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US ENERGY SINCE 9/11: MORE PRODUCTION, BUT STILL AT THE MERCY OF OTHER COUNTRIES: Since Sept. 11, 2001, the U.S. has become a dominant energy producer, yet cannot seem to break free from the unpredictable nature of the global oil market.

Even with the U.S. producing more of its own oil in 2018 because of the shale boom and fracking, it remains at the mercy of the global price of oil, as shown by federal oil analyses from 2002 to 2018 and recent actions by the Trump administration.

Under the influence: President Trump, like many of his predecessors, must still call on large OPEC oil producers, such as the Saudis, to avoid any uneventful price hike that could shoot up fuel prices going into a midterm election season.

On Monday, Sept. 10, 2018, Energy Secretary Rick Perry was meeting with Saudi Energy Minister Khalid al-Falih in Washington to discuss OPEC plans to keep supply steady, and urging them to forgo supply cuts, according to media reports.

Is it really up to OPEC? Just like today, the fate of the global oil price was being deliberated in 2002 by the OPEC oil cartel.

“This doubt over a production increase from OPEC has also added some pressure on prices,” the Energy Information Administration said then.

And just like today, rising oil prices were also a factor of geopolitical instability, according to EIA.

Then Iraq, now Iran: “Clearly, fears about a possible war with Iraq reducing global supplies of oil are reflected in the latest prices,” the agency said in a late August 2002 analysis.

In 2018, the concern driving the Trump administration to hold talks with the Saudis is not Iraq, but Iran. Specifically, it is anxious about the possibility that re-applying sanctions to Iran’s oil exports will drive up prices in a very tight oil-supply market with very little spare surplus available.

Iran has already begun decreasing its exports, which is sending prices upward.

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.  

ENERGY INDUSTRY LOOKS TO TAKE BLOCKCHAIN BEYOND BITCOIN: September could become the month that blockchain moves from being associated with Bitcoin mines — and potential higher energy costs — to breaking into the mainstream of how the energy industry does business.

The Senate Energy and Natural Resources Committee took up the issue at a hearing in August. Since then, there has been a new collaboration, conference, or webinar announced almost daily focused on the possibilities blockchain might entail for the energy sector.

What Capitol Hill is saying: “Utilities are looking at blockchain as a way to boost both consumer engagement and grid efficiency through secure energy transaction platforms,” said Sen. Lisa Murkowski, R-Alaska, the chairwoman of the energy committee.

She noted that Puerto Rico is looking at blockchain to help it operate the island’s new, more resilient electric grid, which was developed to restore electricity to the island after last year’s devastating hurricanes.

U.N. looking for climate connection: Even the United Nations is looking at the technology to inform its fourth annual Environment Assembly next year, which will be focused on innovation.

SmartMinds CEO Mark Copeland discussed the prospects for blockchain last week at the U.N. Earth Innovation Forum in Estonia. The forum is the planning session for the bigger U.N. energy meeting in Nairobi next March.

Read the full article in Tuesday’s Washington Examiner.

FLORIDA KEYS RESIDENTS GRAPPLE WITH THEIR FUTURE ONE YEAR AFTER HURRICANE IRMA: One year to the day after Hurricane Irma struck, life is returning to paradise in the Florida Keys, the iconic island chain at the very bottom of the state.

“We got back on our feet,” Jorge Blanco, 47, a burly commercial lobster fisherman, told Josh during a reporting trip Monday. “We were able to throw the traps back into the water and are working the traps now.”

But climate change is making storms worse: Hurricane Irma, the worst storm to hit the Florida Keys in a dozen years, forcing a mandatory evacuation, has Blanco, a lifelong resident of Key West, grappling with his future on the islands at a time when storms are becoming more destructive because of climate change, and sea level rise is already happening, forcing rebuilt buildings, and roads, to be elevated.

Blanco, with the help of loans and insurance, is on his way to somewhere near recovery this time. He had just stuffed a sofa and mattress into the cab of his red pickup truck donated by a local nonprofit, furniture that will decorate his home after it is fully repaired in about three weeks, a welcome moment after living the last year in an RV on his property.

He was not sure about his chances the next time, though.

