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SIGN UP! If you’d like to continue receiving Washington Examiner’s Daily on Energy newsletter, SUBSCRIBE HERE: http://newsletters.washingtonexaminer.com/newsletter/daily-on-energy/ ENERGY INDUSTRY BEGINS RUSH FOR TARIFF EXEMPTIONS: The pipeline industry is pressing the Trump administration for a categorical exemption of all steel products used in their products, after President Trump signed two orders Thursday afternoon imposing tariffs on steel and aluminum imports.
Trade groups line up: The move by the pipeline industry came Friday morning after other segments of the energy industry indicated Thursday they would be asking for exemptions for liquefied natural gas facilities and related pipeline resources.
U.S. doesn’t have the capacity for pipe: “We believe the steel products used to build interstate pipeline infrastructure meet the two, independent criteria on which the president directed the commerce secretary to make exemptions: lack of sufficient U.S. production capacity and national security-based considerations,” said Don Santa, president and CEO of the Interstate Natural Gas Association of America, the industry’s lead trade group. A niche product: The group pointed out that the large diameter, thick-walled steel used in the industry’s transmission pipelines is very much “a niche product,” which has limited domestic manufacturing capacity. Much of the steel the industry uses come from NATO countries, South Korea, or Japan. Federal safety rules: Federal safety requirements and industry standards require that the steel specifications go beyond those commonly used by automakers or the construction industry, the group pointed out. Zero supply state side: “Pipelines require specialty steel products not always available in sufficient quantities and specifications from domestic manufacturers,” Santa said. “For certain steel products used in pipelines, there is zero domestic availability today.” Trump’s Thursday proclamation will apply a 25 percent tariff to most steel imports and a 10 percent tariff to most aluminum imports. S&P Global reported that the price for U.S.-made steel coil jumped 4 percent soon after the announcement.
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. CORNYN PERFORMS ‘DELICATE DANCE’ TO FIND ETHANOL COMPROMISE: Senate Majority Whip John Cornyn, R-Texas, said Friday at the CERAWeek energy conference in Houston that he is trying to “negotiate an rapprochement” between the corn farming and oil states. “We got to figure this out,” he said Friday. But it’s a “delicate dance” that will take time. His office is drafting legislation, but details are being kept close to the vest.
Big concern: He said the big concern is the high price of ethanol credits that refiners in his state have to pay to meet the Environmental Protection Agency’s Renewable Fuel Standard, noting that one refinery in Pennsylvania filed for bankruptcy protection blaming the credit prices.
Changing market: “Volume for liquid fuels is going to recede as a result of electric cars,” he said. “We don’t intend to do anything to hurt [the corn farmers],” but everyone needs to be able to compete. NEW YORK THREATENS TO SUE IF NOT REMOVED FROM OFFSHORE DRILLING: New York Attorney General Eric Schneiderman on Friday threatened to sue the Trump administration if it does not remove the state from the Interior Department’s offshore oil and natural gas drilling plan. Friday night is the deadline for the public to comment on Interior Secretary Ryan Zinke’s proposal to massively expand drilling in federal waters.
Fighting words: “The Trump administration’s plan to turn over New York’s coast to big oil threatens our environment and our economy, and I stand ready to use the full power of my office to fight back if the administration won’t listen to New Yorkers’ opposition,” the Democrat said. “The Trump administration must follow the law and eliminate New York’s coastal waters from its senseless and dangerous drilling plan. If the administration refuses, I will act to ensure our state’s economy, environment and natural resources are protected.”
‘Arbitrary’ action: Under the Interior Department’s proposed plan, areas offshore of New York would, for the first time in decades, be opened to leasing for oil and gas development. Schneiderman argues that Interior would violate the law if it moved forward with the plan against New York’s wishes, and without solid reasoning, because such an action is “arbitrary and capricious.” OIL AND GAS INDUSTRY ASKS ZINKE TO STAND FIRM ON OFFSHORE DRILLING: The American Petroleum Institute called on Zinke Friday to maintain the offshore drilling plan and open up federal waters from coast to coast. “Our offshore is the backbone of oil and gas production,” said Erik Milito, API’s director of upstream and industry operations, in a call with reporters. “For us to maintain that, we need to explore and develop resources from new areas.”
Big hopes: Milito said he was not concerned that Zinke may limit the plan after governors, and lawmakers, including many Republicans, have opposed offshore drilling off their states’ coasts.
