Daily on Energy: The Trump administration struggles with regulatory rollback math

Chiefly, Trump officials don’t seem to be able to get the math to work for some of the administration’s biggest environmental regulatory rollbacks. If they don’t figure it out soon, the White House’s promise to undo signature Obama-era climate and air pollution regulations before the November election will fall flat.

Fuel economy is the thorn in Trump’s side: Economists, environmentalists, and even some automakers ridiculed the Trump administration’s initial cost-benefit analysis it used to justify its proposal to freeze fuel economy limits at 2020 levels.

The analysis made assumptions about car prices and consumers’ driving habits that made no sense, and it misstated correlations between fuel efficiency and passenger safety, those critics said.

And career employees at the Environmental Protection Agency, largely shut out of developing the proposal, laid out in detail in documents in the rulemaking docket how the analysis was riddled with errors. Those employees found that instead of making vehicles safer, as the Trump administration has claimed, the proposal to freeze the standards would increase the rate of traffic fatalities, not to mention cost consumers more.

Going back to the drawing board hasn’t really helped: The White House has hit a dead end. In fact, as they’re crunching the numbers, they’re getting the opposite result of what they want: The costs of the rollback are greater than the benefits.

Draft documents obtained by Senator Tom Carper’s office say the White House’s final rule — which would require only a slight, 1.5%, year-over-year increase in fuel economy — would cost consumers at least $34.4 billion.

No matter how the Trump administration officials crunch the numbers, they’re finding that even though new car prices would be lower under a rollback, additional fuel costs would far outweigh those initial savings, according to a recent report from the New York Times. The analysis has been sent back to the Transportation Department again, the Times report says, though it isn’t clear whether they can fix the issues.

This isn’t even counting the climate costs: The Trump administration has downplayed the economic impacts from additional greenhouse emissions its fuel economy proposal would cause — something its critics are bound to focus on in the eventual legal battle over the rollback.

The Rhodium Group, for example, in recent analysis found even a 1.5% year-over-year increase in fuel economy would reduce emissions by only about one-fifth of what the Obama-era limits would have achieved. The Obama rules would have ultimately required a 5% year-over-year increase in fuel efficiency.

The Trump administration’s plans would cut transportation emissions by 143 million metric tons by 2035, compared to the nearly 800 million metric ton reduction the Obama administration’s standards would have led to by that point.

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.

CORONAVIRUS’ LONG-TERM EFFECT ON GLOBAL ENERGY DEMAND: There are more signs the coronavirus outbreak will slow global energy demand for the rest of the year. The Energy Information Administration on Tuesday revised its global liquid fuels consumption forecast, projecting demand will average 101.7 million barrels per day in 2020. That is 378,000 barrels per day less than what EIA forecast in January.

This latest projection comes after the International Energy Agency last week, citing the coronavirus, cut its oil demand growth forecast for the year by 365,000 barrels per day to 825,000 barrels per day, which would be the lowest rate of growth since 2011.

EIA attributes the slowdown in fuels consumption to reduced economic activity in China, where coronavirus originated, along with lower-than-expected use of heating fuel across the Northern Hemisphere due to a warm winter.

China’s demand for petroleum and liquid fuels will fall by an average of 190,000 barrels per day this year, EIA projects, due to less use of jet fuel because of flight cancelations, and a broader reduction in demand for transportation fuels.

ALEXA, ADD CLIMATE INNOVATION TO MY SHOPPING LIST: Amazon CEO Jeff Bezos says he’ll spend $10 billion to help curb climate change, joining the ranks of billionaires pledging portions of their own fortune to climate and clean energy research.

The Amazon founder announced the creation of the Bezos Earth Fund in an Instagram post Monday, though he was light on details beyond saying it would be a global initiative funding scientists, activists, and NGOs and would issue its first grants in the summer.

Bezos’s pledge isn’t likely to get his own employees off his back: A group of employees has been urging Amazon to more seriously commit to addressing climate change, by getting out of the oil and gas business and realigning its political donations and lobbying. Earlier this year, several leaders of that group, Amazon Employees for Climate Justice, said they were warned they could be fired if they continued to speak out.