‘What comes next?’ “It totally scares you, especially this storm that came through,” Blanco said of Irma, which damaged about 90 percent of houses in the Florida Keys, and destroyed 25 percent of buildings, according to the Federal Emergency Management Agency. Fourteen people in Monroe County, covering the Florida Keys, died.

“It totally destroyed all the traps, and our boat,” Blanco added. “We had to redo everything completely. Now that you are in debt up to your neck, you’ve got all these storms coming again, you are afraid if it comes back through here, what comes next?”

Politicians bring nuanced perspective: Some of Florida’s federal representatives were here Monday to comfort Blanco, and more of the overlooked residents who make their life in the Florida Keys.

Sen. Marco Rubio, R-Fla., and Rep. Carlos Curbelo, a House Republican who represents Florida’s 26th District at the tip of the state, traveled up and down the 120 miles of the Florida Keys to mark the one-year anniversary of Hurricane Irma.

They came with an appreciation of progress, but also with a recognition that Florida is lucky to escape the wrath of Hurricane Florence, the latest potentially “catastrophic” storm churning toward the East Coast.

“We know this is not the last time this community and South Florida and the state of Florida in general will be impacted by a storm such as this,” Rubio said during a stop Monday morning at Fishermen’s Hospital in Marathon, a city located in the middle of the Florida Keys.

Fishermen’s Hospital, the only hospital in the Middle Keys, is currently operating out of a mobile building because Irma shattered the windows, sunk the roof, and molded the insides of the former structure that had stood since the 1950s.

It will take about two years for the original hospital to be demolished and rebuilt, to tougher standards that can withstand a maximum strength Category 5 storm.

Key West won’t stop building: Later Monday afternoon, an hour south in Key West, Curbelo celebrated the groundbreaking of a new 208-unit apartment complex partially funded by federal tax credits that local officials say is meant to address an affordable housing crisis on the islands made worse by Irma.

“We are going to continue building, we are going to continue getting stronger, and this is going to continue being one of the unique thriving communities in the world,” Curbelo said.

HURRICANE FLORENCE CHURNS TOWARD CAROLINAS AS CATEGORY 4 STORM: Hurricane Florence rapidly intensified into a Category 4 major hurricane capable of “catastrophic” damage on Monday as forecasters predict the monster storm will likely hit the U.S. by end of the week, most likely in the Carolinas.

With computer models generally agreeing that landfall will occur late Thursday in North or South Carolina, the governors of those states and in Maryland and Virginia have declared states of emergency. Gov. Henry McMaster has ordered a mandatory evacuation for residents along the entire South Carolina coast, affecting more than a million people. Evacuations have also been announced for parts of North Carolina — including the Outer Banks — and Virginia.

The damage that may come: The hurricane brings the threat of damaging winds, storm surge up to 15 to 20 feet, heavy rainfall, and flooding, even in areas miles away from the center of the storm.

The National Hurricane Center says Florence, fueled by warm waters, is still growing in size and strength, indicating that a Category 5 storm — the top level of the Saffir-Simpson Hurricane Wind Scale — is a possibility.

While the D.C. metropolitan area is not currently expected to receive a landfall, local forecasters are warning that over the weekend there is the potential for heavy rains and catastrophic flooding.

Federal government takes action: Trump approved emergency declarations for North Carolina and South Carolina late Monday evening, unlocking federal assistance to state and local responses to the storm.

TRUMP ADMINISTRATION ROLLS BACK METHANE RULES TO HELP DRILLERS: The Environmental Protection Agency proposed on Tuesday to roll back Obama-era regulations targeting methane leaks from oil and gas drillers and fracking operations.

The methane emissions rules were part of the Obama administration’s climate agenda, which targeted methane as a short-lived greenhouse gas that is more potent than carbon dioxide.

The proposed improvements to the 2016 New Source Performance Standards for the oil and gas industry look to streamline implementation, reduce duplicative EPA and state requirements, and significantly decrease unnecessary burdens on domestic energy producers, the EPA said Tuesday morning.