The Interior secretary has already said he would exempt waters off the coast of Florida from drilling after Republican Gov. Rick Scott complained. Eyeing new areas: “The way the process works is it’s designed to start off large and get narrowed down,” Milito said. “That has been the history. “Hopefully there will be additional areas included in this offshore program. There is a fundamental choice. We can develop the resources here, or rely on other countries to secure these significant benefits. In order to be energy dominate, we need to provide additional opportunities outside the Western and Central Gulf [of Mexico].” RELIGIOUS LEADERS CALL ON TRUMP TO STOP OFFSHORE DRILLING PLAN: Hundreds of religious leaders wrote a letter Thursday to Trump and Zinke asking them to end plans to expand offshore drilling in public waters, citing “unacceptable risks to God’s oceans and coastal communities.” The group of leaders representing a variety of faiths and part of the National Religious Partnership for the Environment, voiced their opposition to the administration’s offshore drilling plans because of environmental concerns.
Focus on renewables: The group proposed the administration focus on renewable sources of energy such as wind and solar and to work on maximizing energy efficiency.
INTERIOR-FUNDED STUDY CALLS FOR NEW OFFSHORE SAFETY STANDARDS: A report funded by the Interior Department is recommending that the agency work closely with the oil industry to establish standards to prevent spills from bolt failures on undersea safety equipment used in deepwater drilling.
New oil spill prevention: The National Academies of Sciences issued the report Friday, raising concerns about the potential for oil spills that could result from bolt failures on such equipment as blowout preventers. A failed blowout preventer caused the 2010 Deepwater Horizon offshore oil spill, the largest in the industry’s history.
No major spills, but …: “No major oil spills have resulted from the failure of a bolt or fastener, but there have been minor oil releases and near misses caused by unexpected bolt failures,” according to a summary of the report. The small spills illustrate a “compelling need” for changing the regular inspection cycle of bolts and fasteners by including “an industrywide continuous monitoring program,” the report says. Trump’s deregulation push: The report comes as the Trump administration is repealing federal safety requirements for blowout preventers and offshore well safety rules put in place by the Obama administration. The industry argued that the rules are too prescriptive and undermine the industry’s own safety standards. DEMOCRATS CALL ETHANOL MANDATE AN ENVIRONMENTAL ‘FLOP’: A group of Democrats apologized for the failed experiment that is the nation’s ethanol mandate on Thursday, calling it a “flop” and introducing legislation that would phase out corn ethanol use in six years.
Admitting a mistake: “We made a mistake,” said Henry Waxman of California, the former Democratic chairman of the House Energy and Commerce Committee, who drove the passage of the Renewable Fuel Standard, or RFS, in a comprehensive energy bill passed in 2007.
“The law hasn’t worked out as we intended,” Waxman said in joining lawmakers on a call with reporters Thursday to talk about new legislation that seeks to fix that mistake. Waxman left Congress in 2015. Rep. Peter Welch, D-Vt., and Sen. Tom Udall, D-N.M., introduced the Greener Fuels Act, saying that the Environmental Protection Agency’s RFS has been a failure for the environment. Tale of an ‘well-intended flop:’ “We’ve now had more than a decade of experience with it, and it had the best of intentions,” Welch said. “But it has turned out to be a well-intended flop.” Welch said those who supported the RFS in the Energy Independence and Security Act of 2007 were mistaken to think it would help curb climate change and that there is ample evidence it has made it worse. No climate benefits: “It actually doesn’t cut down on greenhouse gas emissions, it expands them,” Welch said. “It’s had a significant impact on overplanting in fragile areas of the corn belt. It has had significant impacts on small engines. And it’s also had a significant impact on feed prices … and there is a lot of evidence it has increased the cost of food.” DEMS’ RFS BILL ‘DEAD ON ARRIVAL:’ Nearly all the major biofuel trade groups that support the Renewable Fuel Standard said they oppose the Democratic bill. Emily Skor, president and CEO of the pro-ethanol group Growth Energy, said the Welch-Udall bill was “dead on arrival.” She said the bill appears to be oil companies trying “to ghostwrite legislation for environmental front groups,” alluding to the fact that the oil industry has tried to get the EPA to approve limiting the ethanol mandate to 9.7 percent. Welch and Udall were joined on the call by the Sierra Club and the National Wildlife Federation, which adamantly support eliminating corn ethanol from the RFS. COMMENTS TO FERC ON GRID RESILIENCE DUE FRIDAY: The nation’s federally overseen grid operators, which run about 70 percent of the nation’s power supply, on Friday will report to the Federal Energy Regulatory Commission on the state of the nation’s grid resilience, or its ability to bounce back from a major disruption such as this year’s bomb cyclone in the Northeast. FERC members are hinting that the independent government agency likely will take some type of action to better value the resilience that certain power plants provide to the electric grid, based on what grid operators report.
