Daily on Energy: Saudis halt shipments through the Red Sea

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PERRY: TRUMP BACKS FIRST LNG TERMINAL ON EAST COAST: Energy Secretary Rick Perry christened the first natural gas export terminal on the East Coast Thursday at the Cove Point facility in Maryland outside of Washington.

Open for business: “We can become a reliable competitive alternative anywhere in the world, and we will,” he said in remarks opening the second natural gas export terminal in the country.

Trump’s support: Energy exports are key to Trump’s “energy dominance” agenda. “This president understands the power of energy and he is eager to unleash our bounty to the world, which is why he is so supportive of this infrastructure project right here at Cove Point,” Perry said. Perry said the president’s deal with the European Union on Wednesday to purchase more U.S. liquefied natural gas underscores the administration’s support for facilities like the one in Maryland.   

‘Help our partners’: “We stand ready, willing, able to help our partners increase their energy security, not only by increasing their diversity of supply, but of suppliers as well,” he said.

Number 2: Cove Point is the second LNG export facility in the country after Sabine Pass in Louisiana. Perry said four more facilities are nearing completion to begin shipping natural gas in the next two years.

30 countries: He noted that for the first time in 60 years, America became a net exporter of natural gas in 2017. “We’re now exporting natural gas to 30 nations,” he said.

Japan and India: Although some test cargoes had been sent to the U.K., the principal destination for much of the natural gas from this facility will be India and Japan.

The large Japanese conglomerate Sumitomo and the India-based Gail Ltd. bought a 20-year stake in the facility.

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TRUMP STRIKES DEAL WITH EUROPE TO BUY MORE US ENERGY: Trump hashed out a trade deal on Wednesday that will lead to Europe buying more liquefied natural gas from the U.S. to diversify its energy supplies.

Strengthening: Trump said the new steps taken to reduce trade barriers on both sides of the Atlantic will also be “strengthening” the U.S.-European strategic relationship on energy. “The European Union wants to import more liquefied natural gas, LNG, from the United States and they are going to be a big buyer,” he said after meeting with European Commission President Jean-Claude Juncker. The president added that the U.S. will help ease the process for shipping more LNG to the European Union under the new trade deal, but he did not give any details.

Russia: Trump wants the EU not to become dependent on Russian supplies of natural gas, specifically through the construction of the Nord Stream 2 pipeline through Germany. Trump called Germany a “captive” to Russia last week while in Brussels.

Europe will buy more LNG: Juncker said his intention was to “make a deal today,” and that is what happened. He said the European Union will import more natural gas from the U.S. as the number of LNG export terminals increases. “This is also a message for others,” he said.

Reality check: But experts said that European companies would still be responsive to market forces, since Russian gas supplied by pipeline is the cheapest option.

“Idea of significantly more LNG shipments to EU absurd,” Anthony Gardner, a former U.S. ambassador to the EU, said in a Twitter post. “It is not price competitive with piped gas.”

Indeed, Junker later added more nuance to what the deal means.

“We are ready to invest in infrastructure, new terminals, which could welcome imports of LNG from the United States and elsewhere, but mainly from the United States, if the conditions were right and price is competitive,” he said during remarks at the Center for Strategic and International Studies.

EPA’S WHEELER GIVES A NOD TO SOLAR ENERGY IN MARKING CLEAN-UP PLAN ANNIVERSARY: Environmental Protection Agency acting administrator Andrew Wheeler toured a solar power plant on Wednesday, calling the plant an example of the positive impacts of the agency’s flagship clean-up program under Trump.
Superfund meets solar: Wheeler toured the New Bedford solar plant as part of a visit to EPA’s Region 1 headquarters in Massachusetts to mark the anniversary of a 2017 task force report that began the process of removing contaminated industrial areas from the list of Superfund sites.
Pruitt didn’t frequent solar arrays: Scott Pruitt, the former EPA chief who resigned July 5 because of numerous scandals, had made the Superfund program a priority under the Trump administration. But he did not typically take pains to discuss the benefits of any EPA program on renewable energy development. One exception was his visit to a hydropower dam with a Federal Energy Regulatory Commission official earlier in the year.

One-year on: Wheeler was in Massachusetts to mark the anniversary of the release of the Superfund Task Force Report, which was issued under Pruitt’s watch. Pruitt used the report in an effort to move former industrial sites off the Superfund list of cleanup sites, to those that have been restored and made available for other uses.

‘Tremendous progress’: “EPA can proudly say that we have made tremendous progress moving sites toward deletion and expediting the cleanup and redevelopment of sites for the benefit of the surrounding communities,” Wheeler said in a statement.

Big clean-up underway: He also discussed the progress being made at one of the largest cleanup sites in the nation, the New Bedford Harbor Superfund Site, which had been left with an estuary polluted by high levels of polychlorinated biphenyls, a toxic chemical that EPA banned in the 1970s, and heavy metals.

RELEASE OF FUEL EFFICIENCY RULES DELAYED: The Trump administration won’t release its proposal for revised fuel efficiency rules this week, sources tell John and Josh.

