PERRY LOOKING ‘VERY CLOSELY’ AT COLD WAR-ERA LAW TO SAVE COAL, NUCLEAR: Energy Secretary Rick Perry said Wednesday morning that he is looking “very closely” at using a 68-year-old Cold War-era law to save coal and nuclear plants.

“We are looking at a number of ways to approach this,” Perry said in testimony before the House Science, Space and Technology Committee. “I know the Defense Production Act is one of those ways to address that. We are looking at that very closely as well. Having resilience and reliability to our grid is as important to our national security as anything I can think of.”

• War-time law: The Defense Production Act of 1950 allows the president to nationalize private industry to ensure the U.S. has resources needed during a war or after a disaster. It is meant to ensure supply of critical industrial materials for security.

• Pressure from Congress: Sen. Joe Manchin, a Democrat from the coal state of West Virginia, and other lawmakers representing coal and nuclear states, have urged Perry to invoke the law in response to planned plant closures.

“I am very concerned about the challenges nuclear plants in my state face,” Rep. Conor Lamb, D-Pa., said at the hearing. “You have a partner here looking for other solutions.”

Energy experts say invoking the Defense Production Act would stretch the law beyond what it’s meant for because there is no imminent national security threat from coal and nuclear plants closing.

• Alternative bid: Perry said Wednesday he is considering using the law as an alternative to granting a petition from Ohio utility FirstEnergy to declare an emergency under Section 202(c) of the Federal Power Act to keep its financially struggling coal and nuclear plants from closing.

FirstEnergy wants the Energy Department to force PJM Interconnection, the nation’s largest federally overseen grid operator, to enter into contracts with coal and nuclear plants across its 13-state region to provide electricity “as needed to maintain the stability of the electric grid.”

• ‘Looking for solution’: Perry reiterated he is “looking for a solution” to the fading fortunes of legacy power sources.

The Trump administration argues that as retiring coal and nuclear plants, which operate around the clock, are replaced by natural gas and renewables, the grid may struggle to provide power quickly during an extreme weather event or other emergency.

“I am looking for a solution,” Perry said. “I am looking for results.”

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.

TRUMP FINALLY REACHES ETHANOL DEAL, BUT QUESTIONS LINGER: President Trump emerged from Tuesday’s talks about the nation’s Renewable Fuel Standard with a deal that would satisfy both ethanol producers and oil refiners.  

“After several meetings and input from stakeholders on both sides, President Trump is pleased to announce that a final decision has been made that allows E15 to be sold year-round, while providing relief to refiners,” White House spokeswoman Lindsay Walters said in a statement to the Washington Examiner.

“This outcome will protect our hard-working farmers and refinery workers,” she said.  

• Cruz plan is dead: Trump appeared to nix Texas Republican Sen. Ted Cruz’s plan for placing a cap on the price of ethanol credits.

• Trump goes with exports: Instead, Trump chose to do something a little more radical that corn farmers might actually like by focusing on ethanol exports.

• China? Ethanol exports, which have been harmed by Chinese retaliation to Trump’s tariffs, would be boosted in a way that would increase ethanol credits for the refiners. The supply of credits would be increased, which would reduce the cost. In the past, exports would lose their renewable identification number credits when shipped overseas.

• Year-round E15: On top of that, Trump plans to increase the market for ethanol year-round. That will be done by allowing 15-percent ethanol fuels be sold 12 months a year and not subject to summer restrictions under Environmental Protection Agency rules.  

• Iowa senator has questions: Sen. Joni Ernst, R-Iowa, who was at the meeting, said she was happy about the E15 part of the deal but had questions about the export part.

• Didn’t Pruitt say no? She said EPA Administrator Scott Pruitt committed to not pursue the export piece of the deal in a letter sent to her in October.

“While I am still assessing the full implications of the president’s notion to attach Renewable Identification Numbers (RINs) to exported ethanol, an idea Administrator Pruitt committed to not pursue in a letter last October, I am pleased that the president did not move forward with a RIN cap that would have destroyed demand, hurting both farmers and biofuel producers,” she said.

COUNTRIES SEEK WAIVERS TO BUY IRANIAN OIL: South Korea said Wednesday it would seek to obtain an exemption from the U.S. to buy Iranian oil, in what could be the first in a flurry of diplomatic activity after Trump announced he would withdraw from the Iran nuclear deal and reimpose sanctions.  

While new U.S. sanctions will target Iran’s oil and shipping sectors, the Trump administration said there will be a six-month “wind down” period “to allow companies to end contracts, terminate business, [and] get their money out.”

• ‘Minimize damage’: South Korea’s Ministry of Trade, Industry and Energy said it planned “to minimize the damage” to its companies, saying it would seek an exemption from sanctions, according to Reuters.

Japan may do the same.

• French project at risk: Also pursuing a waiver could be France’s Total SA, which which buys Iranian crude for its refineries.

