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US REFINERS IN A 48-HOUR FRENZY OVER CONFUSING VENEZUELAN SANCTIONS RULES: The refinery industry has been in the throes of a non-stop lobbying frenzy over the last two days trying to get clarification from the Trump administration on the licensing requirements for continuing to import Venezuelan oil after sanctions were imposed on Monday.

“I know for a fact that they’re talking non-stop every day on this,” said one industry lobbyist close to the meetings.

Another industry source called it a crazed lobbying spree to figure out what the administration’s licensing rules mean for the month-long ratcheting down of sanctions.

The rub has to do with Treasury’s licensing rule 12 that outlines the wind-down period for sanctions. Industry sources tell John that there is a difference of interpretation among industry on how the rule applies to continuing oil imports, and the administration cannot yet give them a clear answer to remove the confusion.

The rule pertains to importing oil from the OPEC nation in the immediate aftermath of Treasury’s Jan. 28 sanctions roll-out, and to what needs to happen once the wind-down period ends on Feb. 28.

Sources say there is real confusion over where payments for the oil need to be deposited, either with President Nicolas Maduro, or the opposition party leader Juan Guaido, who President Trump accepts as the true president of the country.

The problem is: There is no real link between the opposition leader and the oil import terminals controlled by the state-run oil company Petroleos de Venezuela, S.A., or PDVSA, which was the target of Monday’s sanctions by the Trump administration.  

Who gets paid? The licensing rules could be interpreted as continuing to pay for all previously arranged oil imports from PDVSA just as before during the month-long wind-down period. But a second interpretation of the rules says, “no,” all payments must go to accounts linked to Guaido, ensuring that Maduro has no cash rolling in.

“The problem is that Guaido does not control PDVSA,” said one industry source in talks with the administration. “It’s like you’re going to give me a new car, but I am going to pay my uncle. Well, that doesn’t help you very much, and you are probably not likely to deliver it.”

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VENEZUELA SANCTIONS COULD BE USED TO INVOKE KEYSTONE XL: One of the reasons refiners are scrambling to get clarity on the rules is their dependence on the heavier Venezuelan crude oil, which is cheaper than U.S. shale oil, but harder to turn into gasoline and diesel fuel.

The U.S. gets a similar, heavier oil stock from Canada, which is the principal reason for opening the Keystone XL pipeline. The project would move Canadian oil from the Alberta oil fields to U.S. refiners on the Gulf Coast.

Administration mulling new Keystone XL push: An industry source says he asked the White House why it hasn’t raised the issue of Keystone XL in making the Venezuela sanctions announcement. The source says the administration is looking at how to float Keystone XL as an alternative to Venezuela, but has not made a decision on how to exactly do that.

One of Trump’s first actions as president was to approve the pipeline project that the previous administration had pulled the plug on after seven years of delays. But the pipeline continues to face setbacks at the state level and in the courts.

Canada has recently decided to cut back oil production from its tars sands oil fields because of a lack of market access and pipelines. In addition, OPEC’s new production cuts are restricting heavier crude oil from Saudi Arabia that could be used in U.S. refiners.

U.S. shale oil is primarily more expensive, light-sweet oil that is easier to refine. Exxon Mobil announced its decision earlier this week to begin a multi-billion dollar project to upgrade one its refineries to begin accepting more shale oil to offset its dependence on imports of heavier oil.  

DEEP FREEZE PROMPTS RECORD DEMAND FOR NATURAL GAS: The U.S. set a new daily record for natural gas demand on Wednesday because of the deep freeze overtaking the Midwest, and to a lesser extent, the East Coast.

Natural gas consumption in the lower 48 states hit 150.6 billion cubic feet per day (bcfd), according to preliminary estimates from S&P Global Platts, as consumers hiked their heaters to combat the cold.

That tops the previous high of 144.6 bcfd set on Jan. 1, 2018, during last year’s “bomb cyclone.”

Industrial demand for natural gas Wednesday set a daily record at 28.5 bcf, while electricity generators used 34.2 bcf of natural gas, a new daily winter record.

Some states, meanwhile, asked residents to turn down their thermostats to conserve natural gas.

Michigan utility Consumers Energy urged residents to lower their thermostats to 65 degrees Fahrenheit or less until Friday at noon.

Utility Xcel Energy asked Minnesota residents to keep their heat at 63 degrees Fahrenheit through Thursday morning because of a “significant strain on our natural gas system due to extreme weather,” the company said in a statement.

The Trump administration’s National Security Council is reiterating the message to conserve natural gas, specifically to Michigan residents.

DEMOCRATIC FERC COMMISSIONER CHERYL LAFLEUR TO LEAVE THIS YEAR: Federal Energy Regulatory Commission member Cheryl LaFleur, a Democrat, unexpectedly announced Thursday she will leave the commission later this year, and not seek a third term.

LaFleur said she plans to stay at FERC at least through the end of her current term, June 30, and “probably longer”, depending on how Trump handled the appointment of her successor.

Trump has to nominate a Democrat to replace LaFleur, because the panel must have at least two members of each party.

“While this is not the outcome I had hoped for, I feel very lucky to have served on FERC for more than eight years (and counting),” LaFleur said in a Twitter post.

FERC faces change: Her decision means more change at FERC, which has lately seen plenty of it. Kevin McIntyre, a Republican former FERC chairman nominated by Trump, died earlier this month, leaving the commission split 2-2 between Democrats and Republicans. Trump has not yet nominated a replacement.

Robert Powelson, another Republican and Trump nominee, resigned abruptly last summer. His replacement, Bernie McNamee, only began work at FERC in December.

