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PHILADELPHIA REFINERY EXPLOSION SETS UP EAST COAST ENERGY BOTTLENECK: A new energy bottleneck is forming on the East Coast as the largest refinery in the region is not expected to be up and running for months, after suffering a big explosion Friday.
The massive explosion at the Philadelphia Energy Solutions refinery sent gasoline future prices soaring. A sustained closure of the facility could mean a longer fuel shortage, and with it higher prices.
“Gasoline inventories are already low and this will put additional pressure on the system,” said Mark Broadbent, principal analyst for North America refining at WoodMackenzie.
The loss in gasoline production comes as fuel consumption has reached a decade-high this summer ahead of the July 4 holiday next week.
Now that the fire has been extinguished, the magnitude of the impact on prices will be based on how quickly the refinery can recover, and the ability of other refiners to up production to fill in the lost supply, Broadbent added. The federal government’s analysis of diesel and gasoline prices, since the explosion, will be out on Wednesday.
Damage assessment: The explosion began in the part of the facility used to make high-octane gasoline. After the debris was removed on Monday, it became obvious that the entire gasoline-making complex was destroyed.
Reuters reported that the extent of the damage would mean gasoline production would be curtailed for an extended, undetermined period, as federal agencies launched an investigation to determine the cause of the explosion.
Refinery politics: The refinery is well-known, politically, for blaming the federally-mandated use of corn ethanol for the plant’s previous financial stress. It said it was forced to file for bankruptcy protection two years ago due to the high price of ethanol credits it is required to purchase to meet the mandate. It came out of bankruptcy proceedings late last summer.
Refiners like Philadelphia Energy Solutions are required to blend billions of gallons of ethanol into gasoline to meet the requirements of the Environmental Protection Agency’s Renewable Fuel Standard.
Because most U.S. refiners, however, can’t blend ethanol themselves, they are forced to buy ethanol credits from larger multinational companies like Exxon and Shell that have the blending facilities. The Philadelphia refinery said it spent hundreds of millions of dollars in 2017 to buy the credits.
Meanwhile, the ethanol industry is lobbying the Trump administration to curtail the use of special waivers that free refiners from having to blend ethanol under the Renewable Fuel Standard.
The Trump administration is reportedly reviewing the use of the refinery ethanol exemptions after President Trump visited Iowa earlier this month.
Refinery advocates say it would be a mistake to curtail the entire refinery waiver program, especially going into the presidential election season.
The Trump EPA is expected to propose the new annual renewable fuel blending targets for 2020 ahead of the July 4 recess. Renewable fuel groups are hoping to see a sizable boost in the amount of ethanol refiners are expected to blend to make up for previous refinery exemptions.
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INSLEE DOESN’T FEEL ‘THREATENED IN THE THRONE’ FOR CLIMATE POLICY KING: Jay Inslee is succeeding in raising the profile of climate change, if not in gaining traction in the Democratic presidential primary.
The Washington governor is polling at less than 1%, but he has set off an arms race on climate change in the Democratic primary, forcing competitors such as presumed front-runner and former Vice President Joe Biden to release plans on it before any other issue.
Inslee, in a recent interview with Josh ahead of the first Democratic debates, said he is trying to challenge better-polling Democrats on climate change, comparing his aptitude on policy with the skills of multiple-time MVP Stephen Curry of the NBA. Inslee once led his high school basketball team to a state championship.
“I don’t feel threatened in the throne,” Inslee said. “I feel confident my climate change position is the most scientifically sound and economically productive than any of the others. That shouldn’t be surprising because I have been at this for decades, while others have awoken to this recently. People will conclude mine is the gold standard.”
Inslee insists he will remain in the race to win and has no intention of taking a position as “climate change czar” in another Democrat’s administration, a proposal circulating among advocates who admire Inslee but fear he can’t win.
“I am running for president and not some other position,” Inslee said. “The moment calls for presidential leadership, and it can’t come from any other source.”
Read more of Josh’s profile of Inslee in this week’s Washington Examiner magazine.