Total has been the only major Western energy company to invest in Iran since sanctions were lifted, pledging to spend $1 billion at the giant South Pars gas field. CEO Patrick Pouyanne has said Total will withdraw from the project if it doesn’t get a waiver. Total declined to comment about the new sanctions late Tuesday.

• Iran’s market: Iran is the third-largest oil producer in OPEC. Its exports of crude oil and condensates from have surged since sanctions were lifted in 2016. More than 60 percent of Iran’s oil exports go to Asia, with China, India, Turkey, and South Korea being the largest purchasers. The U.S. imports no Iranian crude.

Saudi Arabia, the largest OPEC producer, said Tuesday it would “work with major producers within and outside OPEC as well as major consumers to mitigate the impact of any potential supply shortage.”

OIL PRICES RISE SLIGHTLY AFTER TRUMP’S IRAN DECISION: What began in the U.S. after Trump’s Iran announcement continued in Asia as oil futures and energy stocks rose, but not by much, amid an otherwise uneventful day of trading.

Trump announced Tuesday that the U.S. would be pursuing new sanction measures against the Iranian regime. The uncertainty surrounding potential retaliation and supply disruptions forced many of the indexes to list higher future prices for crude oil.

Platts reported crude oil futures rising in the early afternoon of Asian trading on Wednesday.

• Bumps: By noon, Singapore time, Brent crude futures for July delivery were up $1.84 per barrel from Tuesday’s final mark of $76.74 per barrel, while NYMEX crude futures for June delivery of light sweet crude oil were up $1.59 per barrel from Tuesday’s final price of $70.65 per barrel.

• Last year would have been worse: An economic analysis put out Wednesday morning by Exotix Capital, a global investment firm specializing in developing markets, showed that the threat from spiking oil prices would have been worse last year when prices were about $25 lower.

• Oil exporters fare best: Still, countries focused on oil exports will fare much better in the time of uncertainty, compared to those countries that are dependent on imported crude oil, according to Exotix. That could make things rosier for the U.S. and several South American exporters.

ENERGY ‘CHALLENGE’ RAISED AT STATE DEPARTMENT AHEAD OF TRUMP’S IRAN DEAL WITHDRAWAL: State Department senior officials made sanctions policy their top concern during a meeting of a key advisory panel in late March ahead of Trump’s Tuesday decision to withdraw from the Iran nuclear deal.

Members voiced concerns over the effects of sanctions on energy as an ongoing challenge despite many large industries being ready to weather the effects, according to minutes from the meeting obtained by John.

The Advisory Committee on International Economic Policy is one of the only groups of advisers charged with making recommendations on whether sanctions are good or bad.  

• Economy tied to national security: The committee’s sanctions subcommittee was front and center at its March 28 meeting, with Assistant Secretary of State for Economic and Business Affairs Manisha Singh leading the discussion, underscoring that “for the U.S. government, economic security is national security, and the government takes a comprehensive and coordinated approach on economic security issues, including sanctions,” according to the minutes.

• Energy discussion: A member of the committee noted that “large companies have a clear understanding of sanctions policies,” especially under the Countering America’s Adversaries Through Sanctions Act.  

Nevertheless, there are still concerns about what will happen on energy under sanctions.

• Ongoing challenge: The advisers didn’t appear to be talking about Iran directly, but one member noted that secondary sanctions, “and their effect on the energy sector, can be an ongoing challenge.”

• Probing impact to small business: “State Department officials also asked the Sanctions Subcommittee to consider sanctions effects on U.S. small-to-medium sized enterprises, in particular,” according to the minutes.

The committee is set to meet again on May 16. The group is composed of an array of businesses, including oil companies, agribusiness, tech companies and NGOs.

COAL BARON BLANKENSHIP FINISHES THIRD IN WEST VIRGINIA GOP PRIMARY: West Virginia Attorney General Patrick Morrisey took home the GOP nomination for Senate from the state Tuesday night, defeating bombastic energy baron Don Blankenship and Republican Rep. Evan Jenkins.

Blankenship, a multi-millionaire, was released from prison last year for his role in the Upper Big Branch Mine explosion that killed 29 back in 2010.

• Key for GOP: Morrisey led 28 states in their fight against President Barack Obama’s Clean Power Plan. He will now take on Democratic en. Joe Manchin in November in a fight Republicans are hopeful about.

ENERGY DEPARTMENT SEEKS BIDS FOR SMALLER COAL PLANTS: The Energy Department embarked on its latest effort to save ailing coal on Tuesday, asking companies to help the government develop small-scale coal plants, requesting industry input on the concept, with a comment deadline of June 8.

• Fast acting: The nation’s current coal plants are big and not easily turned off or on.

The Energy Department says the smaller plants could be fired up more quickly than bigger ones, giving them a place on the nation’s energy grid that is increasingly dependent on intermittent wind and solar power.

• Competitors beckon: Alison Silverstein, an energy consultant and former FERC staffer who helped write an Energy Department study last year on the health of the power grid, said the agency’s plan to pursue small-scale coal plants could be a good idea if such technology can produce fewer carbon dioxide emissions.

