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INSIDE TRUMP’S ‘ENERGY DOMINANCE 2.0’ AGENDA: The Trump administration is set to make opening up “bottlenecks” in the U.S. energy system the centerpiece of an updated version of the president’s earlier “energy dominance” agenda it is fleshing out.

Whereas earlier versions of energy dominance focused more on increasing production and exports, the new push is meant to get more U.S. oil and natural gas to market by whatever means necessary.

At the same time, though, the administration is saying that it won’t shy away from renewable energy, and is starting a new effort to make solar energy part of its grid resilience strategy along with coal.

“The administration is looking at all infrastructure bottlenecks and it’s across the board,” Under Secretary of Energy Mark Menezes told John in an interview Thursday night.

The agenda includes building more pipelines for moving both natural gas and oil for export and for domestic consumption, he said.

“The administration is looking across the entire country either to alleviate the bottlenecks or to get products out to port, whether its export terminals themselves or pipelines, we are constantly looking for ways to improve that,” he added.

Menezes was speaking just after the Federal Energy Regulatory Commission, on a bipartisan basis, resolved a major point of disagreement in siting a new liquefied natural gas export terminal, which he described as a major achievement and the first step to relieving an LNG permitting backlog. Previously, the commission had been stalled by disagreement about how to account for greenhouse gas emissions in its decision.

Republican FERC chairman Neil Chatterjee called the decision a “breakthrough.” (Read Josh’s story on the decision here.)

The updated energy agenda includes fixing transmission lines: FERC could also be ready to resolve transmission line issues to bring more wind and solar to market, said Menezes.

“We have policies in place right now that provide incentives for transmission lines that will bring locationally-constrained renewables into the grid,” he said. FERC can approve financial incentives for transmission projects to help spur development where electricity is being held back by a lack of power lines.

The administration looks to boost batteries: The Energy Department is spending a lot of its financial resources on battery storage, seen as key to making renewables a competitive resource with coal and nuclear power plants, Menezes said.

The department is launching a new program to increase the amount of solar energy on the grid in order to improve the power grid’s “resiliency” — which relates to the grid’s ability to bounce back from extreme weather or even a cyber attack.  

“We just did a [Funding Opportunity Announcement] on increasing solar on the bulk power system to help with resiliency,” Menezes said. “So, we are committed to renewables.”

The future is natural gas and renewables: Menezes said that natural gas and renewable energy complement one another on the grid, and natural gas has been helping renewable energy to grow.

“That’s a great story, and we are going to continue to push for that,” he added. “The future for our electricity generation is natural gas and renewables.”

Nuclear is absent: With the exception of the Vogel nuclear power plant in Georgia under construction, the rest of the new power plants being built are all natural gas and renewables.

Menezes said the administration is “bullish” on natural gas power plants, which is a bit of a change given that the president over the summer said gas pipelines can be blown up in arguing in favor of coal as an “indestructible” form of power.

What about coal? Menezes says they still want a diverse array of energy resource, and continue to support coal, “we are very bullish on increasing renewables and natural gas domestically.”

The Energy Department is also in the beginning stages of developing a grid modeling system with the Department of Homeland Security that looks at “defense critical infrastructure,” ensuring the power generators and energy infrastructure exist that are critical to national security.

The grid modeling is being done as part of bipartisan legislation called the FAST Act that was signed into law under the previous administration, but that the Obama White House slow-walked in implementing, Menezes said.

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GOING AFTER CUOMO: Deputy Secretary of Energy Dan Brouillette, who also spoke to John, said if New York Democratic Gov. Andrew Cuomo’s focus is on reducing greenhouse gas emissions to combat climate change, then he should allow the pipelines in dispute to pass through the Empire State.

The administration is looking at all options to resolve conflicts with New York in developing pipelines to move natural gas from the shale fields of Pennsylvania to the energy-constrained areas of New England.

President Trump recently spoke to the governor earlier this month about allowing pipelines to cross the state to provide low-cost energy to the Northeast.

“We have to fix these infrastructure issues, we have to work with the State of New York to allow gas to transit the state, so places like Boston and other places in the Northeast have access to this clean fuel,” said Brouillette.

In the most recent cold snaps in 2018 and 2019, the Northeast had used vast amounts of oil and heating fuel to meet the increased demand, which is increasing greenhouse gas emissions and making the energy system there less efficient, the deputy secretary explained. Getting more natural gas into the region would change that.

“As they continue to burn fuel oil, as in the case of Boston, we are continuing to see these emissions numbers just continue to increase,” Brouillette said.

