PRUITT MAY LAST LONGER THAN YOU THINK: Although President Trump hasn’t commented on Environmental Protection Agency Administrator Scott Pruitt’s ethics and spending allegations for weeks, the rumor mill is churning that he could have a lot of time left at the agency, partly because of the midterm elections.

• Elections coming: Some close the Trump transition team say Pruitt could last through the Nov. 6 elections.

Sources tell John that Congress is just beginning its investigations into the scandals over travel and security spending, firings and demotions, and close ties with lobbyists who planned lavish trips abroad. Those probes will go on through the summer.

• Deregulation key: The president would like to keep Pruitt around as the GOP faces a number of hurdles going into the 2018 election cycle. That’s because Trump considers Pruitt key to his deregulation agenda. Firing him now would undoubtedly reflect badly on the administration and would be hailed as a major victory by the Democrats.

“I assume we are about to head into the boring part of the festivities,” said a conservative with ties to the administration. Those “boring” investigations likely will be “punctuated in a few weeks by ‘reports’ … [and] unless something changes, he probably will survive into November.”

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FOURTH EPA STAFFER SET TO RESIGN: John Konkus, the second-in-command on the EPA’s communications staff, is resigning, the latest in a string of departures this week while Pruitt tries to fend off multiple scandals.

A Trump administration official told Josh that Konkus, the deputy associate administrator in EPA’s office of public affairs, will take a communications job at the Small Business Administration.

• Follow me out: Konkus’ boss at EPA is Liz Bowman, the top communications staffer at the agency who resigned this week to become director of communications for Sen. Joni Ernst, R-Iowa.

“John’s work ethic and positive attitude is unmatched,” a Trump administration official told Josh. “He will be a great addition to Administrator [Linda] McMahon’s team.”

• Trump loyalist: Konkus is a political appointee considered loyal to President Trump. He served on Trump’s transition team, one of the few to take full-time jobs at the EPA. Before that, he was a longtime GOP operative in Florida and served as the Trump’s campaign chairman in Leon County.

The Washington Post reported that Konkus was responsible for vetting hundreds of millions of dollars in grants that the EPA distributes each year to see whether they conflicted with the administration’s degregulatory priorities.

• Exodus: The EPA press shop has been increasingly on the defensive responding to a series of ethics and spending allegations facing Pruitt.

Konkus’ departure comes amidst other high-level departures of aides close to Pruitt. But, Pruitt’s chief of staff, Ryan Jackson, says scandals aren’t causing departures of top aides.

The EPA earlier this week announced the departures of Albert “Kell” Kelly, who led the agency’s Superfund program that helps clean up hazardous sites, and Pasquale “Nino” Perrotta, the head of Pruitt’s security detail, a major figure and witness in federal probes of Pruitt’s spending and ethics.

PRUITT PLANNED CANCELED ISRAEL TRIP WITH SHELDON ADELSON: Pruitt’s aborted February trip to Israel was planned with help from Sheldon Adelson, the major Republican donor, who has promoted an Israeli water purification company with which Pruitt was planning to announce an agreement with during the trip.

Pruitt was planning to announce an agreement with Water-Gen while in Israel, the Washington Post reports, a company whose technology Adelson was impressed by, but does not have a financial stake in.

• Deal struck: The EPA administrator had met with the Water-Gen executives last year, at the urging of Adelson. The EPA signed an agreement with the company in January to develop advanced mobile water generators that can take water vapor directly out of the air to provide drinking water.

Pruitt had hoped to formally announce it while he was in Israel, but the trip was canceled after reports of his high-expense foreign travel.

• Big plans: Adelson arranged parts of Pruitt’s itinerary, the Post reported, including a visit to a Jewish settlement in the West Bank and a meeting with Israeli Prime Minister Benjamin Netanyahu.

The canceled trip is the latest example of Pruitt relying on people from outside government to plan and schedule foreign travel.

• World tour: After taking office last year, the Post reported, Pruitt compiled a list of a dozen countries he hoped to visit and urged aides to help him find official reasons to travel there. He then used connected friends and political allies to make the trips happen.

Involving outsiders in travel plans is potentially problematic because federal law prohibits public officials from using their office to enrich themselves or any private individual, or to offer endorsements.

NEW REPORT RAISES ALARM OVER POWER PLANT CLOSURES: Global consulting firm IHS Markit is ringing alarm bells over the nuclear power plants set to close in the federally overseen PJM Interconnection energy market.

• Timing of report: The firm released a report Thursday, just days after PJM, announced it would conduct a study of what it calls “fuel scarcity” in the region, which is utility speak for losing power plants.

