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AGENCIES START TO FEEL THE STRAIN OF THE SHUTDOWN: Agencies key to President Trump’s deregulation agenda are starting to feel the strain of the shutdown, as the president prepares to hold a meeting on Wednesday with congressional leadership to discuss reopening the government.

The Environmental Protection Agency was one of the first to show signs from the strain, with the EPA’s general counsel tweeting out late last week that the agency had to shut down its website due to a lack of funds.

“Please note that all information on the EPA website may not be up to date, and transactions and inquiries submitted to the EPA website may not be processed or responded to until appropriations are enacted,” reads a notice on the agency’s website.

EPA has been key to Trump’s regulation rollback agenda, while also being criticized by environmental groups for removing “climate change” references from parts its website.

NOAA’s website stops updating: EPA’s announcement was followed by the Commerce Department’s climate-tracking agency closing down its website earlier this week.

The National Oceanic and Atmospheric Administration announced that its website “will not be updated,” but its web pages and social media channels will be maintained as “necessary to protect lives and property.”

Agriculture stops loans to farmers, utilities: The U.S. Department of Agriculture began taking bigger steps on Tuesday morning to ratchet down operations so soon after Trump signed a new multi-billion dollar farm bill that would dole out new conservation funds to farmers, and even initiate a $25 million climate change program.

The Agriculture Department will also cease all loans to rural electric utilities, which need the funds for grid improvements across large swaths of the nation that rely on the funds for keeping the lights on.

Trump’s insistence on funding a border wall and the Democrats’ refusal to include the funds has prolonged the government shutdown that is now in its 12th day.

Welcome to Daily on Energy, compiled 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.  

TRUMP HAILS LOW GAS PRICES AS NEW TAX CUT: Trump talked about low gasoline prices on Tuesday not once, but twice, even going as far as to call them a new tax cut.

“Do you think it’s just luck that gas prices are so low, and falling? Low gas prices are like another Tax Cut!” Trump tweeted.

The Energy Information Administration had reported a few days earlier that the average regular gasoline retail price fell by nearly 5 cents to $2.32 per gallon on December 24, 2018, which is more than 15 cents per gallon lower that at the same time last year.

The fall in the retail price of gasoline corresponds with a drop in the futures price of crude oil to around $48 per barrel. That’s around a ten dollar drop from the future price a year ago, according to EIA.

Oil prices rise and fall: But the price of oil could rise again if OPEC nations and Russia follow through on their plan for production cuts later this week. The nations said last month that they planned to curb oil output in response to lower oil prices in order to support drilling and keep revenue from the commodity high.

This decision would also benefit U.S. shale oil producers, who would struggle to keep production robust if the price of oil continues to fall.

But if OPEC does not follow through on its preliminary decision, it could be bad for producers and the oil commodities market.

“Well, J.P. Morgan said prior to the OPEC meeting early December, that if OPEC didn’t really cut by more than around 1.2 million barrels per day, and they did just for the first half, [not] for the full year, that we could gravitate toward … our low-oil-price scenario, which is $55 Brent for 2019,” Scott Darling, J.P. Morgan’s head of Asia Pacific oil and gas, told CNBC’s “Squawk Box“.

CUTTING THE RUSSIAN ELECTRIC CORD TO EUROPE: The Trump administration is launching its next effort in helping Europe wean itself off of Russian energy by lending U.S. technology know-how to help cut the ties to the Russian electric grid, says a senior Energy Department official.

Cutting the cord with Russia begins in Poland, where Trump committed to President Andrzej Duda “that we would take every available step to help them,” Deputy Secretary of Energy Dan Brouillette told John in an interview.

Trump had told European leaders earlier in the year that they are “captives” to Russian energy, while opposing a deal to allow Russia build the Nord Stream II natural gas pipeline through Germany to supply the European Union.

Diversifying energy supplies: The administration has pledged to new supply channels for U.S. liquefied natural gas to supplant supplies coming from Russia.

Beyond that, Brouillette explained, the U.S. is also helping the Baltic states cut their ties to Russia’s electric grid, which hinges on them connecting to the European Union via Poland.

The U.S. will also work with Poland to boost the electricity it generates from nuclear power to provide electricity.

ZINKE’S DEPUTY IS THE FAVORITE TO REPLACE HIM, BUT NO DECISION YET: Trump’s search to replace departing Interior Secretary Ryan Zinke did not conclude last month as it was expected to, and could stretch well into the new year.

Trump had promised on Dec. 15 to name Zinke’s replacement the following week, but the president has been preoccupied with the government shutdown fight, the resignation of Defense Secretary Jim Mattis, and the fallout from his decision to remove U.S. troops from Syria.

The favorite is familiar: David Bernhardt, the Interior Department deputy who is expected to be named acting secretary as soon as Zinke leaves office today, is still viewed as Trump’s safest bet to run the agency on a permanent basis, according to allies of his and sources close to the White House.

But Bernhardt has competition for the job:  At least two more candidates, Cynthia Lummis, a former congresswoman from Wyoming, and Rep. Steve Pearce, R-N.M. are expected to receive interviews for the job, sources tell Josh.

