Daily on Energy: Nuclear utilities scramble to stave off Trump uranium quotas

Trump is expected to meet with his Cabinet in the next few days to discuss recommendations the Commerce Department provided to him in April on placing firm quotas on uranium imports as a matter of national security.

Utility lobbyists representing Exelon, Duke Energy, and other owners of nuclear power plants, say the idea of placing limits on the amount of fissile fuel the nation imports is misguided, and Trump should reject any proposal that recommends such action.

Uranium mining firms had petitioned for the quotas to protect U.S. jobs in the mining sectors under trade provisions aimed at protecting national security.

The Ad-hoc Utility Group, an advocacy group for the nuclear utilities, argues that the mining jobs that could be saved are minimal relative to the jobs at stake in the nuclear power industry.

David Tamasi, the head of the group’s lobbying push, says the estimated jobs in the uranium mining sector are 150 employees, compared to the 100,000 jobs at nuclear power plants.

Tamasi told John that he understands that the president has been looking for ways to help stop both nuclear and coal power plants from closing prematurely due to market factors, but making the nuclear utilities’ fuel source more scarce, and hence more expensive, will only accelerate the closures.

Uncertain path by the president: It’s still not entirely clear what action the Commerce Department has recommended that the president take. “Our understanding is that they did not make a single prescriptive recommendation,” said Tamasi. Instead, the recommendations likely outlined a range of actions, from taking “no action” to imposing quotas.

Meeting at the White House: A Cabinet meeting with the president had been originally scheduled for Thursday, June 20, to discuss the potential actions. The meeting was abruptly canceled late Wednesday, say industry sources privy to the meeting.

Some say the abrupt departure of Acting Defense Secretary Patrick Shanahan had a lot to do with the meeting being canceled. Shanahan would cover national security issues at any meeting on imposing quotas, and the Defense Department is a large consumer of uranium for nuclear propulsion.

The meeting is now expected to take place next week. Canadian Prime Minister Justin Trudeau, however, is expected to push back against the idea of imposing quotas at Thursday’s bilateral meetings at the White House.

Canada is the U.S. top supplier of uranium, and imposing strict quotas on the U.S. neighbor to the north would do more to harm national security than improve it, say industry sources, who say Trudeau will make that argument in meetings with Trump.

Trudeau is in Washington to primarily discuss the president’s trade deal between U.S., Mexico, and Canada, referred to as the USMCA. He will begin meetings at the White House at noon. Trudeau will also be having meetings on Capitol Hill with Democratic House Speaker Nancy Pelosi and Senate Republican Majority Leader Mitch McConnell.

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EPA’S WHEELER ACCUSES CALIFORNIA OF BAD FAITH IN FUEL EFFICIENCY TALKS: EPA Administrator Andrew Wheeler accused California’s top air pollution regulator Mary Nichols Thursday of being “unwilling to be a good faith negotiator” over fuel efficiency standards that the Trump administration wants to roll back.

Wheeler said to Nichols, in a letter obtained by Josh, that Nichols’ claim that the oil industry swayed the proposed rollback “is beneath the responsibilities of the substantial position she holds.”

Wheeler sent the letter ahead of a blockbuster hearing hosted by two House committees at which EPA’s office chief Bill Wehrum testified about the administration’s proposed weakening of Obama-era fuel efficiency rules. Nichols, the chair of the California Air Resources Board, is slated to testify on a separate panel Thursday afternoon.

Democrats on the Energy and Commerce Committee, one of the panels hosting the hearing, launched an investigation Wednesday into whether the oil and refinery industries influenced the proposed weakening of auto efficiency rules. The Democrats are seeking to obtain documents from Marathon Petroleum, American Fuel and Petrochemical Manufacturers, American Legislative Exchange Council, Energy4Us, and Americans for Prosperity showing their potential involvement in the rule.

“This rollback picks one winner — the oil industry — while everyone else loses,” said Rep. Frank Pallone, D-N.J., chairman of the Energy and Commerce Committee, predicting uncertainty for automakers and consumers spending more on gasoline to power less efficient cars.

Running out of time for a deal: Wheeler’s attacks on Nichols comes as leading U.S. automakers have made an 11th-hour push to stop the Trump administration from dramatically weakening Obama-era fuel efficiency standards, warning doing so would bring “untenable” uncertainty and lead to drawn-out litigation.

Automakers want the Trump administration to return to the negotiating table with California, which, with more than a dozen other states, is poised to sue the administration in order to enforce stricter auto pollution rules to limit carbon emissions from transportation, the highest-emitting economic sector.

The Trump administration has proposed revoking a Clean Air Act waiver that California has, and more than a dozen other states follow, allowing it to set vehicle emission standards tougher than federal rules.