CLIMATE-CONCERNED VOTERS PREFER BIDEN, POLL SHOWS: Democratic primary voters who say that candidates’ climate change plans are “very important” in their choice of who to vote for prefer Biden, according to a poll released Monday.
Biden is supported by 37% of climate-inclined voters, while Inslee only received 1% of the vote conducted by Morning Consult on behalf of the Sierra Club.
Bernie Sanders polled second at 19%, followed by Elizabeth Warren at 15%.
LABOR AND GREEN GROUP ALLIANCE ENDORSES NET-ZERO EMISSIONS BY 2050: The BlueGreen Alliance, whose members include the United Steelworkers and the Sierra Club, released a platform called “solidarity for climate action” that presses for a national strategy to achieve net-zero greenhouse gas emissions for the U.S. by 2050.
Their agenda includes “major” investments in domestic manufacturing and innovation, modernizing U.S. infrastructure, and a commitment to at least doubling funding of clean technology research, development, manufacturing, and deployment, including on carbon capture and storage.
The group also encourages increasing union participation throughout the economy, including in the clean technology sector. Unions have generally been skeptical of the “Green New Deal” and other aggressive decarbonization plans because of the potential to displace fossil fossil fuel workers, so the endorsement of the BlueGreen Alliance for net-zero emissions is a big deal.
“Progress on #ClimateAction must include labor & environmental advocates agreeing on a path forward,” said Rep. Paul Tonko, D-N.Y., the chairman of the Energy and Commerce Committee’s climate change subcommittee, in a Twitter post. “I applaud @BGAlliance for their work and I look forward to teaming up with its members to advance meaningful climate progress that lifts up American workers.”
RICK PERRY SAYS US STILL SEEKS NUCLEAR NONPROLIFERATION PACT WITH SAUDIS: Energy Secretary Rick Perry said Tuesday the Trump administration remains interested in a nonproliferation nuclear energy agreement with Saudi Arabia.
Perry acknowledged the U.S. wants to reach a so-called 123 pact with the Saudis before U.S. companies can share materials and equipment to build nuclear reactors.
“I made the statement to the leadership of the Kingdom if you want to send a message to the world that you are really serious and want to be adult members of the world community, you need to sign a very strong 123 agreement with the United States,” Perry said in testimony before the House Science Committee, which was hosting an oversight hearing.
Lawmakers from both parties have asked questions of Perry about recent U.S. approvals for companies to share nuclear information with Saudi Arabia, especially after the murder of journalist Jamal Khashoggi.
“All of us would be very concerned about a nuclear arms race taking off in the Middle East in one of the most unstable parts of the world,” Rep. Ami Bara, D-Calif., told Perry at the hearing Tuesday.
Perry has reportedly approved so-called Part 180 agreements allowing U.S. companies to share nuclear information with Saudi Arabia. Perry said such approvals are routine and have been authorized by previous administrations, but he said the Saudis would have to commit to a 123 agreement before U.S. companies could share actual physical materials for reactors.
The Rundown
New York Times Democrats will debate in a city under siege by climate change
Axios How Democrats came to oppose natural gas
Reuters Dirty oil crisis over for Russia, but contagion felt on high seas
Associated Press Oregon governor says GOP must return to state for cap-and-trade vote
Washington Post The US government has studied the longest oil spill in history — 14 years after the leak began
Calendar
TUESDAY | June 25
Noon, U.S. Capitol Visitor Center. Carbon Utilization Research Council, the Global CCS Institute, and the Carbon Capture Coalition hold another in a series of Carbon Lunches.
WEDNESDAY | June 26
2 p.m., 1324 Longworth. House Natural Resources Subcommittee on Water, Oceans, and Wildlife holds legislative hearings to consider bills to settle tribal water rights claims.
THURSDAY | June 27
10 a.m., 366 Dirksen. The Energy and Natural Resources Committee holds a hearing to examine options for the interim and long-term storage of nuclear waste and to consider S. 1234, the Nuclear Waste Administration Act.