Pearce is leaving Congress after failing in a bid for governor of New Mexico, where he lost in November to Democrat Michelle Lujan Grisham, and is actively pursuing the role, a congressional staffer familiar with the process told Josh.

Others like Rep. Jeff Denham, R-Calif. and Sen. Dean Heller, R-Nev., both of whom recently lost re-election, are interested in the job, but it’s unclear whether they are serious contenders.

If you missed it over holiday break, read more of Josh’s report here.

BEFORE SHUTTING DOWN THE GOVERNMENT, CONGRESS PASSES BILL TO BOOST NUCLEAR ENERGY: Just before the government shutdown began Dec. 22, the House voted to make it easier to deploy advanced nuclear reactors.

The approval came a day after the Senate did the same. Trump is expected to sign the bill.

The bipartisan legislation is aimed at boosting nuclear energy and would modernize the federal government’s approval process for advanced reactors.

The legislation directs the Nuclear Regulatory Commission to create a licensing process for advanced reactors that is less prescriptive, allowing for faster approvals.

Solving nuclear’s future: Advanced reactors are seen as key to improving the fortunes of nuclear energy, which emits no carbon, giving it a level of bipartisan support for its potential to help combat climate change.

The smaller advanced reactors, still in the development phase, are supposed to be cheaper to operate and safer because they produce less waste.

BUT….BILL GATES SCRAPS ADVANCED NUCLEAR PROJECT IN CHINA: Technology tycoon and philanthropist Bill Gates announced last weekend that he will likely scrap an advanced nuclear-energy project in China planned by a company he co-founded called TerraPower because of the Trump administration’s policies toward China.

Gates is a vocal proponent of nuclear energy because of its carbon-free profile, and all-day availability. He argues that innovation in the industry can help it overcome hurdles.

“The problems with today’s reactors, such as the risk of accidents, can be solved through innovation,” Gates said in a post on his personal website.

The obstacle, Gates said, is an Energy Department policy announced in October to restrict nuclear technology exports to China to ensure the country is not using the technology to boost its military.

What was lost: His China project was set to be the first demonstration of TerraPower’s technology, which it calls a traveling-wave reactor, that uses depleted uranium as fuel, preventing proliferation and producing little waste.

Gates said TerraPower might be able to build its advanced nuclear project in the U.S., but only if there are changes to streamline regulations.

OCASIO-CORTEZ SAYS PELOSI’S CLIMATE CHANGE PANEL IS TOO WEAK: The special committee on climate change Democrats plan to have next year is too weak, according to Rep.-elect Alexandria Ocasio-Cortez, D-N.Y.

In a flurry of tweets on New Year’s Eve, Ocasio-Cortez said she approved of the committee’s establishment, but lamented that fellow Democrats rejected three proposals she championed as “too controversial.”

Where’s the Green New Deal? Ocasio-Cortez wants to empower the committee to draft a climate change bill by 2020 that would require 100 percent of electricity to come from renewable sources within a decade.

The so-called Green New Deal also would guarantee a job to anybody who wants to work in the clean energy transition, make every residential and industrial building more energy efficient, and build a national “smart” grid.

What the committee is missing: Democrats like Ocasio-Cortez, who made climate change a priority in their midterm campaigns, have expressed frustrations that the panel, as laid out Friday by leadership and to be run Rep. Kathy Castor, D-Fla., appears to have less power than its 2007 predecessor. The panel is not expected to have subpoena power and Castor recently told E&E News that lawmakers who have received donations from the fossil fuel industry won’t be barred from joining.

TRUMP EPA SEEKS TO WEAKEN EMISSION REGULATIONS FOR COAL POWER PLANTS: The Trump administration took steps last Friday to weaken Obama-era regulations meant to reduce the amount of air pollution emitted by coal power plants, but the actions may be too little, too late.

The EPA proposal would not do much to help the coal industry, since they have already complied with the regulations by either upgrading their plants or shutting them down.

Instead, what the EPA is seeking to reverse with Friday’s action is the Obama administration’s cost-benefit analysis for the mercury and air toxics rule, or MATS, since the Trump administration disagreed with the Obama-era finding.

RUNDOWN

Washington Post In shutdown, national parks transform into Wild West — heavily populated and barely supervised

Wall Street Journal Chesapeake Energy, fracking pioneer, bet on oil. Then prices plunged

The Atlantic Jay Inslee, likely presidential candidate, has a single-minded focus: pulling the country back from the climate-change brink

Axios Elizabeth Warren backs ‘idea’ of a Green New Deal

SPONSOR MESSAGE: In 2018 the United States continued to drill its way toward energy independence. With the country now producing record-setting amounts of oil and natural gas, the need for infrastructure to transport those resources – from the Bakken, Marcellus, and Permian shale formations all the way to New England – is more important than ever. Fortunately, midstream projects such as the now-complete Rover Pipeline and expanding Dakota Access Pipeline are setting the stage for safe and efficient energy transportation across the U.S. GAIN is hopeful that 2019 will be another momentous year for American energy. To learn more head to www.gainnow.org or follow us @GAINNowAmerica.