The EPA, with the National Highway Traffic Safety Administration, last August proposed freezing Obama-era fuel efficiency rules for cars and light trucks, instead of raising them each year, between model years 2020 and 2026. It is expected to finalize the rule in the coming months.

Negotiations seem over: Wheeler, and other administration officials, demonstrated little appetite for continued negotiations Thursday. Wheeler, in his letter, said that Nichols, after several meetings and conversations, offered a counterproposal to him that he did not view as a compromise, which he said would have kept the Obama-era standards while allowing one extra year of compliance.

Nichols plans to say in testimony Thursday that “EPA’s professional staff and California’s engineers were cut out of this proposal’s development” and argues the oil industry had undue influence on “former oil and coal industry lobbyists and lawyers who now work in leadership at the agency.”

Wehrum, in his testimony, downplayed internal documents showing EPA career staff questioning the assumptions of a safety analysis that NHTSA conducted justifying the weaker fuel economy standards.

These are “complicated issues,” he said, and “it is not surprising at all” there are disagreements.

DEMOCRATIC STATES LINE UP TO SUE OVER ‘UNLAWFUL’ COAL PLANT RULE: A host of Democratic attorneys general from across the country are vowing to sue the Trump administration for gutting President Barack Obama’s signature plan for reducing carbon emissions from coal plants.

Democratic states argue the Trump ACE rule, fails to meaningfully fulfill the bare-bones requirement of the federal Clean Air Act to reduce carbon emissions because it would keep coal plants alive that would otherwise retire.

“This move is more than ill-advised. It is unlawful,” California Attorney General Xavier Becerra said Wednesday afternoon at a press conference in Santa Barbara.

Becerra was joined by the attorneys general of Iowa, Colorado, and Oregon. The attorneys general of Connecticut, Illinois, Massachusetts, and Michigan also joined the promise of a lawsuit.

The list of states suing could grow, but EPA is unfazed: Attorneys general of 18 states and Washington, D.C., signed a comment letter to the EPA opposing the ACE rule before the agency finalized it.

Wheeler said Wednesday he expected Democratic states to sue and vowed that EPA would prevail, with the issue likely to be decided by a conservative majority Supreme Court.

“Everything we do we are going to be sued,” Wheeler told reporters at EPA headquarters. “So, I do expect some litigation. But I also expect us to prevail in the courts.”

COAL-HEAVY DUKE ENERGY JOINS LIST OF UTILITIES VOWING TO STAY COURSE: Large utility Duke Energy, which generates 33% of its electricity from coal, does not intend to alter its transition away from the fuel based on the EPA’s rule promoting efficiency upgrades for coal plants.

“Based on what we know today, we don’t believe the rule will have significant impacts on our business plans for our coal plants,” Erin Culbert, a spokeswoman for Duke, told Josh.

Culbert, however, added that Duke believes the ACE rule “fits within EPA’s statutory authority,” and noted states will decide how to implement EPA’s rule.

“We’ll have a better idea of the full impacts once the states we operate in finalize their plans,” she said.

Duke has reduced its carbon emissions by 31% since 2005, with the goal of cutting emissions 40% by 2030. Most of its zero-emission electricity comes from nuclear power (33%).

Duke joins other large utilities that have also told Josh they plan to continue transitioning to cleaner energy, and not reinvest in coal. That list includes American Electric Power, Dominion, and Exelon.

Tough to game out impact on coal: EPA’s Wheeler told reporters Wednesday that the agency has not projected how many utilities would be interested in upgrading its coal plants because of the rule.

“I don’t know who is going to invest in a coal fired power plant, but we are leveling the playing field to allow that investment to occur,” he said.

Speaking at EPA headquarters, Michelle Bloodworth, president and CEO of the American Coalition for Clean Coal Electricity, a trade group representing the industry, predicted the new rule would allow states to set standards that “will avoid the premature retirement of more coal units.”

Nearly 40% of America’s coal plants have retired or announced plans to retire.

HOUSE PASSES SPENDING BILL REJECTING TRUMP’S CLEAN ENERGY CUTS: The House passed a spending bill Wednesday for the Interior and Energy Departments that rejects cuts proposed by the Trump administration.

The $46.4 billion fiscal 2020 spending bill provides $37.1 billion for Energy Department, which is $5.6 billion more than the president’s budget request. Of that amount it gives $2.65 billion to DOE’s Energy Efficiency and Renewable Energy Office. Trump’s proposal would have gutted funding for the office.

It also dedicates $425 million to DOE’s Advanced Research Projects Agency-Energy, a clean energy research program that Trump sought to eliminate.

And it provides $1.65 billion for the Interior Department, an amount that is $528 million more than the White House budget request.

