Daily on Energy: Time running out to stop Nord Stream 2

The Trump administration and lawmakers of both parties in Congress have complained about the project increasing European dependence on Russian energy, but the U.S. has failed to act against it.

The project appears all but inevitable after Denmark approved a permit Wednesday for the pipeline to go through the Danish seabed in its exclusive economic zone. With that move, the project — which is about 85% complete — could begin operations as soon as January, Goldman Sachs analysts said in a note.

“The U.S. didn’t really try to stop this project in many meaningful ways besides speaking against it,” said Nikos Tsafos, a senior fellow with the Energy and National Security Program at the Center for Strategic and International Studies. “For the past two years we’ve heard sanctions are coming on Nord Stream 2. But they haven’t come. In some ways, the Danish permit was sort of the excuse. Something else was slowing down the project, so the U.S. didn’t need to act as quickly. Now that’s gone and they have a very narrow window to act. The only outlet now would be a massive escalation.”

Trump is undeterred: An Energy Department spokesperson told Josh that it continues to “strongly believe Nord Stream 2 threatens the energy and national security of our allies in Europe and increases Russia’s control over the region’s energy supply.”

“The United States will continue to examine all tools at its disposal regarding this project,” the spokesperson added. “All options are on the table.”

President Trump has previously attacked Germany for being “captive” to Russian gas.

But he missed his window: There is little the U.S. can do now, analysts say. The Trump administration, despite repeated threats, has declined to use authority under a 2017 law enacted to impose sanctions on Iran, North Korea and Russia, called the Countering America’s Adversaries Through Sanctions Act, or CAATSA. It could also have acted without legislation under executive authority.

“If you wanted to sanction it, the party that could have done it and totally declined to do it is the administration,” said Richard Nephew, a senior research scholar at Columbia University’s Center on Global Energy Policy. “The problem is they have not had the political will to pull the trigger.” Nephew, who directed sanctions policy at the State Department in the Obama administration, speculated the Trump administration could fear upsetting TransAtlantic relations, and possibly Russia.

Congress stalls too: In response to White House inaction, the House and Senate Foreign Relations Committee have approved legislation sanctioning construction companies that lay pipes to build the pipeline, a targeted approach intended to not upset investors in the project, which include oil and gas giant Shell. Yet House and Senate leadership have not advanced the bills to the floor.

Ted Cruz, a lead sponsor of the bill, warned Wednesday that “time is running out” to stop Nord Stream 2, and urged colleagues “to quickly pass our bipartisan bill, halt this pipeline, and deprive President Putin the resources to fuel his expansionism and military aggression.”

The real impact: The Trump administration has tried to weaken Russia’s position in other ways, by encouraging the export of U.S. natural gas to Europe, partner in infrastructure development, and push through market reforms. The U.S. also may have succeeded in deterring future similar projects from Russia into Europe, Nephew said.

“The tools now exist to go after future pipelines,” he said. “That is the red line being established now by the administration and Congress. That actually is helpful.”

Welcome to Daily on Energy, written by Washington Examiner Energy and Environment Writers Josh Siegel (@SiegelScribe) and Abby Smith (@AbbySmithDC). Email [email protected] or [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.

KEYSTONE PIPELINE SHUT OFF AFTER LEAK: Officials said 383,000 gallons of crude oil spilled out of the pipeline, which leaked Wednesday near Edinburgh, North Dakota. The spill was estimated to be about 1,500 feet long and 15 feet wide Wednesday afternoon, state environment officials said in a news release.

“At this time there is no indication that it has impacted anybody’s drinking water,” Karl Rockeman, water quality director for North Dakota’s health department, told the Grand Forks Herald. “It appears to (be) contained within the area.”

The incident is the Keystone pipeline system’s third spill in less than three years. The Obama administration had halted a proposed more than 1,000-mile expansion of the pipeline — known as the controversial Keystone XL pipeline — but Trump reversed course and greenlit the XL project via presidential permit.

And the spill comes just one day after the State Department held a public hearing in Montana, where officials heard opposition to the agency’s draft supplemental environmental impact statement for the pipeline expansion.

MONIZ: REMOVING CARBON REQUIRES ‘ALL HANDS ON DECK’: Former Secretary of Energy Ernest Moniz says as many of the Energy Department’s offices as possible should be working to research and develop carbon removal technology.

The Energy Department’s innovation hub — the Advanced Research Projects Agency–Energy, or ARPA-E — should play an important role, but the department should also look beyond that to take advantage of programs like the science office and the fossil energy office, Moniz said Thursday at an event hosted by the Bipartisan Policy Center. Moniz now leads the Energy Futures Initiative, which outlined a federal research and development agenda for carbon removal in a report last month.

Moniz also said that while there’s more research and development to be done on the technology side, policymakers need to set up regulatory and legal structures to break down barriers to carbon removal — an industry the former secretary said could grow to be larger than the current global oil industry in order to meet climate targets.

But Moniz also said he is optimistic about the potential for a broad bipartisan political coalition developing to support carbon removal technologies, which include carbon capture, utilization and storage and direct air capture.

“This is getting real attention,” Moniz said. He added that though “often the pace is not the one we want,” he expects based on his own conversations with lawmakers that Congress will start making much stronger commitments to carbon removal in the next year.

WILL BIPARTISAN PUSH WARM TRUMP TO GLOBAL COOLANT DEAL? New legislation to slash potent greenhouse gas refrigerants in line with a 2016 global agreement already has the support of more than a dozen senators, with equal showing from both parties.

The bill — introduced Wednesday and led by Louisiana Republican John Kennedy and Delaware Democrat Tom Carper — would give the Environmental Protection Agency the authority to regulate hydrofluorocarbons, or HFCs, which are climate-warming refrigerant chemicals. That program would help U.S. industry meet a global deal to phase down HFCs, strongly supported by U.S. companies and environmental groups.