But she doubts such plants could compete financially with competitors.

“DOE has a long and successful track record at decades-long technology R&D [research and development] culminating in commercially successful technologies (including fracking, gas turbines, wind, and storage) and every one of those started with an idea about how to turn an uneconomic fuel source into a viable product,” Silverstein told Josh.

“It could work again with coal and I hope the RFI specifies extraordinarily low air emissions as part of the small size requirement. But it’s hard to see how the high cost of coal extraction and transportation make it competitive with wind, solar, efficiency and natural gas, even with a super-spiffy new power plant technology.”

SENATORS VOW TO NOT FORGET PUERTO RICO: Senators in both parties said Tuesday they worry that federal authorities may be too quick to declare “mission accomplished,” as the U.S. Army Corps of Engineers prepares to withdraw from Puerto Rico on May 18, which marks the end of the agency’s recovery mission responding to Hurricane Maria, as established by the Federal Emergency Management Agency.

• Still in the dark: Hurricane Maria caused the largest and longest blackout in U.S. history, and nearly 23,000 Puerto Ricans remain without power more than seven months after Hurricane Maria destroyed the island’s power grid and just three weeks before the next hurricane season begins.

“I would imagine the thousands of Puerto Ricans without power would look at that date and say, wait you can’t leave us,” said Senate Energy and Natural Resources Committee Chairwoman Sen. Lisa Murkowski, R-Alaska, in a hearing.

DEMOCRATS SEEK ANSWERS ON ETHANOL WAIVER FOR FORMER TRUMP ADVISER CARL ICAHN: Six Democratic senators Tuesday sought answers on how the EPA granted a financial hardship waiver to a refinery owned by Carl Icahn, a billionaire former adviser to President Trump.

The EPA approved a financial hardship waiver for Oklahoma-based CVR Energy, owned by Icahn, Reuters reported, as the agency has been granting more waivers to oil refiners recently to avoid meeting the nation’s Renewable Fuel Standard.

• ‘Troubled’: “We … are troubled that a company that is owned by a billionaire former ‘special adviser’ to the president who is currently under investigation by federal prosecutors … has now received an ‘economic hardship waiver’,” the senators wrote in the letters to Icahn and Pruitt.

The letters were signed by Sens. Elizabeth Warren of Massachusetts, Sheldon Whitehouse of Rhode Island, Sherrod Brown of Ohio, Tammy Duckworth of Illinois, Tammy Baldwin of Wisconsin, and Amy Klobuchar of Minnesota.

The waivers, meant for small refiners, take the companies off the hook for blending ethanol.

CALIFORNIA COULD BECOME FIRST STATE MANDATING SOLAR ON NEW HOMES: The California Energy Commission is scheduled to vote Wednesday on new energy standards requiring all new single-family homes be equipped with solar panels starting in 2020.

The regulations also would apply to new multifamily buildings of three stories or fewer. They don’t need the approval of the Legislature.

California would be the first state to mandate rooftop solar on new homes.

• Costs could rise: A spokeswoman for the Energy Commission, Amber Beck, told the Los Angeles Times that buyers of new homes on average would have monthly mortgage payments rise by $40, while their monthly utility bills would decline by $80.

About 15 percent to 20 percent of new single-family homes built in the state currently include solar, according to Bob Raymer, technical director for the California Building Industry Association.

• Green target: The new rules would be a key piece of California’s plan to goal to reduce carbon dioxide emissions by 40 percent by 2020.

ECONOMISTS CALL ON U.N. TO OVERSEE THE END OF FOSSIL FUEL PRODUCTION UNDER PARIS: Hundreds of groups and economists are pushing for the United Nations to adopt their demands to direct fossil fuel companies to phase out production to meet the goals of the Paris climate change agreement.

Five hundred organizations and 140 leading economists used the U.N. meeting in Bonn, Germany, to push their demands on the parties gathered for the latest round of climate negotiations.

The groups’ declaration states “that it is the urgent responsibility and moral obligation of wealthy fossil fuel producers to lead in putting an end to fossil fuel development and to manage the decline of existing production.”

CLIMATE NEGOTIATIONS BOGGED DOWN IN BONN: Negotiators in Bonn are bogged down by the technical details of meeting the Paris goals.

So the U.N. will hold need to hold extra rounds of climate talks late this year in Bangkok after more than a week of lagging progress.

Countries have spent the past nine days  pouring over the rules that will govern the Paris Agreement, to no avail.

The reason for the stalemate was rich and poor countries can’t agree on how much they can do and by when, activists say.

RUNDOWN

New York Times New files shed light on day guards smashed Scott Pruitt’s door

E&E News Pruitt meets, disappoints families harmed by paint stripper

Quartz Cheap renewable energy is killing India’s coal-based power plants

Haaretz Israel-Cyprus dispute over gas field risks delay for creating energy hub

Bloomberg Hydrogen may rival batteries for U.K.’s green power