Daily on Energy: Trump’s next big trade announcement is expected to be radioactive

U.S. utility lobbyists and advocates opposing the action are anxiously awaiting a decision on Friday, although it is unclear which way Trump will ultimately go.

Utility advocates for the likes of Exelon and First Energy, companies with large nuclear power plant fleets, say electricity prices will likely skyrocket if the administration imposes quotas on nuclear fuel imports.

The administration, driven by Commerce Secretary Wilbur Ross, has been reviewing recommendations for months following an investigation into the national security implications of relying on uranium imports. The U.S. receives most of its imports from its ally to the north, Canada.

Utility advocates believe Ross is the only one who favors the quotas, with many in Trump’s Cabinet unconvinced that it is necessary.

“In general, the plan hasn’t proved popular within the Trump administration and its only real advocate is Commerce Secretary Wilbur Ross,” said a GOP source tracking the issue for a member of the utility industry.

Even Peter Navarro, the president’s senior trade adviser known as a major protectionist, “is skeptical,” the source said.

The White House has not responded to repeated requests for comment on where it stands.

Soon after the July 4 holiday, the administration held a meeting on the issue, but “no consensus” was reached, the source said.

Ahead of the meeting, the two mining firms that petitioned for the quotas sent a study rebutting the utility industry’s claims about the harmful effects of imposing strict limits on imports.

The companies, Energy Fuels and Ur-Energy, argue that the utilities’ claims about rate hikes and layoffs is nothing more than a “misinformation” campaign driven by greed.

“Driven solely by short-term profits, utilities outrageously claim that a modest quota for U.S. uranium will drive nuclear power plants to close — all while several utilities collect hundreds of millions of dollars in taxpayer subsidies,” a July 3 letter from the companies read.

The companies included a recently peer-reviewed study published in the journal Resources Policy that showed the cost impacts on utilities would be minimal.

The added cost on electricity bills for the average consumer would be between 2 and 8 cents per month, according to the companies.

Still, opponents say it’s too much of a risk for Trump in an election season, especially when approving such quotas could see layoffs in key swing states like Ohio and Pennsylvania.

The nuclear power industry is already under pressure to close its plants due to increased competition from low-cost natural gas power plants and renewables. States like New York have instituted contentious subsidies to keep the power plants afloat.

Welcome to Daily on Energy, written 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.

GONE BUT NOT FORGOTTEN: ONWARD AND UPWARD TOWARD 2020: This is my, John’s, last Daily on Energy newsletter, as I will be taking up a new job — still in Washington — working on the communications side for the energy industry.

I’ll let you know which trade association I am joining in a tweet I will send out later. So, a drum roll, please.

It’s been a good four-and-a-half years at the Washington Examiner and I leave the newsroom with a number of successes at my back, including this newsletter.

The Daily on Energy will continue with Josh, who has carved out his own place among the environmental reporter ranks in Washington.

The coming year is slated to be full of energy and environment news, but here is my list of newsworthy hits that I expect will continue to generate headlines through the remainder of the year, and into 2020.

First, oil and natural gas issues: Oil prices and geopolitical instability will continue to dominate the news cycle for the remainder of the year and into the first quarter of 2020.

Trump’s oil sanctions on Iran are one of the reasons why oil will remain a big issue going into the presidential elections.

But there is also OPEC’s teamwork with Russia to look out for, as the battle for market share heats up between Russia-OPEC and the United States. OPEC and Russia just approved continuing production cuts into the first quarter of 2020 in an effort to rebalance the market — which is code for actions that keep prices on the higher side. This promises to remain a hot issue, along with ongoing security challenges surrounding the Straits of Hormuz.

On the domestic side, U.S. oil production will remain high enough to make up for both Iran and OPEC’s production cuts, the federal government conceded in its latest projections.

Nevertheless, it remains to be seen if infrastructure can keep up with demand, as the U.S. begins to run short on oil export terminals by the end of the year.

And don’t forget the U.N.’s new fuel rules for ships: The new International Maritime Organization’s fuel regulations for tankers and other sea-going behemoths are expected to put pressure on oil supplies, which in turn could drive up costs at the pump going into the elections. The federal government said this week that there are still too many “unknowns” to tell how far the IMO will drive up prices. There is also a rumor that the organization is considering delaying implementation.

