TRUMP MULLS ETHANOL OPTIONS AMID GROWING UNCERTAINTY: Lawmakers and the refining and ethanol industries are growing nervous as they watch to see what steps President Trump will take to settle a feud between the business groups over the nation’s ethanol mandate.

Trump’s advisers are expected to give him a range of options this week on what actions he could take to settle the dispute over Renewable Identification Number credits, which independent refiners must buy to meet the Environmental Protection Agency’s Renewable Fuel Standard, since they cannot blend ethanol into gasoline to meet the requirements.

• Is White House creating more uncertainty? Some lobbyists tell John they are concerned the talks the White House has held over the past month could be generating more uncertainty over the RFS, because of conflicting processes in Congress and the White House.

• The conflict: Trump has met with oil refiners and biofuel producers at the White House several times this month. Those meetings were led by Republican senators such as Ted Cruz of Texas, who is pushing for an administrative fix through the Environmental Protection Agency. Meanwhile, Senate Majority Whip Sen. John Cornyn of Texas is developing legislation that would reform the ethanol mandate.

Sources with an ear to the deliberations tell John there can’t be two fixes — and administrative one and legislation. The big question is, would Trump support legislation or is he going to start his own process through the EPA?

• Senators want answers: A group of pro-ethanol Republican senators sent a letter to Trump last week pressing him to not move forward with a process at the EPA that would implement Cruz’s idea for an ethanol credit waiver. Cruz’s plan seeks to address the high price of the RINs.

The five GOP senators, including Sens. Chuck Grassley of Iowa and John Thune of South Dakota, who sent the letter want Trump to hold a meeting with them as soon as possible to discuss why Cruz’s waiver is the wrong solution, and to discuss the latest studies that prove their point.  

•  Democrats chime in: The lack of clarity on what Trump could do is even attracting Democrats to the discussion. Democrats have not been involved in the White House talks.

Sen. Tom Carper, D-Del., who has both refiners and biofuel producers in his state, sent Trump a letter Friday saying that he believes that the credit price problems stems from “market manipulation” caused by unregulated commodity trading practices, and is suggesting Trump make the EPA a more active cop on the beat.

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COMMERCE DEPARTMENT SPECIFIES HOW TO BE EXCLUDED FROM STEEL TARIFFS: The Commerce Department provided details Monday morning on how companies can apply for exemptions to the steel and aluminum tariffs imposed by Trump this month.

Many sectors of the energy industry that use steel in their products have said they plan to apply for an exemption because they depend on steel from overseas.

• Trump gives: Recognizing the outcry from various industries, Trump’s tariff proclamation outlines a a mechanism for applying for exclusion of specific products based on “demand that is unmet by domestic production or on specific national security considerations.”

Commerce Secretary Wilbur Ross can decide to give an exemption after consulting with other Cabinet secretaries.

“An exclusion will only be granted if an article is not produced in the United States in a sufficient and reasonably available amount, is not produced in the United States in a satisfactory quality, or for a specific national security consideration,” the Commerce Department said Monday morning in a filing to the Federal Register.

• Who can apply: Individuals or organizations using steel in their business or supplying steel to users in the U.S. may apply for an exemption, Commerce said.

• The hurdles: The administration says applicants must make separate exemption requests for each product. An exclusion granted by the Commerce Department applies only to the applicant, unless the agency decides to approve a “broader application of the product-based exclusion to apply to additional importers.”

Individuals or organizations that want to submit an exclusion request that Commerce already granted are allowed to do so.

Individuals or companies may file objections to those seeking exclusions.

• The timeline: Commerce says it will decide on an exclusion request within 90 days.

API’s GERARD WANTS ‘CLARITY AND FLEXIBILITY’ IN EXEMPTION PROCESS: Jack Gerard, president and CEO of the American Petroleum Institute, asked the Trump administration Monday morning for “clarity and flexibility” in the Commerce Department’s exclusion process.

“We support an exclusion process from the Department of Commerce that is both transparent and flexible,” Gerard said. “We expect the department will acknowledge various market realities and take into consideration the complex supply chains of the U.S. oil and natural gas industry and the need for specialty steel not available domestically for many of its projects.”

• Need for steel: The oil and natural gas industry relies heavily on global steel imports, including steel for drilling, onshore and offshore production facilities, pipelines, liquefied natural gas terminals, refineries and petrochemical plants, Gerard said.