Show me the money: “Removing these excessive regulatory burdens will generate roughly $484 million in cost savings and support increased domestic energy production — a top priority of President Trump,” said EPA Acting Administrator Andrew Wheeler.

The cost savings that Wheeler described would be over a six year period from 2019 to 2025. The annual cost savings to the industry would be $75 million.

Cut the red tape: “These common-sense reforms will alleviate unnecessary and duplicative red tape and give the energy sector the regulatory certainty it needs to continue providing affordable and reliable energy to the American people,” Wheeler added.

What’s in the proposal: EPA’s plan would soften a 2016 rule that required oil and gas drillers to inspect leaks every six months, and to repair leaks within 30 days.

The proposed rule would permit drillers to do inspections every year, and give them 60 days to make repairs.

The proposal would also allow companies operating in states with weaker methane standards to follow those instead of federal rules.

Why methane matters: Natural gas’ overtaking coal as America’s most-used electricity source is responsible for most of the decline in planet-warming greenhouse gas emissions over the last few decades.

But the industry has struggled to contain leaks of methane from its operations.

Methane, the main component in natural gas, is more potent than carbon dioxide because it traps more heat, although its greenhouse gas emissions are relatively short-lived in the atmosphere.

Methane is responsible for about a quarter of global greenhouse gas emissions, with the oil and gas industry accounting for a quarter of methane emissions.

Plugging the leak problem: A study this summer published in the journal Science found that methane leaks are a bigger problem than federal agencies say it is. The study found oil and gas operations have a methane leak rate of 2.3 percent, compared with the EPA’s estimate of 1.4 percent figure, a 60 percent difference.

While leaks are infrequent, companies have an economic incentive to plug them. The industry prefers to participate in voluntary initiatives to limit methane leaks, however, instead of federal regulation that companies consider expensive and time-consuming.

Some of the world’s biggest oil and gas companies, including BP, Exxon, Shell, and Total, are signatories to a pledge to reduce emissions called Methane Guiding Principles, although the initiative does not include binding targets.

ELECTRICITY BOSS DOESN’T BUY TRUMP’S COAL BAILOUT: John Hughes, the president and CEO of the Electricity Consumers Resource Council, has represented large, industrial users of energy in Washington for more than 30 years. He is retiring from that role at the end of the year and has chosen Devin Hartman from the free-market R Street Institute to lead the trade group. Hughes is steeped in the ins-and-out of dealing with the Federal Energy Regulatory Commission, the nation’s electric grid regulator.

Electricity policy is sometimes arcane — some say by design. In the end, it all shows up in the bills each of us pays each month.

Hughes sat down with John to discuss the challenges industrial consumers face as part of the Washington Examiner’s Policy Bosses series.

Hughes is part of coalition opposing Trump’s coal bailout: President Trump wants the Energy Department to come up with a way to stop coal and nuclear plants from retiring. Hughes believes he is not likely to give up on this idea.

“I think Trump, if nothing else, he’s stubborn. I don’t think he’s going to give up on this issue,” Hughes said, discussing the administration’s plan with John.

Administration struggling with legal defense: “To him, it was a campaign promise that he wants to deliver on. But I think that the administration, primarily [Department of Energy], to the extent that the National Security Council is involved in this, they’re struggling to come up with a funding mechanism that will survive the legal challenge.”

A century of case law against it: “It’s widely recognized that any funding mechanism is going to have to be approved by FERC [the Federal Energy Regulatory Commission], and there’s a century of case law that’s going to restrict what FERC can and can’t do in doing this,” Hughes added.

Let them retire: “Our position is as simple. These are old, expensive power plants that need to be retired. And there’s no viable reason to sustain them. And the claim that ‘we’re trying to save the jobs at those plants or in those regions’ flies in the face of the fact that what you’re doing by keeping these plants online artificially is harming jobs elsewhere. And so it’s not a net job builder. At best, it’s a wash.”

RUNDOWN

Wall Street Journal Could oil demand peak in just five years?

Reuters U.S. oil exports to Japan, South Korea soar as refiners reap steep discounts

Bloomberg Yellen touts carbon tax as ‘textbook solution’ to climate change

Quartz Solid Power raises $20 million in the race to build all-solid-state batteries