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SENATE PUTS CLEAN ENERGY SUBSIDIES IN SPENDING DEAL: The Senate included a number of clean energy tax extenders in the bipartisan spending deal reached Wednesday.

The extension of the tax subsidies would go to both clean coal and nuclear power plants, in addition to renewable energy resources such as geothermal and a host of others.

Administration’s thoughts: Trump administration sources have told John that most of these advanced energy sources, including geothermal, are backed by the president, although at press time there wasn’t much they could say about the extenders being included.  

‘Awesome!’: “This would be an AWESOME one-two punch for clean and reliable energy! Budget deal includes not only a major expansion and extension of the critical 45Q carbon capture incentive but also extends the 45J nuclear production incentive. HUGE WIN if passed!!” tweeted Rich Powell with the conservative clean energy group ClearPath. The group has been influential with congressional Republicans in trying to reboot clean energy as a Republican issue, not one dominated by the Democrats.

‘Huge win’ for nuclear: “This is a huge win for clean energy,” especially when it comes to constructing new nuclear plants, Jeremy Harrell, managing director of policy for ClearPath, told Josh. He said the nuclear credit can be used for conventional reactors such as the Vogtle plant being built in Georgia and advanced reactors like what the company NuScale is doing with its line of small, less expensive nuclear power plants. “The credit is big for long-term investments in these technologies,” he said.

Utilities say bravo: Utility trade groups, we have learned, are excited for the nuclear production tax credit being included, but also are pleased to see carbon capture for coal included, and the investment credits for geothermal heat pumps included in the spending measure.

“We’re pleased the Senate agreed to include key energy tax provisions in the latest government funding bill,” said Jim Matheson, CEO for the National Rural Electric Cooperative Association, representing one of three major segments of the electric utility industry.

Good for consumers: “These tax credits enable electric cooperatives to keep current and future costs down for consumers by promoting energy efficiency and a diverse fuel mix.”  

ONE CLIMATE LAWSUIT GETS HEARD TODAY, AS ANOTHER FADES AWAY: San Francisco is ground zero Thursday for the first, and the fossil fuel industry hopes the last, oral arguments for a climate change lawsuit filed by local governments against oil and fossil fuel companies.

Federal or state court? “If the judge decides that the case should stay in federal court, that’s a win because there’s strong precedent in federal court to toss it out,” an industry source close to the fight tells John.

Judge William Alsup of the U.S. District Court for the Northern District of California will hear oral arguments in lawsuits brought against energy manufacturers by the cities of San Francisco and Oakland.

Problems could arise if the judge kicks it back to state courts. But even then, the industry is confident that could work in their favor, too. Oil companies and refiners are “confident that the state court will see through the blatant political motivations” in the lawsuit, the source said.

The fight: The two California cities filed suit against the country’s largest energy companies in the fall, arguing that they knew how climate change would affect the municipalities before disclosing information on those effects to the public.

The industry is framing the lawsuit as a few fee-seeking lawyers who are putting taxpayers on the line in search of a big payday. San Francisco and Oakland want the lawsuit to result in the energy companies paying for infrastructure upgrades, which they argue they need because of the effects of climate change caused by burning fossil fuels.

The National Association of Manufacturers is tracking the case closely through a special office it setup recently just to track climate lawsuits.

The manufacturers see the case going to state courts as being generally bad for the oil companies. “The California state courts are more likely to be sympathetic to the cities’ position, and these municipalities want to press their advantage,” according to a brief the group sent out Wednesday night.

More than just jurisdiction: From John’s review of the brief, it looks like the case could mean more than just the jurisdictional matters that some say will be key. “In deciding where these cases should proceed, Judge Alsup may be considering more than jurisdiction,” according to the manufacturers’ climate briefers. Judge Alsup “will be weighing in on whether climate change is inherently a local or national (or even international) issue.”

Two points being argued: While the cities are arguing “for the case to be heard in California court, the cities present climate change as an overarching challenge affecting every part of the world in their lawsuits,” according to the group’s overview.

Meanwhile, the Trump administration appears to be gaining a leg up in a separate climate case that was set to be heard in California this week, but was kicked down the road.

The case, Juliana v. U.S., was supposed to be heard Monday but was delayed based on legal maneuvering by the Justice Department to get the lawsuit thrown out. The 9th Circuit Court of Appeals is set to rule later this week on the fate of the trial, according to representatives for the 21 child plaintiffs who have been suing the government since the Obama administration.

