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SONNY PERDUE VS. SCOTT PRUITT ON ETHANOL WAIVERS: Agriculture Secretary Sonny Perdue is taking issue with the waivers that Environmental Protection Agency chief Scott Pruitt is handing out to oil refiners so they can avoid blending ethanol.

“At USDA, we’re going to hold very firmly to the fact that if we have an [renewable volume target], it ought to be an honest number, and not one that has a leak out the back door with waivers that are not accounted for,” Perdue said in a recorded interview Tuesday night.

Waivers for refiners: Pruitt has given dozens of waivers to oil refiners to help them contend with the high cost of Renewable Identification Number credits, which a large segment of the industry has to buy to meet the Renewable Fuel Standard.

Mounting opposition: Perdue’s comments echo those coming from Capitol Hill, farmers and the ethanol industry, opposing Pruitt’s management of the ethanol program at the EPA, which was capped on Tuesday by EPA issuing the renewable fuel blending targets for 2019. The proposal does not make up for the 1.5 billion gallons of ethanol that were lost because of the refinery waivers.

Even though the 2019 targets are higher than the current year, they are misleading if Pruitt continues issuing the waivers, critics argue.

GRASSLEY SUGGESTS PRUITT BREAKING THE LAW IN GRANTING ETHANOL WAIVERS: Sen. Chuck Grassley, the chairman of Senate Judiciary Committee, said Tuesday that Pruitt may be breaking the law by granting the waivers in “secret.”

“As chairman of the Senate Judiciary Committee, I also have concerns that EPA may be ignoring or abusing the Administrative Procedure Act as they continue to grant waivers in secret and refuse to respond to congressional oversight and public information requests regarding the practice,” the Iowa Republican said.

“The public’s business ought to be public, and hiding behind bureaucracy and poor excuses isn’t going to work,” Grassley said.

EPA STOKES ETHANOL INDUSTRY’S IRE WITH 2019 FUEL TARGETS: The EPA is proposing to increase the amount of renewable fuel in the nation’s fuel supply next year, but it won’t be enough to satisfy the ethanol industry.

The EPA is proposing to increase the amount of renewable fuel in the nation’s gasoline supply by 590 million gallons in 2019, the agency announced Tuesday.

The new numbers: The amount of corn ethanol allowed to be blended under the Renewable Fuel Standard will be kept at its maximum of 15 billion gallons, while the agency is increasing the amount for all biofuels from 19.29 billion gallons in 2018 to 19.88 billion gallons in 2019.

Don’t mean nothing: Nevertheless, ethanol supporters immediately came out slamming the proposal, saying it doesn’t mean much if the EPA continues to allow refiners to be exempt from blending ethanol to save money.

“The ethanol number isn’t worth the paper it’s written on so long as Scott Pruitt is granting small refinery exemptions left and right — even beyond what the Department of Energy recommends,” said Monte Shaw, the head of the Iowa Renewable Fuels Association. “This is a status quo proposal for ethanol and the status quo is bad.”

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PRUITT WANTS TO LIMIT EPA’S POWER OVER PERMITS TO DUMP WASTE INTO WATERWAYS: Pruitt on Wednesday morning proposed limiting his agency’s authority to veto permits for companies that want to dump waste into waterways.

For the last 40 years, the Clean Air Act has allowed the EPA to reject approvals issued by the Army Corps of Engineers to discharge waste into waterways. The EPA can use its veto authority retroactively or before a developer applies for a permit from the Army Corps.

‘Due process’ concerns: Pruitt argues that practice hinders development projects and discourages economic development.

“Today’s memo refocuses EPA on its core mission of protecting public health and the environment in a way that is fair and consistent with due process,” Pruitt said. “We must ensure that EPA exercises its authority under the Clean Water Act in a careful, predictable and prudent manner.

Dangerous move: Environmental groups criticized the EPA’s move, calling it dangerous.

The EPA is “giving up 40-year-old authority to uphold [and] enforce the Clean Water Act to safeguard drinking water for all Americans,” said John Walke, the clean air director of the Natural Resources Defense Council.

