Daily on Energy: China threatens tariffs on U.S. natural gas

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EXPERTS QUESTION TRUMP’S PROPOSED FUEL ECONOMY FREEZE: The Trump administration says it’s impossible to force cars to become more fuel efficient while also making drivers safer.

“There is a tension between calling for ever-increasing efficiency standards on one hand, and the obligation to have safe vehicles on the road,” said Environmental Protection Agency Assistant Administrator Bill Wehrum. “The more stringency we ask for, the more detrimental the effect it has on highway safety.”

Safety first: With that logic, the Trump administration made a choice with its proposal, announced Thursday, to aggressively weaken Obama-era fuel efficiency rules for cars and light trucks in coming years, deciding that road safety is more important than the potential harms of allowing vehicles to continue burning more fuel.

The EPA, with the National Highway Traffic Safety Administration, said its preferred outcome would freeze fuel-efficiency and greenhouse gas emissions targets at 2020 levels through 2026, instead of raising them each year as previously anticipated.

The agencies argued the Obama administration’s program, set in 2012, forcing automakers to double the fuel economy of their vehicles to reach an average of roughly 54 miles per gallon by 2025, would make cars and trucks more expensive and encourage people to keep driving older, less safe models.

But some experts question the Trump administration’s logic, and argue it is dramatically under-selling the benefits of tough fuel efficiency requirements.

‘Scary framing’: “To imply that if you try to clean up the car and truck fleet it creates risks for Americans, that framing is scary, and the data shows it’s wrong,” Jody Freeman, a professor at Harvard Law School who served as counselor for energy and climate change in the Obama White House, told Josh. “All of the data says you can have both safety and fuel efficiency.”

The Obama administration argued that mandating more fuel-efficient vehicles would improve public health, counter climate change, and save consumers money without risking safety.

Numbers game: Experts say the vastly different conclusions show how an administration’s assumptions of hard-to-interpret numbers can make a major difference in the policy it pursues.

“You can make numbers say whatever you want them to,” Rebecca Lindland, an executive analyst for Kelley Blue Book, told Josh.

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STUDY PROJECTS BIG CLIMATE CHANGE IMPACTS BY FREEZING FUEL RULES: A study released Thursday says that freezing the fuel standards, in a worst case scenario, could cause the U.S. by 2035 to increase its annual carbon dioxide emissions by an amount larger than today’s total annual emissions of 82 percent of the world’s countries.

‘Meaningful setback’: “In the context of the global effort to address climate change, this would be a pretty meaningful setback,” said the report by the Rhodium Group, an independent researcher.

Transportation recently surpassed power plants as the largest source of greenhouse gas emissions in the U.S., with the biggest share coming from cars and trucks.

EPA and NHTSA, however, estimate its preferred proposal would increase global carbon dioxide concentrations by 0.65 parts per million — an amount the agencies consider “negligible.”

Cost of oil: The Rhodium Group study also found that the extra oil that would be consumed as a result of the proposed freeze could cost consumers an additional $193 billion to $236 billion cumulatively between now and 2035.

The Trump administration’s own analysis shows that drivers will spend between $800 and $1,450 more for fuel over the life of new cars and trucks if it freezes fuel efficiency targets.

‘Reduced urgency’: But it argues that energy conservation is less important today, because the U.S. producing so much oil of its own.

“The U.S. is currently producing enough oil to satisfy nearly all of its energy needs and is projected to continue to do so, or become a net energy exporter,” the administration wrote. “This has added new stable supply to the global oil market and reduced the urgency of the U.S. to conserve energy.”

US POWER SECTOR COAL CONSUMPTION TUMBLES TO LOWEST LEVEL IN YEARS: Electric power sector coal consumption in the U.S. last year tumbled to a 35-year low, the Energy Information Administration announced Friday.

The amount of coal used in the power sector in 2017 was 36 percent lower than in 2008, when U.S. coal production reached its highest level.

Coal’s long decline: Last year was the the fourth consecutive year that U.S. coal consumption and coal shipments by all transport modes declined.

U.S. coal plants are closing as coal has become more expensive to produce, losing market share to cheap natural gas and renewables.

Trump’s gift: The Energy Department, at the request of President Trump, is considering subsidizing uneconomic coal and nuclear plants to stave off their closure.

CHINA THREATENS TARIFFS ON US LNG TO RETALIATE AGAINST TRUMP: China proposed a list on Friday of $60 billion worth of tariffs on U.S. goods, including liquified natural gas.

The move to tax American LNG would be a major setback for the Trump administration’s ambition to flood the world with cheap natural gas as a key component of its energy dominance agenda.

Right back atcha: Bloomberg reports that China is threatening to impose new tariffs on 5,207 kinds of American imports if the U.S. makes good on its pledge to impose a 25 percent tax on $200 billion worth of imported Chinese goods, up from an initial 10 percent rate.

As part of that, China says it would impose a 25 percent tariff on U.S. LNG.

Major stakes: Experts have warned that Trump’s trade war with China is threatening to discourage the world’s fastest growing LNG market from signing long-term contracts with American developers.

