Lands Subcommittee holds a hearing on the “Grand Staircase Escalante Enhancement Act.”
10 a.m., 600 14th St. NW. The Fund for Peace holds a discussion on “Beyond Oil, Gas and Mining: Experiences of Voluntary Principles Implementation in Different Sectors,” focusing on “practical tools for companies in the oil, gas and mining sectors to better manage their security arrangements and, in so doing, to respect human rights.”
FRIDAY, DEC. 15
9 a.m., 529 14th St. NW. The Inter-American Dialogue holds a discussion on “The Trump Administration, Latin America and Energy: Mexico, Natural Gas and Liquid Natural Gas Exports.”
thedialogue.org/event/the-trump-administration-latin-america-energy-mexico-natural-gas-lng-exports/
POSTPONED, 1225 I St. NW. Bipartisan Policy Center’s Conversation with FERC Commissioner Neil Chatterjee: The Grid Resiliency Pricing Rule.
bipartisanpolicy.org/events/conversation-with-ferc-commissioner-neil-chatterjee/
MONDAY, DEC. 18
3 p.m., 1616 Rhode Island Ave. NW. The Center for Strategic and International Studies’ Energy & National Security Program is hosting Peter Fraser, head of Gas, Coal, and Power Markets at the International Energy Agency, for the U.S. launch of the IEA’s Coal 2017: Analysis and Forecasts to 2022.