The disruption comes as FERC is weighing key initiatives, such as how to fairly compensate energy sources as the grid transitions, and changes to its pipeline review process. It also faces a backlog of proposals to build liquified natural gas export terminals.

ENERGY COMMITTEE DEMOCRATS ANNOUNCE FIRST CLIMATE CHANGE HEARING: House Democrats newly controlling the Energy and Commerce Committee announced Wednesday what they said would be the first hearing on climate change held by the panel in six years.

The hearing, entitled “Time for Action: Addressing the Environmental & Economic Effects of Climate Change,” will occur Wednesday, Feb. 6 at 10 a.m.

“It is long past time for this Committee to begin seriously examining how climate change is affecting our communities, environment and economy, and take action to reduce its harmful effects,” said committee chairman Rep. Frank Pallone, D-N.J., and Rep. Paul Tonko, D-N.Y., who leads the committee’s Environment & Climate Change Subcommittee.

Climate first: Pallone chose to make the committee’s first hearing about climate change ahead of other issues he is prioritizing, such as a recent court ruling against the Affordable Care Act and the Trump administration’s border separation policy.

Tonko’s subcommittee will convene the hearing, so it won’t include all members.

Democrats said this would be the the first of “many hearings on this growing global crisis.”  The House Natural Resources Committee is also expected to host a climate change hearing on the same day.

It’s about messaging.The hearings are timed a day after Trump delivers the State of the Union, giving Democrats a chance to contrast themselves with the climate skeptic president.

Tonko’s office said he plans to bring a “prominent national climate advocate” as his guest to the State of the Union.

OCASIO-CORTEZ TO INTRODUCE GREEN NEW DEAL LEGISLATION: Rep. Alexia Ocasio Cortez, D-N.Y., and Sen. Ed Markey, D-Mass., as soon as next week plan to introduce legislation filling in the details of a “Green New Deal” to combat climate change, according to a report Wednesday.

A spokesman for Markey’s office confirmed to Axios the impending legislation, but provided no specifics on what’s in it. The Sunrise Movement, a youth-led activist group who has been influential in the process, said it is due as soon as next week.

What this means: The broad outlines of Ocasio Cortez’ Green New Deal vision would shift the country to use 100 percent renewable energy across all sectors by 2030 and make massive public investments in clean energy infrastructure. It would also include a federal job guarantee to anybody seeking work during the transition. Any legislation like this has no chance of passing Congress with Republicans controlling the Senate and White House.

But progressives see the Green New Deal as an important step to signal the party’s focus on climate change. The framework has already won the support of top-tier 2020 presidential candidates, including Sens. Kamala Harris of California, Kirsten Gillibrand of New York, and Elizabeth Warren of Massachusetts.

MCCONNELL PREPARES VOTE ON PUBLIC LANDS PACKAGE: Senate Majority Leader Mitch McConnell, R-Ky., filed cloture Thursday on the motion to proceed on a package of public lands bills, setting up votes as early as next week.

Sens. Lisa Murkowski, R-Alaska, the chairwoman of the Natural Resources Committee, and Maria Cantwell of Washington, the panel’s former top Democrat who stepped down from that position this year, had pushed to pass the package last year as part of must-pass spending legislation.

The package includes measures to permanently reauthorize the Land and Water Conservation Fund, increase sportsmen’s access to federal lands, boost economic development in dozens of communities through land exchanges, and conserve lands of special importance.

New life for key public lands fund: Environmental groups had criticized the Senate for failing to permanently reauthorizing the popular Land and Water Conservation Fund during the last session of Congress. The fund uses money from offshore oil and gas leases and pays for public lands projects.

INTERIOR DEPARTMENT EXTENDS TERMS OF NON-SENATE CONFIRMED POLITICAL OFFICIALS: Interior Department Acting Secretary David Bernhardt has amended an order allowing political appointees who have not been confirmed by the Senate to continue leading key sections of the agency.

The order, dated Tuesday, allows these appointees to keep serving through May, while nominees for Senate-confirmed positions make it through the confirmation process.

Former Interior Secretary Ryan Zinke signed the original order Nov. 13 allowing eight political officials to lead parts of the agency without being confirmed by the Senate. The officials include National Park Service Deputy Director P. Daniel Smith, Principal Deputy Solicitor Daniel Jorjani, and Susan Combs, the assistant secretary of policy, management, and budget.

The Federal Vacancies Reform Act limits the duration that political appointees not confirmed by the Senate can lead in an acting capacity. Interior says it is complying with that law.

LAST YEAR WAS A RECORD FOR WIND ENERGY PURCHASES: Non-utility consumers such as companies, cities, and universities purchased a record amount of wind power in 2018, according to a report released Wednesday by the industry trade group American Wind Energy Association.

The report found customers like AT&T, Walmart, Exxon, and Shell purchased a record 4,203 megawatts of wind power capacity last year through long-term contracts, or Power Purchase Agreements.Those purchases by non-utility customers are 66 percent higher than the previous record in 2015. AWEA said low, stable prices, and customers’ interesting in using cleaner fuels, explain the surge.

“A rapidly growing number of big brands and utilities clearly understand that for American consumers, it’s no longer enough for energy to be affordable and reliable, it must also be clean,” said Tom Kiernan, CEO of AWEA.

RUNDOWN

Chron.com FERC delays on LNG decision raises nerves

Wall Street Journal Oil trains make comeback as pipeline bottlenecks worsen

Washington Post Citgo’s profits propped up Venezuelan leaders — until now

Bloomberg Trump’s Venezuela sanctions put Russian billions at risk

Reuters PetroChina to drop PDVSA as partner in refinery project