The plaintiffs are planning for a summer trial, according to Julia Olson, co-lead counsel and executive director with Our Children’s Trust, who is representing the children. The case argues that government policy has exacerbated global warming and climate change.

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SENATE BUDGET DEAL REQUIRES SALES FROM OIL RESERVE: The bipartisan Senate budget deal announced Wednesday requires more sales from the Strategic Petroleum Reserve.

The deal would require the Energy Department to sell 100 million barrels of oil from the reserve, with 30 million barrels to be sold between fiscal 2022 and 2025, 35 million barrels in 2026, and another 35 million in 2027.

Facelift: In addition, the legislation mandates the Energy Department to make a one-time sale of $350 million worth of crude oil in fiscal 2018 to pay for modernizing the reserve fund.

Pay as you go: Congress recently has frequently used the strategic oil reserve, an emergency fund, for deficit reduction and other items.

The recently passed tax legislation also calls for sales from the reserve in 2026 and 2027.

And the Energy Department used the petroleum reserve during last year’s hurricane season.

Back me up: Congress created the Strategic Petroleum Oil Reserve 40 years ago as a response to the Arab oil embargo, as the U.S. faced an economically threatening disruption in oil supply. Oil in the reserve is stored in four underground sites along the coast of the Gulf of Mexico.

As of February, the reserve had 665 million barrels of crude.

PIPELINE TRADE GROUP WANTS TO KEEP FERC’S POWER OVER APPROVALS: Don Santa, president and CEO of the Interstate Natural Gas Association of America, said Thursday that the industry supports changes to rules that give the Federal Energy Regulatory Commission broad approval over interstate pipeline projects.

“The choice by Congress to provide the Federal Power Commission (and its successor, FERC) with latitude to interpret key statutory terms has enabled the commission to adapt efficiently to the evolving market and public policy imperatives,” Santa testified at a Senate Energy and Natural Resources hearing.

Clashes spark policy review: FERC announced in December it would take a “fresh look” at the way it approves natural gas pipelines amid growing clashes between environmental groups and the agency over climate change. The pipeline review will examine its 1999 policy statement on how it issues permits for new interstate natural gas pipelines.

Santa suggested the 1999 pipeline policy is adequate, as is the 1938 Natural Gas Act, and that few changes are necessary to both.

“The temptation to dictate FERC’s agenda via prescriptive tweaks to the NGA should be resisted,” Santa said Thursday.

State of play: He also expressed frustration with states such as New York that have resisted approvals of pipeline projects, by denying the issuing of important permits.

“Experience demonstrates that the pace of action – or inaction – on these other permits can delay and frustrate the timely and predictable approval of pipeline projects,” Santa said. “We respect the rights of states to protect the resources within their borders and support the ‘cooperative federalism’ framework upon which many of these environmental statutes are built. But one state’s abuse of its role in this relationship can affect the ability of other states and their citizens to enjoy the benefits of interstate commerce.”

Santa advocated for enhancements of the country’s natural gas pipeline network, and emphasized the need for more pipeline capacity to bring Permian Basin gas to market.

HUD TELLS STATES TO CONSIDER SEA LEVEL RISE WHEN REBUILDING FROM STORMS: The Department of Housing and Urban Development this week put out a notice to states receiving federal funding to help recover from last year’s three major hurricanes to “take into account” sea level rise when they build new structures in flood-prone areas.

The directive appears to mostly follow requirements established in the Obama administration requiring federally funded infrastructure projects to account for climate change and sea level rise when building in areas that could be vulnerable to flooding.

Trump rules: But six months ago, before Hurricane Harvey hit Texas, the first of the three major storms, President Trump, who is skeptical of the impacts of climate change, rescinded the the Federal Flood Risk Management Standard, established by former President Barack Obama in 2015.

‘Baked’ in policy: HUD spokesman Brian Sullivan told Josh that the agency, by asking states to describe how they will “take into account continued sea level rise,” is continuing its long-standing policy that dates to when Hurricane Sandy devastated much of the East Coast in 2012.

Sullivan said the agency is not deliberately contradicting Trump’s elimination of the Obama-era building standard.