• ‘Severe’ consequences: The IHS report shows “the severe grid resiliency, environmental and financial consequences for customers served by the PJM Interconnection energy market that will likely result from uneconomic nuclear plant closures,” according to a summary. Five nuclear plants in the PJM footprint are slated to close in the next few years.

• A big market: PJM is the world’s largest competitive wholesale electricity market, controlling the movement of electricity in all or part of 13 Mid-Atlantic and Midwest states, as well as the District of Columbia.

• Perry’s decision: The report comes as Energy Secretary Rick Perry is being pressed by Ohio-based utility First Energy to use his authority under the Federal Power Act to keep several of its coal and nuclear plants open. Many believe the First Energy request is legally untenable.  

UTILITIES WARN PERRY TO KEEP ‘THUMB’ OFF THE ENERGY SCALE: Utilities are warning Perry to keep his “thumb off the scale” as he considers First Energy’s request.

• The big 202 question: First Energy wants Perry to use his section 202(c) emergency “must-run” authority under the Federal Power Act to keep the company’s coal and nuclear power plants running indefinitely in Ohio and Pennsylvania.

• Bad idea: A letter sent to Perry last week from the Electric Power Supply Association, which represents merchant utility companies, but released Thursday, says the Trump administration also is considering using a little-known provision included in the FAST Act transportation bill, which includes giving Perry the authority to issue emergency orders 15 days at a time to ensure grid security. The president must order the action before the energy secretary can act.

• Korean war answer: Perry may also be considering a wartime measure developed during the Korean War to keep power plants operating in support of the war effort.

• Picking winners and losers: The utilities’ letter details why the options are not the right course. They would distort the market in favor of certain resources, while going against basic free-market principles, according to John Shelk, the president and CEO of the utility group.

COAL INDUSTRY, FARMERS, REFINERS JOIN LAWSUIT TO STOP WASHINGTON FROM BLOCKING EXPORT TERMINAL: The coal industry, farmers and refiners are pushing back against the state of Washington’s “illegal” efforts to block the construction of a major export terminal that would increase energy exports to Asian markets.

• State obstruction: “Washington state’s actions are an illegal effort to interfere and obstruct interstate and foreign commerce of an essential energy commodity, in violation of the [U.S. Constitution’s] Commerce Clause,” said Hal Quinn, president and CEO of the National Mining Association, in seeking to join a lawsuit Thursday. “If states are ultimately given a veto over commodities that can be traded from the U.S., it would open the floodgates for states located at strategic export locations to disrupt national and international trade policies.”

• Beefing up the plaintiff list: The National Mining Association, National Association of Manufacturers, American Farm Bureau Federation, and American Fuel & Petrochemical Manufacturers all filed amicus briefs in the federal district court in western Washington on Thursday in support of coal-mining company Lighthouse Resources Inc.’s original lawsuit.

• Years of permit denials: The lawsuit challenges the state’s denial of permits required to build the Millennium Bulk Terminal on the Columbia River in Longview.

KEYSTONE XL DEVELOPER TO START PRELIMINARY WORK THIS YEAR: The developer of the Keystone XL oil pipeline in Montana will begin work in the fall before starting full construction in 2019.

The State Department recently sent a letter to Native American tribes, obtained by Reuters, notifying them of upcoming work by TransCanada as part of government consultation to minimize harm to their land in northeast Montana.

• Key for Gulf: The $8 billion Keystone XL pipeline would ship oil from Canada’s Alberta oil sands to Steele City, Neb., and then on to refineries along the Gulf Coast. But it has been challenged by environmental advocates worried about spills and climate change.

• Hold up: TransCanada has not officially made a decision on whether to commit to investing in the project, as it debates whether it’s still economically viable for the company after years of delays.

US CHARGES EX-VOLKSWAGEN CEO IN EMISSIONS SCANDAL: A federal grand jury has charged former Volkswagen CEO Martin Winterkorn with wire fraud in what prosecutors say was a long-running scheme to cheat diesel-emission standards for U.S. vehicles.

• Misleading the public: Winterkorn, 70, and other senior executives of the German carmaker conspired for about nine years to mislead investors and U.S. consumers about the ability of its “clean diesel” vehicles to comply with the country’s rules, according to an indictment unsealed Thursday in U.S. District Court in Michigan.

Winterkorn, who stepped down shortly after the federal investigation began, also faces three counts of wire fraud in a scandal that has weighed on the company’s U.S. stock for more than two years.

• The scheme: According to the indictment, Winterkorn and other Volkswagen executives implemented software that made VW and Audi diesel vehicles appear to meet U.S. emissions standards when they didn’t, thus boosting the company’s sales and, potentially, their own incomes.

The so-called defeat device was developed after VW executives realized the carmaker was unable to build a diesel engine that was both compliant and had market appeal.