Let’s talk about L-N-G: Natural gas exports will continue to find their way into Trump stump speeches on the campaign trail. He often touts the U.S.’ historic shift to become a net natural gas exporter. But natural gas also continues to dominate on the electric power side, which the Trump administration has been somewhat wary of supporting, given that the rise of natural gas has been at the expense of coal.

Ethanol continues to be a sore spot: The EPA’s release of the 2020 Renewable Fuel Standard a week ago left very few happy. Ethanol lobbyists say the annual ethanol blending targets are too low. They argue that EPA left out an additional one billion gallons to make up for the lost demand it created by granting dozens of exemptions to oil refiners not to blend corn ethanol.

This has placed Trump in a bind, who thought he pleased corn farmers by lifting restrictions in June to allow the year-round sale of 15% ethanol fuels.

The oil industry also doesn’t like the new standard: Oil refiners, who are forced to blend biofuels under the law, say the 2020 numbers are way too high, and must be lowered when the RFS is made final in November.

Things could get even more complicated later in the year when the EPA is also expected to issue a landmark rule to reset Congress’ intended targets under the renewable fuel program.

EPA has the right to do this under the law. The biofuel camp hopes to see the agency address the refinery exemptions in the forthcoming rule at the end of the year.

Wind, solar, and storage: The Investment Tax Credit for solar panel installations begins to wind down at the end of 2019, and continue on the path to zeroing out by 2022.

Democrats are already looking at legislation to stop the ITC from winding down. There is also legislation to stand up new subsidies for energy storage, which is seen as the key to making renewables reliable and on par with fossil fuels.

The Production Tax Credit for wind farms also phases out this year, leading the industry into what the American Wind Energy Association calls the era of “Post-PTC Wind.”

There has been legislation introduced to extend the PTC through 2020, making wind farms eligible for the subsidies through Jan. 1, 2021.

What’s climate have to do with it?: The debate over climate change seems to be dominated by the Democratic presidential campaign field.

While legislation Democratic-controlled House is bringing up climate legislation, it’s unlikely that anything will get past the Senate. It looks to be more of a messaging campaign on climate change on Capitol Hill going into next year’s Democratic convention.

The aim of the House will likely be to gather momentum ahead of the election, waiting anxiously for a change in the Oval Office to begin a real push for comprehensive climate legislation.

Even Trump may seek to add more climate adaptation strategies to his list of boasts after Monday’s environmental leadership speech. Of course, whatever he does to enhance his environmental credibility, don’t expect to hear the words “climate change” as his motivation.

Moving into 2020, Trump will look to fulfill his promise of withdrawing from the Paris climate change agreement. The U.S. becomes eligible to withdraw from the agreement on Nov. 4, 2020, right around the time of the presidential election.

IEA FORECASTS GLOBAL OIL SURPLUS AFTER OPEC DEAL FAILS TO BALANCE MARKET: Global oil supply exceeded demand by 900,000 barrels per day in the first half of 2019, showcasing how a deal by OPEC and Russia to cut production has failed to balance the market.

An agreement by OPEC and Russia reached this month to continue supply cuts until March 2020 “does not change the fundamental outlook of an oversupplied market,” the International Energy Agency said in a report Friday. IEA projects there to be a global oil surplus of 500,000 barrels per day in the second quarter of 2019, after the agency previously expected a deficit of 500,000 barrels per day.

Global oil demand, meanwhile, grew at its weakest rate since 2011, due to a sluggish economy, trade disputes, and a slowdown in manufacturing activity. The IEA downgraded its estimate for global oil demand growth in the second quarter of 2019 by 450,000 barrels a day to 800,000 a day.

SENATE CONFIRMS DOW CHEMICAL LAWYER TO OVERSEE SUPERFUND SITES: The Senate confirmed Peter Wright, a Dow Chemical lawyer, on Thursday to lead the EPA’s Office of Land and Emergency Management that oversees Superfund sites, brownfields and landfills.

Wright was approved by a 52-38 vote after a lengthy delay, first nominated for the job in March 2018.

“It’s a shame we had to wait this long to get a good and highly qualified man like Peter into a critically important public service position,” EPA Administrator Andrew Wheeler said in a statement.

Democratic senators opposed Wright, who had been working at the EPA as special counsel before being confirmed, for not doing enough to combat toxic chemicals known as perfluoroalkyl and polyfluoroalkyl substances, or PFAS, that have contaminated U.S. water supplies.