Serious look: A day after FERC Chairman Kevin McIntyre said he would be “very surprised” if FERC takes no action, fellow commissioner Robert Powelson suggested the same.
Powelson said Thursday he expects the regional grid operators to present different feedback, depending on their market characteristics. “Some regions will come back and say, check the box, we are good on resilience and reliability and let us go about our business,” Powelson said during an appearance at CERAWeek. “Others may come back with valuing attributes of resources within that market, and we will seriously look at that.” No generation bias: He said FERC would take a fuel-neutral action that recognizes resilience attributes offered by all kinds of energy sources. “We are generation agnostic, but reliability first and foremost,” Powelson said. “There is a 1980 definition of baseload. Guess what? We have battery storage. We have integration of pretty robust renewable resources. These are all part of that conversation. Let’s not put our thumb on the scale.”
INTERIOR TO BEGIN PROCESS OF OIL AND GAS LEASING IN ANWR THIS MONTH: The Trump administration this month will begin the process of opening the Arctic National Wildlife Refuge to oil and natural gas leasing. Interior Department officials visited Alaskan communities this week to let them know the agency in March will publish a notice in the Federal Register of its intent to do a draft environmental impact statement for energy leasing in the refuge, known as ANWR.
‘Ambitious goals’: Sen. Dan Sullivan, R-Alaska, said this week that the Interior Department could have the first lease sale to oil and gas drillers in 2019.
Joe Balash, Interior’s assistant secretary for Land and Minerals Management, told local media he is hopeful the agency can meet that goal. Scoping it out: Balash said the notice in the Federal Register will start a “scoping period” opening the “opportunity for people to talk to us about a range of issues needing to be considered” during the development of a draft environmental impact statement, before Interior develops a final statement. RUNDOWN Bloomberg Saudi Arabia enlists lobbyists in quest to build nuclear plants Washington Post The giant company that could: How Dominion turned scorn into a big payday Houston Chronicle As gasoline demand wanes, oil industry looks to petrochemicals Politico This is what happens when bitcoin miners take over your town Reuters Israel expects decision on East Med gas pipeline to Europe in 2019 Salt Lake Tribune Trump administration poised to grant millions of dollars in tax royalty relief to struggling Utah coal mines Washington Post With Tooke’s resignation, scandal continues to burn the U.S. Forest Service Reuters Shell’s U.S. shale output plans prioritize oil over natural gas |
CalendarFRIDAY, MARCH 9 9 a.m., 3401 Massachusetts Ave. NW. The Atlantic Council holds a discussion on “Trends in the Norwegian Oil and Gas Sector.” 9:35 a.m., Houston. Senate Majority Whip John Cornyn, R-Texas, and Sen. Lisa Murkowski, R-Alaska, chairwoman of the Energy and Natural Resources Committee, discuss the road ahead in Washington at CERAWeek. 10 a.m., 1616 Rhode Island Ave. NW. The Center for Strategic and International Studies holds a book discussion on “The Logic of American Nuclear Strategy.” Noon, 14th and F streets NW. The CO2 Coalition holds a news conference on “Does the World Need Climate Insurance?” Noon, 2168 Rayburn House Office Building. The Environmental and Energy Study Institute holds a briefing on the “2018 Sustainable Energy in America Factbook.” eesi.org/briefings/view/030918bcse WEDNESDAY, MARCH 14 All day, Washington Marriott at Metro Center. American Council on Renewable Energy holds its annual Renewable Energy Policy Forum. All day, 555 Pennsylvania Ave.. The Congressional Hispanic Caucus Institute holds its Energy Summit: A World in Transition. THURSDAY, MARCH 15 10 a.m., 2318 Rayburn. House Science, Space, and Technology Committee holds a committee hearing titled “An Overview of the National Science Foundation Budget Proposal for Fiscal Year 2019.” 12:30 p.m., 1619 Massachusetts Ave. NW. The School for Advanced International Studies holds the Energy in China conference. eventbrite.com/e/energy-in-china-tickets-43900939893?aff=es2 |