• Environmental harm: Under normal driving conditions, which the software also recognized, the diesel engines’ emission-control systems were much less effective, allowing them to pump as much as 35 times more nitrogen oxides into the environment than U.S. regulators allowed, according to the indictment.

HOUSE TO VOTE NEXT WEEK TO ADVANCE YUCCA MOUNTAIN NUCLEAR WASTE SITE: The House is scheduled to vote next week on legislation that would move forward a long-stalled plan to store the nation’s nuclear waste in Nevada’s Yucca Mountain.

• Setting the table: The bill would direct the Energy Department to authorize an interim storage program before the Nuclear Regulatory Commission completes the licensing process for Yucca.It would establish a time limit for the commission to approve the project and would make a necessary land transfer.

House Energy and Commerce Committee Chairman Rep. Greg Walden, R-Ore., and Rep. John Shimkus, R-Ill., announced the pending vote. The committee approved the bill in June on a 49-4 vote.

AMERICAN PETROLEUM INSTITUTE WARNS TRUMP TO KEEP INVESTOR PROTECTIONS IN NAFTA: The American Petroleum Institute, and business groups including the Chamber of Commerce, implored Trump and his administration  to keep the North American Free Trade Agreement’s Investor-State Dispute Settlement, which allows a U.S. company to take legal action through third-party arbitration if a foreign government harms the company’s investment in that country.

• On the chopping block: The U.S., Canada and Mexico are negotiating a new version of the pact, and the Trump administration has targeted the investor provision, arguing it encourages American companies to invest internationally and move jobs overseas.

“We urge you to retain strong investment protections and Investor-State Dispute Settlement (ISDS) in NAFTA,” wrote API, the largest U.S. oil and gas lobbying group, and other business coalitions, in a letter Wednesday to Trump and other administration officials. “NAFTA’s current investment protections and ISDS support American jobs at home and protect U.S. businesses from discrimination abroad.”

• Energy tie: The investor protections matter to all types of industries, but especially energy, because investments usually require substantial time to bear fruit, such as the process of exploring, and then producing oil in the Gulf of Mexico.

MARATHON EYES BECOMING THE COUNTRY’S LARGEST EXPORTER OF FUELS: The CEO of Marathon Petroleum, Gary Heminger, sees his company’s plans to become the largest refining and transportation company in the nation as good for consumers and global demand for U.S.-made diesel and gasoline.

He told Bloomberg Thursday that the company’s planned $23.3 billion purchase of the fifth-largest refiner in the country, Andeavor, puts it on course “to be the largest exporter of refined products in the U.S.,” as well as the biggest refiner.

• Good for consumers: The merger would reduce csots by at least $1 billion, which is good for both the shareholders and consumers, he said. “When you look at where gas prices are. We are always trying to achieve lower cost in our system. At the end of the day that’s going to be very good for the consumers,” he said.

• The critics: Democrats want the Federal Trade Commission to look at how the deal could hurt consumers. Sen. Ed Markey, D-Mass., sent a letter to the FTC this week.

• Retail dominance: Marathon looks to dominate on the retail side with about 4,000 of its Speedway retail filling stations. It is one of the only major oil refiners to have a significant retail presence. The deal means it would have a big chunk of the market nationwide.

• Hydrocracking across America: It also would have the biggest hydrocracker capacity, meaning the big towers at refineries that can take oil that other refiners can’t handle to make more gasoline and diesel.

REFINER SAYS ETHANOL MANDATE DOESN’T NEED ‘PERMANENT’ FIX: The independent refining firm PBF said Thursday that the EPA’s dozens of exemptions from the Renewable Fuel Standard means there is no longer a need for President Trump to hash out a permanent fix between refiners and corn growers.

• The fix is in: “While there have been no permanent solutions, discussions on ways to fix the RFS and small refinery waivers granted by the EPA have had the effect of lowering RIN prices and thereby reducing a significant headwind for our business,” PBF CEO Tom Nimbley said on an earnings call.

After receiving the waivers from EPA, many refiners have reported that the costs for meeting the RFS’ ethanol mandate have been cut in half.

• Ethanol’s griping: But the ethanol industry says EPA is issuing the waiver in a way that is contrary to the law. The refinery industry said EPA is working within the law after a 10th Circuit Court of Appeals defeat last year that broadened its waiver authority.

RUNDOWN

New York Times Trump’s solar tariffs cause a scramble in the industry

Wall Street Journal Uranium loses power as U.S. miners seek protection

ProPublica One West Virginia county tried to break its dependence on the energy industry. It was overruled.

Washington Post Earth’s atmosphere just crossed another troubling climate change threshold

CBS News Pace of new climate change legislation has “slowed significantly,” study says

Wall Street Journal What does the railroad commission of Texas regulate? Oil and gas