“This is an expression of what we have baked into disaster recovery rules since Sandy, when we have asked grantees to consider future flood risk and other natural hazards in the development of their building plans,” Sullivan said. “It does not signal a departure from really anything.”

BEARS EARS RECEIVES NO MINING APPLICATIONS: No applications for mining claims have been filed for inside parts of the Bears Ears National Monument that are no longer protected after President Trump reduced the boundaries of the monument.

Trump’s rollback of Bears Ears became official Friday, allowing citizens and companies to make new oil, natural gas, and drilling claims.

Out of business: But in the five days since then, the Utah Division of Oil, Gas and Mining says it hasn’t received any permits for mining in the area.

Energy reality: Environmental groups have argued that shrinking Bears Ears could lead energy developers to seize on the land removed from protection to mine for oil and natural gas.

But there is limited opportunity for oil and gas drilling in Bears Ears and the area around it. Some uranium deposits are there, but prices are low and energy companies have downplayed their interest.

‘Truth always prevails:’ Republicans who support Trump’s actions on national monuments say the lack of interest in Bears Ears’ mining supports their claim the changes are not motivated by increasing energy development opportunities.

“This is what happens when fear mongering meets facts,” Katie Schoettler, a spokeswoman for House Natural Resources Chairman Rob Bishop, R-Utah, told Josh. “The truth always prevails. As we’ve said all along, this has never been about energy development.”

TAX BILL WAS A ‘WIN,’ BUT ‘SIGNIFICANT WORK’ AHEAD, SAYS UTILITIES’ TOP LOBBYIST:

The utility industry’s top lobbyist called the Trump tax reform bill a major “win” for the industry and its customers, while noting that there is still “significant work” in implementing the law.

Tom Kuhn, the Edison Electric Institute’s president and CEO, discussed the charged political landscape and the challenges that the industry faces this year during a major address to Wall Street on Tuesday.

Kuhn’s trade association represents the investor-owned utility industry, which represents 5 percent of the nation’s gross domestic product.

CALIFORNIA VOWS TO BLOCK TRUMP’S OFFSHORE ENERGY PLANS: California pushed back against President Trump’s offshore drilling plan Wednesday by vowing to block the transportation of oil if the proposal moves forward.

‘Not a single drop:’ “I am resolved that not a single drop from Trump’s new oil plan ever makes landfall in California,” said Lt. Gov. Gavin Newsom, chairman of the state’s land commission in a statement to Reuters.

The move would seek to block the transport of oil and natural gas from any offshore leases on the West Coast. The threat comes as a number of states on both sides of the country are pushing back against the Interior Department’s proposed five-year drilling to open up all areas of the U.S. coastline to drilling, reversing the limits imposed by the Obama administration.

“It is certain that the state would not approve new pipelines or allow use of existing pipelines to transport oil from new leases onshore,” the land commission said. The commission provides permits to pipelines in the state.

JUDGE’S ORDER COULD FORCE TRUMP’S EPA TO SANCTION COAL PLANT: A federal judge is ordering the Environmental Protection Agency to take steps that could lead to sanctioning a coal-fired power plant in Pennsylvania for increasing air pollution in Connecticut.

Judge’s orders: Judge Warren Eginton for the district court in Connecticut is giving the EPA 60 days to make a decision based on the state’s request for the agency to act under the Clean Air Act, according to a Wednesday decision.

The EPA missed the deadline for responding to the state’s formal claims to petition for relief as a downwind state.

State’s argument: Connecticut argued in its petition that the power plant has harmed its ability to meet ozone regulations while raising harmful air pollution in the state.

Let it linger: The petition has been lingering for nearly two years, which Eginton wrote “is clearly at odds with period of time that Congress deemed appropriate” for the EPA to review a Clean Air Act.

RUNDOWN

Reuters Texas flood: U.S. oil exports pour into markets worldwide

Wall Street Journal Trump’s border wall would start in a Texas wildlife preserve

Washington Post If the world builds every coal plant that’s planned, climate change goals are doomed, scientists say

Wall Street Journal Tesla says it is making progress on production issues of its Model 3 electric car

Politico GOP friendly fire imperils Trump nominees, including energy-related ones

Bloomberg Electric cars threaten to leave this European nation behind

Salt Lake Tribune Bill seeks to limit how Utah city and local officials speak up in favor of public-lands protections