That global deal, though, hasn’t yet gotten the support of the White House, which would have to send it to the Senate for ratification. Appliance makers and chemical producers are hopeful the strong bipartisan support for the new bill will help break the ice with the Trump administration.

There is interest within the administration in “considering a legislative pathway to achieving the same goals, and frankly, the same benefits,” Samantha Slater, vice president of government affairs for the Air-Conditioning, Heating, and Refrigeration Institute, told Abby. She pointed to research showing implementing the global HFC deal could create as many as 33,000 U.S. manufacturing jobs.

ANOTHER STAB AT A CLEAN ELECTRICITY MANDATE: House Democrat Diana DeGette of Colorado is trying to succeed where others haven’t, unveiling a plan Wednesday for clean electricity standard.

Similar mandates have been adopted by more than half of U.S. states, and Democrats have been pushing the measure on a federal level, seeing it as more likely to attract bipartisan support than carbon taxes because the resulting higher energy costs would not be as obvious to people.

But Republicans have not signed onto previous Democratic nationwide clean electricity standard legislation introduced this year by Minnesota senator Tina Smith and New Mexico’s Ben Ray Luján, the fourth-ranked Democrat in the House.

That’s despite the bill having GOP-friendly provisions, such as allowing the use of nuclear power and carbon capture technology on coal plants to count toward the mandate, as well as wind and solar.

Degette’s bill, which she plans to formally introduce soon, has similar compromises. It aims to cut carbon emissions from electricity in half by 2030 and to net-zero by 2050.

The legislation would, among other things, create a system that would award each U.S. power plant with one “clean energy credit” for every megawatt-hour of electricity it produces without emitting carbon. Natural gas plants would be eligible for the credit, if they can demonstrate their suppliers are limiting leaks of methane. The bill would also award credits for carbon capture and storage.

HOUSE APPROVES ANTI-MINING AND DRILLING BILLS: The House approved a pair of Democratic bills Wednesday limiting mining and drilling in sensitive areas.

It voted 236-185 to pass legislation that would ban new mining leases for uranium, used to produce nuclear energy, in about 1 million acres of federal land around the Grand Canyon national park in Arizona.

“Some issues are powerful and popular enough to blast right through the usual Senate deadlock, and protecting the Grand Canyon is one of them,” said Natural Resources Committee Chairman Raul Grijalva of Arizona, the lead sponsor of the bill, expressing optimism this was more than a messaging exercise.

A second bill approved 245-174 would permanently ban federal oil and natural gas leasing on roughly 316,000 acres of land around New Mexico’s Chaco Canyon.

WORLD BANK MUST BE ‘ALL-OF-THE-ABOVE,’ GOP SENATORS SAY: The World Bank must eliminate barriers keeping it from supporting coal, oil, and gas projects, a group of Republican senators say.

“Over the last several years, the World Bank has essentially prohibited public financing of high efficiency power stations fueled by coal in the developing world,” the senators, led by Wyoming Repubican John Barrasso, wrote in a letter Thursday to World Bank President David Malpass.

The senators say by doing so, the World Bank is blocking developing countries from being able to “retire older and dirtier facilities and help them move to cleaner energy production.”

KEEP EFFICIENCY FUNDS AT THEIR HIGHEST, COALITION SAYS: Efficiency groups and several companies are urging lawmakers to maintain strong funding support for the Energy Department’s efficiency programs as they negotiate the department’s fiscal year 2020 spending bill.

“As our society grows ever more dependent on energy to power our daily lives, now is not the time to abandon or shortchange the important work carried out by U.S. DOE,” the coalition wrote in a letter Wednesday to top House and Senate appropriators.

The coalition includes efficiency advocacy groups like the Alliance to Save Energy, the Business Council for Sustainable Energy, and Advanced Energy Economy and companies like Daikin, DuPont, and Ingersoll Rand.

The group is also calling on lawmakers in the House and Senate to maintain what they say are critical aspects of budget report language related to staffing concerns in the Energy Department’s efficiency and renewables office and implementation of programs like ENERGY STAR, the Building Technology Office, industrial manufacturing programs, and more.

SMITH: DEFENDING THE OIL IS LEGIT: House Armed Services Committee Chairman Adam Smith, a Democrat, is cool with Trump’s decision to reposition U.S. forces in Syria to protect oil fields in the eastern part of the country, while opposing his overall Syria policy as “incoherent.”

“A part of what they are doing in protecting those oil fields is trying to make sure that they don’t fall into the hands of ISIS, because when ISIS controlled this territory, one of the things that they did was they took that oil and they sold it on the black market to make money and finance their terrorist ambitions,” Smith said on CNN Wednesday.

“So, yes, I do think it’s an acceptable mission, but it is an incoherent policy,” he added. “Because if you are willing to show up and protect the oil fields from ISIS, why were you not willing to protect the Kurds, who are the single most important group in fighting ISIS? That’s the inconsistency and the policy that’s deeply troubling.”

The Rundown

Associated Press Trump’s Rust Belt revival is fading. Will it matter in 2020?

Reuters Former Exxon CEO Tillerson denies misleading investors in climate case

New York Times White House pressed car makers to join its fight over California emissions rules

Washington Post The ice used to protect them. Now their island is crumbling into the sea

New York Times EPA to foll back rules on coal toxins

Bloomberg Russia is now sending its main crude oil through the Arctic

Calendar

TUESDAY | NOVEMBER 5

10 a.m. 366 Dirksen. The Senate Energy and Natural Resources Committee holds a confirmation hearing for James Danly to be a member of the Federal Energy Regulatory Commission and Katharine MacGregor to be deputy secretary of the Interior