NATURAL RESOURCES COMMITTEE MOVES TO BLOCK OFFSHORE DRILLING: The House Natural Resources Committee approved a pair of bills Wednesday blocking offshore drilling in the Eastern Gulf of Mexico and along the Atlantic and Pacific Coasts.

Congress has a moratorium on offshore drilling in the eastern Gulf of Mexico that expires in June 2022. A bill approved by the committee would permanently impose a ban.

“Making the moratorium permanent is critical for Florida and for our military preparedness,” said Rep. Francis Rooney, R-Fla., who sponsored the bill.

The second bill preventing drilling in the Atlantic and Pacific oceans was sponsored by Rep. Joe Cunningham, D-S.C.

The oil and gas industry has been eyeing opening parts of the eastern Gulf of Mexico for drilling as part of a Trump administration proposal to expand offshore drilling into nearly all federal waters.

The Interior Department has delayed finalizing that plan, however, as it deals with the fallout of a federal court decision blocking drilling in the Arctic.

CLIMATE SOLUTIONS CAUCUS TO CONVENE FIRST MEETING: The bipartisan Climate Solutions Caucus is convening its first meeting of the new Congress on Thursday afternoon, Josh has learned.

The group is expected to discuss adopting ground rules for the caucus and imposing minimum environmental voting standards on interested members, to address concerns from detractors who say the group provides cover for vulnerable Republicans in swing districts.

The status of the Climate Solutions Caucus had been in doubt after it suffered huge losses of Republican members in November’s midterm elections, as Democrats won seats held by centrist GOP members in moderate districts.

At its peak before the election, the caucus had 90 members, split evenly between Democrats and Republicans. The remaining 20 or so GOP members who won reelection, led by Rooney, are expected to stay in the caucus. Sources say it will also add two new GOP members.

COONS LOOKING FOR REPUBLICAN COSPONSOR BEFORE INTRODUCING CARBON TAX BILL: Delaware Democrat Sen. Chris Coons said Thursday that he is searching for a Republican to join him in sponsoring a carbon tax bill.

Coons said at an event at the Brookings Institution in Washington that his measure won’t succeed unless it is a bipartisan bill. But, right now, it’s primarily a Democratic effort.

Coons also said that the Green New Deal desperately needs detailed pieces of legislation like his bill. Carbon pricing will be a “key piece” of enacting the Green New Deal, he said.

Coons appeared with Rooney at Brookings. Rooney has introduced his own carbon tax and dividend bill.

SOLAR INDUSTRY UPS CALL FOR EXTENSION OF KEY SUBSIDY: The Solar Energy Industry Association is calling on Senate leadership to extend the Investment Tax Credit for solar projects, a key subsidy for the industry that is on track to begin phasing out this year.

Abigail Ross Hopper, CEO of the industry group, said the tax credit is the best way to combat climate change until a more comprehensive bill is introduced.

“Until we have comprehensive legislation addressing climate change, the ITC is the strongest policy there is to incent clean energy development,” said Hopper in a letter to Republican and Democratic leaders. “We already know that the ITC has generated hundreds of thousands of jobs and injected more than $140 billion in private investment into the economy.”

The ITC will begin ratcheting down in 2019 from crediting 30% of a solar project’s cost, to just 10% in 2022.

SAUDI ARABIA IS BENEFITING FROM TRUMP’S IRAN SANCTIONS: The Trump administration’s sanctions on Iran’s energy industry have been good for Saudi Arabia’s oil business in Asia, the U.S. government said Wednesday.

The Energy Information Administration said the oil-rich kingdom has been able to sell more oil to Asia this year, despite leading OPEC oil production cuts that are meant to raise prices.

The increases in Saudi oil exports to China, Japan, South Korea, and Taiwan will likely continue through the rest of the year, now that Trump’s sanctions on Iranian crude oil are in full effect with no waivers being granted, the agency said.

The Rundown

Wall Street Journal Suspected Iranian oil caught in sanctions trap

USA Today Trump’s pick for UN post flips on climate change, breaks with White House: ‘real risk’ to planet

New York Times Rising temperatures ravage the Himalayas, rapidly shrinking its glaciers

Houston Chronicle EPA fast tracking chemical reviews amid Trump deregulation push, environmental group reports

Calendar

FRIDAY | June 21

9 a.m., Center for Strategic and International Studies holds a forum on sustainability and infrastructure as a preview for the G20 Summit in Japan.

Noon, 618 H Street NW. The National Capital Area Chapter of the U.S. Association for Energy Economics holds a discussion on “The Energy Workforce in Transition,” focusing on the opportunities and challenges facing workers in the energy extraction, generation, and consuming industries.

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.