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OPEC REACHES DEAL TO CUT OIL PRODUCTION, DEFYING TRUMP REQUESTS: OPEC agreed on Friday to an oil production cut of 1.2 million barrels per day in an effort boost falling prices, defying President Trump’s demands.

The deal came together on the second day of talks in Vienna after non-member Russia agreed to cuts, with OPEC providing most of the output reduction — 800,000 barrels per day — the oil cartel announced in press conference.

OPEC’s 15 members produce about 40 percent of the world’s oil, even as the U.S. has become the world’s biggest producer because of the shale boom.

What prompted action: Oil prices have fallen more than 30 percent since October after Saudi Arabia and Russia, the top two oil producers outside the U.S., began boosting output partially in response to complaints from Trump.

Trump worried about rising prices ahead of the midterm elections, given the potential damage to supply from his renewed sanctions on Iran’s oil exports.

Now, the world has a glut of oil supply because of the severe reaction by Russia and the Saudis to cover for Iran losses, which did not materialize as feared after the Trump administration granted exemptions allowing some countries to continue importing crude from Tehran.

Watching Trump: The new agreement could draw a reaction from Trump, who as recently as Wednesday prodded OPEC to continue pumping more oil to keep prices low.

Saudi energy minister Khalid al-Falih said Friday that the deal will be good for America.

“Low prices are not good for the U.S. economy,” he said. He also offered praise to Trump for paying attention to costs on consumers from higher oil and gas prices.

Good for Trump supporters?: Some oil analysts also said Trump should be cheering the OPEC deal to limit production. Lower prices could harm an important Trump constituency: The energy industry and states that rely on fossil fuel production.

“Ultimately it is also in the U.S. interest not to have too low a price, since depressed markets choke off investment and are a recipe for price spikes later on,” Antoine Halff, a senior research scholar with the Center on Global Energy Policy at Columbia University, told Josh.

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.  

RYAN ZINKE ANNOUNCES MASSIVE NEW OIL FIND: The U.S. Geological Survey announced Thursday that it discovered one the largest new sources of oil and natural gas under Texas and New Mexico.

Happy holidays: “Christmas came a few weeks early this year,” Interior Secretary Ryan Zinke said as he unveiled the new find. “American strength flows from American energy, and as it turns out, we have a lot of American energy.”

Zinke said the new assessment makes him even more bullish that “American energy dominance is within our grasp as a nation.”

How much? The new shale oil and gas formation, known as Wolfcamp and adjacent to the oil-rich Permian region in Texas, contains an estimated mean of 46.3 billion barrels of oil, 281 trillion cubic feet of natural gas and 20 billion barrels of natural gas liquids, according to the U.S. Geological Survey.

That means nearly five decades worth of oil coming from Texas’ shale regions at current production rates.

DOZENS OF LAWMAKERS SCOLD ZINKE OVER SEISMIC OIL SURVEYS: Florida Republican Rep. John Rutherford led a bipartisan letter signed by over 90 members of the House opposing the Trump administration’s planned use of seismic surveys off the Atlantic Coast to explore for oil deposits.

The letter was sent on Thursday to both Interior Secretary Ryan Zinke and Commerce Secretary Wilbur Ross urging them to not allow seismic testing in the Atlantic to move forward.

The letter is in response to last week’s approvals of five permits to companies conducting the surveys. The permits would allow the companies to harm marine mammals while conducting the surveys, which use air jet blasts and other methods to create a map of the sea floor’s fossil fuel deposits.

The lawmakers say the airguns used in the surveys pose significant harm to all sea life, including those that support local economies from Maine to Florida.

MEANWHILE…US BECOMES NET OIL EXPORTER FOR FIRST TIME IN 75 YEARS: The U.S. exported more oil and fuel than it imported last week for the first time in nearly 75 years, according to data released Thursday by the Energy Information Administration.

While the achievement may be a one-week blip, the Energy Department projects the U.S. will become a net energy exporter by 2022.

You can thank the shale boom: America has surpassed Saudi Arabia and Russia as the world’s top oil producer, with output expected to reach new record highs of 12 million barrels per day in 2019.

The surge comes as the Trump administration has promoted “energy dominance” by taking a lighter touch to regulation, proposing to weaken a number of Obama-era rules targeting fossil fuel development.

But the shale boom began under former President Barack Obama, who in 2015 signed a law passed by Congress ending a 40-year-old ban on oil exports.

US is still vulnerable to global events: The data proves the U.S. is much less dependent on oil imports than a decade ago. But European allies and competitors like China continue to rely on production from oil cartel OPEC, and with the U.S. economy dependent on the global economy, American consumers are still exposed to oil price shocks.

TRUMP’S COMING POWER PLAY ON OBAMA WATER REGS: The Environmental Protection Agency plans to roll out early next its proposal to weaken landmark Obama-era changes to the regulation of waterways.

“The previous administration’s 2015 rule wasn’t about water quality,” reads a talking points memo obtained by the New York Times ahead of next Tuesday’s announcement. “It was about power — power in the hands of the federal government over farmers, developers and landowners.”

Woe unto WOTUS: The new rule is Trump’s version of the Clean Water Rule, also known as the Waters of the United States rule, which became a GOP target after the previous administration used it to extend the EPA’s enforcement authority over both large and small bodies of water, including small tributaries and drainage ditches.

The Trump rule would shrink Obama EPA’s definition of a waterway to include only larger bodies of water, excluding smaller waterways that feed into them, according to environmental groups tracking the issue.  

Environmentalists are gearing up to fight hard against the proposed regulation, which will undergo a public comment period beginning later this month, according to the Times.