The group’s response to Bezos’s announcement: That’s nice, but not enough — especially when, they say, Amazon funds think tanks that question climate science and partners with oil and gas companies to digitize the exploration and development of new fossil fuel reserves.

“The international scientific community is very clear: burning the oil in wells that oil companies already have developed means we can’t save our planet from climate catastrophe,” the group said in a statement. “We applaud Jeff Bezos’ philanthropy, but one hand cannot give what the other is taking away.”

TRUMP SANCTIONS RUSSIAN OIL GIANT: The Trump administration announced new sanctions Tuesday against Russia’s biggest oil producer and an executive at the company over its operations in Venezuela.

The Russian energy giant Rosneft’s trading arm has handled over half the oil coming out of Venezuela and through a variety of “ruses,” such as ship-to-ship transfers that conceal the oil’s origin, actively helping the country evade sanctions, the administration alleged. The sanctions are aimed at “putting everyone on notice that that kind of evasion will not be tolerated,” a senior administration said is a call with reporters.

The Trump administration had been mulling action against Russian-owned oil brokerage firm Rosneft Trading SA and chairman Didier Casimiro since at least early February as part of a maximum pressure campaign designed to hasten President Nicholas Maduro‘s retreat from office.

FAMILIAR FACE TO BE EPA’S NEW CHIEF OF STAFF: Mandy Gunasekara is poised to rejoin the EPA as its chief of staff pending a White House review, Josh has confirmed.

Gunasekara is a former senior EPA official who left in February 2019 to launch a nonprofit called Energy 45 to promote Trump’s energy agenda and counter the principles of the liberal “Green New Deal.” She was EPA’s principal deputy assistant administrator for the Office of Air and Radiation.

In that role, Gunasekara described herself as the “chief architect” of the Trump administration’s move to withdraw from the Paris climate accord, as well as a key official involved in the EPA’s repeal and eventual replacement of the Obama-era Clean Power Plan.

Gunasekara would replace Ryan Jackson, who is leaving his chief of staff position to join the National Mining Association.

INNOVATING FOR A LOW-CARBON FUTURE: Propane producers don’t see their industry as inconsistent with a net-zero greenhouse gas emissions future. In fact, they see new technologies as the key to ensuring their fuel can help the world get there.

“We are just now beginning to stitch the story together,” said Tucker Perkins, president and CEO of the Propane Education & Research Council. “We really are the fuel of choice, and when the conversation is very narrowly defined to impact on the climate, we can keep the conversation on propane. Easily.”

Perkins told Abby he sees a future in which propane can help decarbonize hard-to-reach sectors like heavy-duty transport and shipping, as well as play a bigger role in producing power. He also eventually wants to decouple the propane industry from fossil fuel production.

It’s a big challenge, though: Currently, most propane in the U.S., the world’s largest producer and exporter of the fuel, is made as a byproduct of processing natural gas. Propane also often gets lumped together with dirtier fuels in policy discussions, something industry advocates are trying to remedy.

More on the propane industry’s fight for a place in a low-carbon future in Abby’s piece in this week’s Washington Examiner magazine.

POMPEO’S PLEDGE FOR EUROPEAN ENERGY SECURITY: Secretary of State Mike Pompeo announced this weekend a $1 billion commitment from the U.S. to help build energy infrastructure in Central and Eastern Europe.

“Our aim is quite simple: It is to galvanize private sector investment in the energy sector to protect freedom and democracy around the world,” Pompeo said during an address at the Munich Security Conference.

The U.S. is giving money through the International Development Finance Corporation to the Three Seas Initiative, a program launched by Central European leaders in 2016 to accelerate the development of cross border energy, transport, and digital infrastructure. It is designed to strengthen the region’s energy security by diversifying sources of supply to counter Russian and Chinese influence.

The Rundown

Wall Street Journal Can solar power compete with coal? In India, it’s gaining ground

Washington Post The EPA is about to change a rule cutting mercury pollution. The industry doesn’t want it.

Los Angeles Times Would a California takeover of PG&E make energy cheaper and safer? Maybe not

Financial Times Climate change: can the insurance industry afford the rising flood risk?

Bloomberg Climate change is reshaping Atlantic fisheries and sending this fluke fight to court

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