China’s demand for LNG is soaring, and it is relying more on the U.S., becoming the third largest destination for American gas behind Mexico and South Korea. Chinese imports of U.S. LNG increased from zero in 2015 to 17 billion cubic feet in 2016, to 103 billion cubic feet last year

CHINA WON’T CUT IMPORTS OF IRANIAN OIL DESPITE TRUMP SANCTIONS: The Trump administration cannot convince China to stop importing Iranian oil, according to a report Thursday.

China, however, has agreed not to increase its purchases of Iran’s crude, Bloomberg reported.

Zero tolerance tested: The Trump administration has said it wants all countries to stop buying Iranian oil by Nov. 4, as a way to punish Tehran after the U.S. left the Iran nuclear deal.

But that is considered unlikely. China, the largest importer of Iranian oil, could be the hardest to wean off it, analysts say, and may look to buy Tehran’s crude at a discount after U.S. sanctions spook other purchasers.

Iran is OPEC’s third largest producer, and sells around 2.4 million barrels a day, or more than 2 percent of global supplies, since the lifting of sanctions in 2016.

CONSERVATIVE GROUP LAUNCHES ATTACK ON PRO-CARBON-TAX REPUBLICAN: The conservative group American Energy Alliance launched a digital spending initiative on Thursday targeting Rep. Carlos Curbelo, R-Fla., for introducing a carbon tax bill.

The group is running a $75,000 digital ad campaign in Florida’s 26th congressional district, a purple region where Curbelo is up for re-election. American Energy Alliance said it will also target other lawmakers who support a carbon tax.

Stepping out: Curbelo last month became the first Republican to introduce national carbon pricing legislation in nearly a decade, and challenging his party to confront climate change.

Curbelo, a moderate whose South Florida district is already feeling the impact of rising sea levels, designed the bill to tempt Republicans into supporting a tax on carbon emissions by getting rid of the federal gas tax.

Economic impact: A study led by Columbia University’s Center on Global Energy Policy found that Curbelo’s legislation would cause little damage to the overall economy, while dramatically reducing planet-warming carbon dioxide emissions.

But the conservative group argues the bill would increase energy prices.

“By introducing H.R. 6463, Representative Carlos Curbelo has chosen to lend his name to a policy that would tax American families and small businesses, undermine our economic recovery, and increase government spending, while doing virtually nothing to improve the environment,” said American Energy Alliance President Tom Pyle.

GREEN GROUP TO CAMPAIGN AGAINST CLIMATE CAUCUS REPUBLICANS: The League of Conservation Voters started an Instagram ad campaign Friday against Republicans of the Climate Solutions Caucus, who the green group says are not doing enough to combat global warming.

The ads target Reps. Chris Collins and Dan Donovan of New York, Darrell Issa of California, and Lynn Jenkins of Kansas — although the latter two are not running for re-election.

Curious vote: Each of those lawmakers voted for a a non-binding, leadership-backed resolution approved July 19 declaring that a carbon tax would be harmful to the economy.

The targeted Republicans belong to the bipartisan Climate Solutions Caucus, which says it exists to develop policy solutions to climate change. It has 86 members, an equal number of Democrats and Republicans.

‘Empty rhetoric’: But critics say Republicans in the group, many of whom represent moderate coastal districts, are trying to cover themselves politically, without pushing for meaningful policy.

“Membership in the Climate Solutions Caucus is empty rhetoric if these representatives continue to vote in line with polluter special interests,” said Sara Chieffo, the League of Conservation Voters vice president of government affairs.

ENERGY DEPARTMENT SEEKS PROPOSALS FOR OFFSHORE WIND RESEARCH: The Energy Department issued a request Friday for proposals from industry on ways to improve research into the capabilities of generating U.S. offshore wind.

The agency is seeking ideas for potential new facilities that can conduct offshore wind research, and upgrades to existing facilities. It also wants ideas on specific tests and analyses that can be done at these facilities.

Global play: “Through this request we are looking to better understand our U.S. offshore wind testing capabilities, and how we can improve those facilities to compete in the global market,” said Mark Menezes, the Energy Department’s undersecretary of energy. Big opportunity: In recent months, the Trump administration has promoted its support for offshore wind. As the cost of onshore renewables drops, offshore wind, which produces strong gusts for long periods of time, represents perhaps the biggest clean energy opportunity of all. Building on offshore wind auctions that began during the Obama administration, the Interior Department is engaged in 11 active commercial leases for offshore wind along the Atlantic Coast, from Massachusetts to North Carolina.

RUNDOWN

Bloomberg Big Oil cheers, quietly, as Trump moves to ease auto standards

Wall Street Journal Top Trump donor agreed to pay Michael Cohen $10 million for nuclear project push

Houston Chronicle Offshore rigs getting ready for hurricane season’s worst

CNBC Over 5,500 churches in the UK embrace renewable energy

Vox A massive new study confirms a national energy grid would pay for itself

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Calendar

TUESDAY | August 7

9 a.m., Silver Spring, Md. The National Marine Fisheries Service holds a meeting to discuss the tentative U.S. positions for the 67th meeting of the International Whaling Commission in Florianopolis, Brazil, September, 2018.

WEDNESDAY | August 8

3 p.m., TBA. General Services Administration holds a meeting by teleconference of the Green Building Advisory Committee’s Building and Grid Integration Task Group on the integration of federal buildings with the electrical grid to enhance resilience.

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