Limited, but powerful, use: The agency has used the authority to block or restrict development only 13 times in its history, the Wall Street Journal reported, but Pruitt contends it is vulnerable to abuse. Most recently, the Obama administration used the power to deny a permit for a proposed gold mine in Alaska’s Bristol Bay, known as Pebble Mine.

Time for public comments: Pruitt’s new proposal is subject to a public comment period before being finalized.

SUPREME COURT SIDES WITH FLORIDA OVER GEORGIA IN WATER FIGHT: The Supreme Court ruled Wednesday that Florida has sufficient claims in a decades-old fight with Georgia over the water it gets from the Apalachicola-Chattahoochee-Flint River Basin.

Fight goes on: But the fight will continue until a special master appointed by the court can verify Florida’s claims that it needs more water from the basin, which the court found plausible in Wednesday’s ruling.

‘Too strict’: The 5-4 decision ruled that the court’s “Special Master” used “too strict a standard” in concluding that Florida had failed to meet its initial burden of demonstrating that the high court could “eventually fashion an effective equitable decree” in favor of its water rights.

More evidence: “Further findings … are needed on all of these evidentiary issues,” Justice Stephen Breyer wrote for the majority. “Florida will be entitled to a decree only if it is shown that ‘the benefits of the [apportionment] substantially outweigh the harm that might result.’”

A long fight: The two states have been fighting for decades over the use of water in the Apalachicola-Chattahoochee-Flint River Basin that begins in northeast Georgia. A plan was established in 1958 to distribute the water, with Georgia getting 74 percent, Florida getting 11 percent, and Alabama 15 percent.

ZINKE REDACTS POLITICAL SPEECH IN SOCKS PHOTO TO AVOID VIOLATING ETHICS RULES: Interior Secretary Ryan Zinke is becoming more sensitive to federal ethics rules governing campaign endorsements, tweeting a corrected photo of his new President Trump-themed socks with the campaign slogan blacked out.

“Earlier I tweeted a pic of my new socks not realizing it had what could be viewed as a political slogan,” Zinke tweeted on Tuesday, alluding to the Hatch Act, which bars Cabinet-level officials from political activity.

“I’ve deleted it and apologize for the mistake,” Zinke continued. “I remain excited about all the incredible policy work POTUS is doing.”

DIVERSE GROUP BACKS TRUMP’S BID FOR NUCLEAR BAILOUT: A group of 75 former senators and military officials, Democrats and Republicans alike, are calling on Energy Secretary Rick Perry to support President Trump’s push to save the nation’s financially struggling nuclear power plants as a matter of national security.

“We write to commend you for recognizing the important role our civil nuclear energy sector plays in bolstering America’s national security,” the letter sent to Perry Tuesday reads.

“We urge you to continue to take concrete steps to ensure the national security attributes of U.S. nuclear power plants are properly recognized by policymakers and are valued in U.S. electricity markets,” the letter continued.

Noteworthy Democrats: Steve Koonin, President Barack Obama’s former head of science at the Energy Department, signed the letter, as did former Democratic Sen. Byron Dorgan of North Dakota and former Republican Sen. Trent Lott of Mississippi.

Noteworthy GOP leadership: Dale Klein, former Republican chairman of the Nuclear Regulatory Commission, was also on the letter.

Who’s who of industry and defense: Former military officials and industry CEOs also joined. Those included: Daniel F. Akerson, former chairman and CEO of General Motors, Norman Augustine, the former undersecretary of the Army and former CEO of Lockheed Martin, Admiral Frank L. “Skip” Bowman, former director of Naval Nuclear Propulsion, and Linton Brooks, former administrator of the National Nuclear Security Administration.

The bailout is receiving some big pushback by the oil and natural gas industry, the renewable energy industry, segments of the utility sector, and free-market conservative groups.

The bailout likely would provide market-based incentives to help nuclear and coal power plants stay afloat amid increased competition by low-cost natural gas and renewable power plants.  