Stakeholders had been expecting the EPA and National Highway Traffic Safety Administration to propose this week new emissions requirements for cars and light trucks, but that won’t happen until next week at the earliest.

Analyze this: The administration is working on buffering its argument that Obama-era fuel efficiency mandates should be less strict for safety’s sake, knowing it must have strong data to fight inevitable legal challenges.

The administration will resort to an argument frequently used over the last 40 years that less fuel-efficient cars can reduce traffic fatalities. Automakers, the thinking goes, will not be inclined to make design decisions that would reduce the weight of their cars in order to save fuel.

TRUMP ENERGY OFFICIAL ‘DISMAYED’ ABOUT ‘POLITICALLY DRIVEN’ RESPONSE TO PUERTO RICO’S POWER PROBLEMS: A Trump administration energy official criticized Puerto Rico’s state-run, bankrupt power utility Wednesday for organizational failures that slowed its response to repairing the island’s power grid after Hurricane Maria destroyed it in September.

Ten months after the storm, almost 500 customers still don’t have electricity.

‘Solve the politics’: Bruce Walker, the Energy Department’s assistant secretary at the Office of Electricity, said in unusually blunt terms that the Puerto Rico Energy Power Authority, or PREPA, is tarred by political interference, and called for removing oversight power of the utility from the island’s governor, Ricardo Rossello.

He said the Trump administration is spending $6 billion to help repair Puerto Rico’s power grid.

“I am a little dismayed because we keep dancing around the issue and no one wants to talk about it,” Walker said in testimony to the House Natural Resources Committee. “Let’s face it: we are dealing with a municipal entity that is politically driven. Solve the politics and take it away from the politicians.”

Walker said PREPA and a regulatory commission that oversees it should have independent boards with no one appointed by Rossello.

Nothing to see here: The tough words directed at Rossello come after the governor spurned an invitation to testify at a House Natural Resources Committee hearing focused on the “management crisis” at PREPA.

Rossello, the governor, released written testimony to the committee claiming he has helped Puerto Rico make “substantial progress” to upgrade the island’s power grid.

Modernize the grid: He said he is moving to privatize PREPA to lower costs, and is reforming regulations to make it easier for the development of microgrids, and other new technologies.

The governor also rejected allegations that PREPA is subject to political influence.

SAUDI ARABIA STOPS SHIPMENTS THROUGH RED SEA ROUTE AFTER ATTACKS: Saudi Arabia stopped shipping oil Wednesday through the Bab el-Mandeb Strait in the Red Sea after attacks by the Yemeni Houthi rebel group.

The world’s top crude exporter halted shipments through the key waterway after the Houthis attacked two of the Saudi’s tankers, the Wall Street Journal reported. The Saudis have been leading a coalition of Gulf states fighting a proxy war against the Houthis, who receive backing from Iran.

Backup plan: Oil that normally flows through the strait will be redirected around the Horn of Africa, lengthening the amount of time it takes the product to get to markets.

Around 4.8 million barrels of crude oil and products are transported through the strait at the entrance to the Red Sea every day, the Journal said.

Oil price response: Brent crude, the global benchmark oil price, rose 0.5 percent to $74.30 per barrel after news of the closed Saudi oil transport route.

AMERICAN AIRLINES TO CUT FLIGHTS BECAUSE OF RISING FUEL COSTS: American Airlines will trim planned increases in flights for the rest of this year and may grow more slowly than rivals in 2019 as the carrier grapples with surging fuel prices that eroded profitability.

Net income dropped 35 percent to $566 million in the three months through June, the Fort Worth, Texas-based company said, despite a 3.7 percent jump in revenue, which touched $11.6 billion.

Soaring problem: Rising fuel costs are hampering profits at several domestic carriers, including Delta Air Lines, which announced this month it would trim its flight schedule for 2018.

Jet fuel costs have risen nearly 40 percent since 2017 to $87.90 a barrel, according to trade group International Air Transport Association, as global oil prices, the biggest determinant of fuel costs, have increased this year.

BIPARTISAN SENATE DUO PRESSES TRUMP TO PROTECT NATION’S ENERGY GRID FROM RUSSIA: A Senate bipartisan duo is urging Trump to take action to combat the threat of cyberattack by Russia after reports showed the country had tried to bring down the U.S. electric grid last year.

Cantwell and Graham: Sen. Maria Cantwell of Washington, the top Democrat on the Energy and Natural Resources Committee, joined with South Carolina Republican Lindsey Graham on Wednesday in sending a letter to the White House over concerns “about Russia’s capabilities with respect to cyberattacks on our energy infrastructure.” The letter follows reports that Russian hackers gained access to the U.S. electrical grid last year, Department of Homeland Security officials said Monday.

‘Stronger action’: “We believe the federal government needs to take stronger action prioritizing cybersecurity of energy networks and fighting cyber aggression to match your Department of Energy’s outward facing commitment,” the letter continued.

Letter campaign: Cantwell has sent a number of letters to the White House over the past year on the risks posed by cyberattacks to the nation’s energy infrastructure, but this is the first time a prominent Republican has joined her.

RUNDOWN

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