Environmentalists see a helping hand to industry: The new rule will “gut” water protections across the nation, the Natural Resources Defense Council said. The rule would both limit the scope of the Clean Water Act, and exempt many oil companies and industry from programs aimed at protecting rivers, lakes, streams and wetlands from degradation, according to the group.

FARM BILL EXPECTED TO DROP NEXT WEEK: The newly-negotiated text of the Farm Bill is expected to be released as soon as Monday and voted on next week, with everyone from utility companies to environmentalists champing at the bit to see what got included.

Conservation program intact: Environmental groups are looking for changes to the farming conservation program in the bill. The program encourages farmers to employ environmentally-friendly practices into their tilling, water and land management practices.

Collin Peterson, the top Democrat on the House Agriculture Committee, said earlier this week that the bill is nearly done and should be filed Monday. He also said that the number of acres under the bill’s conservation program funding will be increased.

The Environmental Working Group tells John that it is hopeful that the bill will support practices that protect water supplies by addressing fertilizer and pesticide runoff. There had been some concerns earlier on that the conservation program might be curtailed.

Utilities looking for more flexible loans: The rural utility industry wants the legislation to enact changes to the loan and grant programs at the Agriculture Department and other agencies to provide greater flexibility to help his utilities boost both energy and broadband infrastructure.

The utilities want a grid that can overcome outages and save customers money, while also being used to leverage broadband and telecommunications development.

The Farm Bill text will be released on Monday, with the House expected to vote on the major legislation on Wednesday. The Senate is expected to quickly follow suit with a vote on Thursday.

TRUMP ROLLS BACK SAGE-GROUSE PROTECTIONS, OPENING UP NEW AREAS FOR OIL DRILLING: The Trump administration on Thursday moved to roll back an Obama-era conservation plan to protect the threatened chicken-sized sage-grouse, a change that would allow for oil drilling on previously off-limit lands in the West.

Do birds and oil mix? The Interior Department made the decision in releasing the environmental impact statement of its plan to modify the 2015 sage-grouse protection agreement, which it said takes into account state concerns in factoring in changes that still seek to protect the bird, but allow for exceptions to drill for oil and natural gas.

“With today’s action, we have leaned forward to address the various states’ issues, while appropriately ensuring that we will continue to be focused on meaningfully addressing the threats to the Greater Sage-Grouse and making efforts to improve its habitat,” said Deputy Secretary of the Interior David Bernhardt.

Death by a 1,000 cuts: “If you allow exception after exception, that might make sense for a particular project in a particular spot, but you add them all together and you have death by a thousand cuts,” said Tracy Stone-Manning, vice president of the National Wildlife Association.

SCHUMER WARNS TRUMP THAT CLIMATE CHANGE MUST BE CENTRAL TO INFRASTRUCTURE BILL: Senate Minority Leader Chuck Schumer warned Trump on Thursday that a potential compromise on infrastructure legislation next Congress must contain provisions to promote clean energy and combat climate change.

“If the president wanted to earn Democratic support in the Senate, any infrastructure bill would have to include policies and funding that help transition our country to a clean-energy economy and mitigate the risks the United States already faces from climate change,” Schumer said in a Washington Post op-ed

The New York Democrat suggested several policies similar to what House Democrats laid out in their “Better Deal” proposal last year.

What he’s proposing: He said infrastructure legislation should include “massive” investments in renewable-energy infrastructure, especially in battery storage that can carry excess solar and wind energy for times when the sun is not shining the wind isn’t blowing. He called for permanent tax subsidies for storage and electric vehicles. Schumer also proposed investments in transmission to move renewable electricity around the country.

And he recommended the bill include measures that make communities more resilient to climate change, by building flood walls and toughening development standards, for example.

The bottom line: While these measures are unrealistic all together, Republicans support some of them, and these type of “small ball” provisions have a higher chance of success next Congress than a comprehensive climate change bill such as a carbon tax.

See Josh’s previous reporting explaining these possibilities.

INCOMING NATURAL GAS CHAIRMAN TALKS UP CLEAN ENERGY: “Natural gas will continue to be there when our customers need it and we are doing the necessary research and innovation to maintain natural gas as an essential part of a clean energy future,” Jim Torgerson, the incoming 2019 chairman of the American Gas Association, said on Friday at a press briefing introducing himself to reporters.

He begins his one-year term as chairman of the large natural gas group on Jan. 1, 2019.

The American Gas Association represents the natural gas distribution and utility companies that deliver the fuel to homes. Torgerson said more Americans are using natural gas now than ever before.

The shale boom has made natural gas the lowest-cost home heating fuel, in addition to fueling gas-fired power plants that now provide most of the the U.S.’s electricity demand.  

Torgerson is the CEO of the Connecticut-based AVANGRID, which supplies natural gas as well as electricity generated by renewable energy resources, with a presence in 22 states.

RUNDOWN

New York Times US oil exports are increasing. So is the trade deficit.

Wall Street Journal New OPEC president starts with a disadvantage: He’s from Venezuela

Politico Democrats get on board with Manchin for energy committee post

Reuters GE’s push to fix power turbine problem goes global

SPONSOR MESSAGE: In 2018 the United States continued to drill its way toward energy independence. With the country now producing record-setting amounts of oil and natural gas, the need for infrastructure to transport those resources – from the Bakken, Marcellus, and Permian shale formations all the way to New England – is more important than ever. Fortunately, midstream projects such as the now-complete Rover Pipeline and expanding Dakota Access Pipeline are setting the stage for safe and efficient energy transportation across the U.S. GAIN is hopeful that 2019 will be another momentous year for American energy. To learn more head to www.gainnow.org or follow us @GAINNowAmerica.