TRUMP MEETS WITH WEST VIRGINIA GOVERNOR ON COAL BAILOUT: Trump met with West Virginia Gov. Jim Justice, a Democrat turned Republican, in the Oval Office Tuesday to discuss the president’s plan to subsidize money-losing coal plants, the governor said.

Justice referred to potential action to save coal plants as the “Trump-Justice Coal Plan,” saying it would “protect our miners” and “grow additional mining jobs.”

Fear the lack of coal: He used Trump-esque language to describe the consequences of doing nothing, saying the nation’s security depends on around-the-clock coal.

“The Trump-Justice Coal Plan could very well provide the opportunity for thousands of miners to go back to work,” Justice said. “Also, this plan insures the nation against a potentially catastrophic terrorist event that would completely cripple the Eastern power grid.”

Consequences: The vast majority of the energy industry says making grid operators buy power from coal and nuclear plants would damage competitive power markets and raise electricity rates for consumers.

PERRY DISCUSSES NORD STREAM 2, SANCTIONS WITH RUSSIA: Perry on Tuesday discussed Russia’s plan to expand the controversial Nord Stream gas pipeline to Europe with Russian Energy Minister Alexander Novak.

Novak, in a press briefing, said he also talked U.S. sanctions during a meeting Tuesday with Treasury Secretary Steven Mnuchin. Congress has imposed sanctions in recent months against Russia, some of which aim to stop companies from participating in Russian pipeline projects and oil and gas development.

Met, saw, conquered: “We met. We discussed energy issues, among other things. We touched upon questions related to sanctions,” Novak said, according to Reuters. “We can’t sidestep these difficult questions, so of course we touched upon them during our contact.”

Pipeline threat: The U.S. opposes the Nord Stream 2 pipeline project that would transport natural gas from Russia to Germany, arguing it would threaten stability in the region.

Russia is a top supplier of natural gas to Europe, which the Trump administration is seeking to change by encouraging the export of U.S. natural gas to the continent now that America the top producer of the fuel.

‘Reliable’ energy markets: The Energy Department provided a more generic readout of Perry’s meeting with Novak, saying the two leaders discussed “the importance of continued a dialogue to promote stable, reliable, and transparent energy markets.”

CANADIAN ENERGY MINISTER POKES U.S. ON TRADE: Jim Carr, Canada’s minister of natural resources, contrasted his country’s trade policies with the U.S. Tuesday, encouraging more cross-border transfer of natural gas.

“Canada is open for business and open for trade,” Carr told thousands of energy industry representatives at the World Gas Conference in Washington Tuesday.  “It supports what you do.”

Contrast with U.S.: Carr’s comments came after the chiefs of major American oil and gas companies expressed concern at the conference about the Trump administration’s protectionist trade agenda, saying tariffs could curb economic growth.

Canada, meanwhile, is “poised” to be a world leader in export of liquefied natural gas, Carr said, because the “world needs LNG natural gas to displace less clean fuel worldwide.”

JAPANESE LIBERALS LOOK TO CUT A NUCLEAR DEAL: Members of Japan’s out-of-power liberal party on Tuesday discussed changing up Japan’s 40-year-old nuclear energy agreement with the United States.

Capitol Hill talks: The Japanese delegation raised a host of concerns with the 14 House and Senate members they met with in Washington, covering everything from nuclear waste to Trump’s pursuit of a nuclear energy agreement with Saudi Arabia to the nonproliferation challenges facing any deal with North Korea.

‘Strange’ reception: The delegation also tried to score a meeting with the State Department, but were unsuccessful.

They have been in Washington several times in the last year because Japan is renewing its agreement with the United States on nuclear energy cooperation.

In previous visits, the administration always accommodated their request to meet, but this time was “strange,” said a representative for the Japanese delegation. “They refused to meet us,” the representative said, attributing it to the Trump administration reaching a “sensitive stage” in negotiations with North Korea.

Interest has waned: “When we came in February, that was when the negotiations with Saudi had begun and interest was higher,” the representative said.

No more reprocessing: The Japanese House members, at least with the liberal Constitutional Democratic Party, don’t want to reprocess spent nuclear fuel any longer under the 40-year-old nuclear agreement.