By any means necessary: Menezes explained that the Energy Department is looking at an array of ways to get more natural gas into the Northeast, including trucking, if the pipelines continue to be delayed.

There is also the option of shipping via cargo ship from a U.S. port into Massachusetts, for example. “They have three places over there where they could probably take LNG,” Menezes said. “We are looking at all options, we’ve talked to truckers and rail lines, there’s all kinds of different ways,” he said.

He underscored small marine cargoes for LNG under an order that Energy Secretary Rick Perry issued in 2018, which was meant to facilitate a lot of inland use of LNG.

“People think we are solely focused on the export of LNG, but there are other ways that you can get LNG around” domestically, he added. “To be sure, we are looking at every conceivable thing.”

US WILL STAY TOP GLOBAL OIL PRODUCER THROUGH 2020, ENERGY DEPARTMENT SAYS: The U.S. is on a solid trajectory to retain the title of the world’s largest oil producer well into next year’s presidential election season, the Energy Department said on Thursday.

The U.S. will not only maintain its lead spot as top producer, but will greatly exceed what it produced last year in both 2019 and 2020, the Energy Information Administration said in its weekly oil analysis.

Oil production will average 12.4 million barrels per day in 2019 and 13.2 million barrels per day in 2020, according to the agency, up from 11 million in 2018.

The gains in oil production will come primarily from the oil drilling taking place in the Permian shale region of Texas and New Mexico, according to the agency. But significant offshore oil production is also expected to come online in the Gulf of Mexico.

AUTOMAKERS FRET OVER TRUMP BAILING ON CLEAN CAR TALKS: Automakers fretted Thursday after the Trump administration confirmed it has bailed on negotiations with California over fuel efficiency standards.

The Automaker Alliance, which had prodded the administration to redo the Obama-era rules, urged both sides to come back to the negotiating table.

“We always knew achieving one national program would be challenging,” the trade group said. “But one national program is worth striving for because it is the best way to maximize fuel economy and carbon reductions while preserving vehicle affordability and employment.”

The Trump administration has proposed freezing Obama-era fuel efficiency rules for cars and light trucks, instead of raising them each year. It has also proposed revoking a waiver that California has, and other states follow, allowing it to impose fuel efficiency rules tougher than the federal one. The administration will likely finalize the rule in a similar form.

Can automakers have it both ways? Automakers, who prefer flexibility in the Obama rules, not an outright rejection, consider the Trump plan too extreme and worry about splitting the U.S. into multiple markets, where more fuel efficient cars are accepted in only parts of the country.

Global Automakers, another trade group, said Thursday it is “disappointed and concerned” that talks between the Trump administration and California failed.

Honda, the Japanese carmaker, also expressed disappointment, and insisted ‘there is a credible middle ground” for the parties to reach a deal.

Environmental groups were quick to criticize the automakers for playing to both sides of the debate, and challenged them to help encourage a resolution.

“Car industry still has a choice: Stick with team Trump and get a patchwork and years of lawsuits, or oppose the radical federal rollback and work with California. It’s not too late,” tweeted David Doniger of the Natural Resources Defense Council.

FORD TO PROBE POTENTIAL FLAW IN EMISSIONS TESTING: Ford acknowledged a potential flaw in its emissions testing Thursday, and has authorized an independent investigation.

Ford has notified the Environmental Protection Agency about the issue, after company employees reported discovering the potential testing flaw in September.

“We take the potential issues seriously and are following up with the company to fully understand the circumstances behind this disclosure,” the EPA said.

The company said it is unable to confirm yet that its computer models for evaluating fuel efficiency are inaccurate, and if it had reported bad data to consumers or regulators.

PERRY TO TOUR ARIZONA BATTERY SYSTEM AFTER UTILITY ANNOUNCES STORAGE PLANS: Energy Secretary Rick Perry is touring Arizona Public Service’s Festival Ranch battery installation on Friday.

His visit comes a day after the Arizona utility announced a major battery storage initiative, with plans to add 850 megawatts of battery storage and at least 100 megawatts of solar generation by 2025.

Breakthroughs in battery storage are crucial to addressing the variability of wind and solar power, allowing those energy sources to be used when the wind is not blowing, and sun not shining.

Arizona’s plan includes adding 200 megawatts of batteries to existing utility-owned solar projects, deploying 500 megawatts of new batteries, and contracting for 150 megawatts of third-party-owned storage.

RUNDOWN

Houston Chronicle Are Republicans wavering on climate change?

Axios How one Australian region kicked the coal habit

Reuters Saudi agrees $10 billion China refinery deal as crown prince visits

Wall Street Journal CEO of shale driller Pioneer Natural Resources retires abruptly

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