Industry officials say the type of steel used in pipelines and other energy infrastructure is a niche market, and most domestic steel producers have left the pipeline market because of its high cost. Trump’s 25 percent tariffs could drive up the cost for projects that require steel.

• Hear me out: API, the largest trade group representing the oil and natural gas industries, organized a meeting Thursday at the White House, where industry officials pressed the White House on its trade policies.

POWER GRID SECURE AS RUSSIA ESCALATES CYBER WAR, EXPERTS SAY: Adversaries are successfully gaining intelligence to sabotage the U.S. power grid but remain far away from actually pulling off a wholesale attack, according to cybersecurity and energy experts.

The Trump administration on Thursday for the first time publicly accused Russia of targeting the U.S. power grid with cyberattacks.

• ‘Cat and mouse’ game: “This seems to be part of a collection of data points on a continuing game of cat and mouse,” said Jon Wellinghoff, a former chairman of the Federal Energy Regulatory Commission, in an interview with the Washington Examiner.

“But I continue to be concerned about how much information these bad actors are accumulating. Whether the accumulated information can become some critical mass that will allow them to perpetrate an event that can compromise our equipment, I don’t know.”

• ‘Unintended consequences’: Sergio Caltagirone, the director of threat intelligence at Dragos, which creates tools to protect industrial control systems, said he doesn’t believe Russia intends to shut down the U.S. power grid. But he says the complexity of civil industrial infrastructure could allow for a bad actor to create havoc by simply accessing the network.

U.S. officials say there is no evidence hackers have been able to break the networks that control operations at power plants.

• Silver lining: The grid is already somewhat protected from wholesale hacking because of its disconnected nature. And now, the grid is becoming — and can become — more disconnected, with the creation of microgrids.

HOUSE ENERGY PANEL ANNOUNCES HEARINGS FOR PERRY, PRUITT AND FERC: The House Energy and Commerce Committee on Monday morning announced an all-star line-up of hearings for April, with appearances scheduled for Energy Secretary Rick Perry, EPA Administrator Scott Pruitt and all five commissioners of the Federal Energy Regulatory Commission.

Perry will testify about the Energy Department’s budget April 12. Pruitt, who has been a tough get for members of Congress, is slated to appear April 26. And FERC commissioners are scheduled to testify to the committee April 17.

“We’re looking forward to hearing from the heads of these three agencies for a much-needed update on their work thus far and to ensure they’re prepared to effectively carry out their missions in an evolving world,” said committee Chairman Greg Walden, R-Ore., and Reps. Fred Upton, R-Mich., and John Shimkus, R-Ill.

MOODY’S GETS BEHIND ENERGY STORAGE: Large-scale utility battery storage projects are a “viable project finance opportunity,” credit rating giant Moody’s says in a report it released Monday morning.

The report projects that lithium-ion battery costs are projected to run about $100 per kilowatt hour by 2020-2022, half of the current $200 per kilowatt hour.

That will result in “a nine-fold increase from 2017 to 2022, driven by falling technology costs and strong regulatory support.”

ETHANOL INDUSTRY LOOKS FOR NEW OPPORTUNITIES IN REALITY TV: The Renewable Fuels Association, the ethanol industry’s lead trade group, is partnering with reality TV’s Paul Jr. Designs to design and build “a signature motorcycle that thrusts American-made fuel ethanol into the spotlight.”

The ethanol group announced Monday that Discovery Channel is bringing back the reality series “American Chopper,” which centers on the business drama surrounding Paul Jr. Designs, a custom bike outfit.

It will premier on May 27 after a six-year hiatus.

The small engine industry and motorcycle enthusiasts have attacked ethanol in the past for damaging their rides. The new episode appears to be an effort to prove to the world that corn ethanol and motorcycles are compatible.

RUNDOWN

Wall Street Journal Natural gas under assault after brief reign at the top

New York Times Offshore oil and gas operators want less regulation, but surprise inspections find serious safety problems

Bloomberg Storm-prone states are relaxing building codes instead of making them tougher

Reuters Mexico leftist says he would try to halt energy auctions if president-elect

Bloomberg Russia affirms pledge to see OPEC deal through to the end

Wall Street Journal The battery boost we’ve been waiting for Is only a few years out

New York Times Kelp farms and mammoth windmills are just two of the government’s long-shot energy bets