But conservatives say yes: But the conservative Constitutional Democratic Party, to which Prime Minister Shinzo Abe belongs, says the country will go forward under the prior U.S. agreement and use recycled nuclear fuel, which also produces plutonium as a byproduct.

JAPAN’S APPETITE FOR NUCLEAR ENERGY WANES: Japan’s Constitutional Democratic Party members say the public does not support nuclear power after the Fukushima nuclear disaster in 2011 and does not support moving forward with the current agreement, which calls for burning plutonium and other recycled nuclear fuels in specialized devices called MOX reactors.

47 tons of plutonium: The MOX reactors use the plutonium that comes from nuclear fuel reprocessing. Instead of burning the 47 tons of plutonium in Japan, they would much rather have the U.S. take control of the bomb-making material and dispose of it.

Trump deal with North Korea: That may even ease North Korea’s concerns about Japan’s bomb-making potential as the Trump administration negotiates denuclearizing North Korea, according to Japanese officials.  

Saudi Arabia deal, too: One of the reasons the Japanese lawmakers are in Washington is because Trump wants to negotiate a nuclear energy agreement with Saudi Arabia. The lawmakers have issues with Japan being used as an example of the kind of deal to avoid.

Gold standard: Members of Congress and others fear Saudi Arabia could make a bomb if strict limits on plutonium development are not put into place referred to as the “Gold standard.”

OIL PRICES RISE AS TRUMP ADMINISTRATION WARNS OF SANCTIONS: Crude oil prices are rising after a State Department official told reporters Tuesday that the U.S. has no plans to issue waivers on sanctions to Iran’s oil customers and expects countries to stop imports by Nov. 4.

The U.S. expects all countries to cut oil imports from Iran to “zero” by November or risk sanctions cutting their access to U.S. markets and financial institutions, said a senior State Department official, who briefed reporters on the condition of anonymity.

National security rationale: “We view this as one of our top national-security priorities,” the official said.

He said U.S. officials are visiting European and Asian countries to warn them to cut off their oil imports from Iran.

Price spike: The U.S. benchmark crude oil price quickly topped $70 per barrel Tuesday for the first time since May, after news spread of the administration’s zero-tolerance approach to sanctions.

The reimposition of sanctions is a result of Trump last month abandoning the Iran nuclear deal, in which Tehran agreed to constrain its nuclear program in exchange for restored business and financial ties to the world economy.

Energy experts have warned that oil prices would rise if Trump renews oil sanctions on Iran. OPEC agreed to boost oil production Friday to head off rising oil prices, as some key producers, such as Venezuela, Iran, and Libya, face output constraints.

CARBON CAPTURE COALITION ADDS TWO NEW MEMBERS FROM STEEL INDUSTRY: A coalition promoting the development of carbon, capture and storage projects added two new members, the group announced Wednesday morning.

Two steel industry leaders, manufacturer ArcelorMittal and union United Steelworkers, joined the Carbon Capture Coalition.

‘Win-win’ for steel: “The addition of the world’s largest steelmaker and North America’s largest industrial union to the coalition demonstrates that carbon capture can be a ‘win-win’ for the steel industry,” said Jeff Bobeck, co-director of the Carbon Capture Coalition and director of energy policy for the Center for Climate and Energy Solutions. “Carbon capture provides a critical path to reducing steelmaking’s greenhouse gas emissions, while the construction of new capture projects of all sizes will boost demand for steel and steel jobs.”

Broad membership: The Carbon Capture Coalition is a rebranded and larger version of the six-year-old National Enhanced Oil Recovery Initiative that focused on projects that capture carbon to extract crude oil from wells.

Other members include the National Audubon Society, Bipartisan Policy Center, ClearPath Foundation, Shell, Mitsubishi Heavy Industries America and the National Farmers Union.

RUNDOWN

Bloomberg A threat to shale’s dominance emerges 200 miles off the Gulf Coast

New York Times GE to spin off healthcare division to focus on energy

Washington Post Across from Washington’s estate, a fight between natural gas and a historic view

Reuters Israel hopeful about second offshore gas auction