Senators Tom Carper of Delaware, Sherrod Brown of Ohio, and Bob Casey of Pennsylvania said they want the EPA to designate PFAS chemicals as hazardous substances under the Superfund law, which would allow the agency to require responsible parties to clean up contaminated sites.

Wright is recused from working on 300 sites, including Superfund and other hazardous waste sites, according to Bloomberg Environment.

According to the EPA, Dow Chemical, Wright’s former employer, is fully or partially responsible for several Superfund sites, including a chemical plant in Midland, Mich., that released dioxins into the Tittabawassee and Saginaw rivers, and Del Amo, a former synthetic rubber production plant in Los Angeles.

Wright was a managing counsel with Dow’s legal department and had been with the company since 1999.

HOUSE TO VOTE ON PFAS PROVISIONS AS PART OF DEFENSE BILL: A number of PFAS-related amendments made it onto the House’s annual defense policy bill, which could get a vote as soon as Friday.

Amendments approved to be a part of the National Defense Authorization Act, sponsored by Democratic Representative Dan Kildee of Michigan, include measures to force the Defense Department to phase out the use of PFAS in firefighting foam by 2025, and another requiring the Government Accountability Office to review the Pentagon’s response to PFAS contamination at military bases.

Another amendment would designate PFAS as a hazardous substance under the Superfund law.

PFAS are stain-resistant chemicals that have been used since the 1940s in Teflon, nonstick pans, electronics, water-repellent clothes, food packaging and firefighting foam. Water contamination from PFAS is particularly bad around military bases, likely because of firefighting exercises that occur there.

The White House has threatened to veto the defense bill, in part because of the PFAS provisions.

MEDIA OUTLETS INVITE DEMOCRATIC 2020 CANDIDATES TO CLIMATE CHANGE FORUM: Media outlets The New Republic and Gizmodo announced Thursday that they will host a presidential climate change summit for Democratic candidates.

The outlets say the Democratic National Committee has failed to give climate change proper attention by not yet committing to a debate solely focused on the issue. The first Democratic debates last month provided climate change 15 minutes of discussion over two nights.

Opponents of the idea say devoting an entire debate to climate could unfairly reward candidates who are strong on climate, while setting a precedent that could lead to other single-issue debates.

“The first round of Democratic presidential debates failed the planet,” journalists Brian Kahn and Emily Atkin wrote in an op-ed describing the forum, to be held in New York City on Sept. 23. “We hope all the candidates in the 2020 Democratic field will find a way to take part, because the climate crisis deserves to take center stage in the 2020 primaries.”

Candidates would appear on stage one-by-one to answer questions from moderators. Other organizations helping host the forum include the League of Conservation Voters and Columbia University’s Earth Institute.

No candidates have confirmed attendance for the event.

SHELDON WHITEHOUSE QUESTIONS INVESTORS ON TECH GIANTS SUPPORT FOR ‘CLIMATE DENIER’ GROUP: Senator Sheldon Whitehouse urged major investors to seek answers from tech and telecom giants about why they are funding the Competitive Enterprise Institute, a free-market group that questions climate change science.

Climate hawks have long wondered about the funding of CEI, but it is not required to disclose its donors, as a nonprofit. But the New York Times this week reported on an itinerary it obtained for a recent gala organized by CEI that listed sponsors including Google, Amazon, AT&T, Verizon, T-Mobile, and Uber.

Each of those companies have internal corporate policies to reduce carbon emissions and combat climate change, but they are “undermining” those commitments by supporting the CEI event, Whitehouse said.

Whitehouse, Democrat of Rhode Island, wrote a letter to major institutional investors including BlackRock, State Street, and Legal & General, which have stakes in those companies.

“As an institutional investor with a stated interest in sustainability, we encourage you to discuss with the management of the companies in which you invest the importance of ensuring that corporate funds do not support organizations that oppose climate action,” Whitehouse said.

The Rundown

Miami Herald Adapting to climate change is going to cost Florida a lot. Who is going to pay for it?

Wall Street Journal California legislature approves multi-billion dollar wildfire fund

Reuters Climate activists find warmer reception at shareholder meetings

Bloomberg Germany inches toward carbon tax with Merkel panel proposals

Calendar

FRIDAY | July 12

9:30 a.m., 2123 Rayburn. The House Energy and Commerce Committee’s Subcommittee on Energy holds a hearing entitled “Keeping The Lights On: Addressing Cyber Threats To The Grid.”