Since President Trump took office, Congress has yet to consider major legislation directly affecting the natural gas and oil operations. (Executive regulations, of course, are another matter entirely).
Still, when it could, the oil lobby scored wins with Republican lawmakers. When the GOP turned to overhauling the tax code, for example, oil and gas companies succeeded in expanding tax breaks and securing the long-sought right to explore the Arctic National Wildlife Refuge for oil.
Now that the legislative conversation has turned to an infrastructure bill, the American Petroleum Institute (API) — the largest oil and gas lobbying group, which represents all corners of the industry — issued a reminder to lawmakers who attended its annual luncheon on Tuesday. They included Sen. Joe Manchin III (D-W.Va.), House Natural Resources Committee Chairman Rob Bishop (R-Utah) and House Energy and Commerce Committee Chairman Greg Walden (R-Ore.).
The message: Pipelines count as infrastructure, too.
“We’re all for the highway bills. We’re all for bridges and roads,” Jack Gerard, API’s president and chief executive, said at the Ronald Reagan Building and International Trade Center, just blocks from the White House. “But when you look at the two together, I like to remind people this private-sector investment in the energy arena is literally twice as large as what they’re talking about in terms of the highway bill. This is a big deal. It’s a big opportunity. We’re trying to remind people: Keep us part of the broader infrastructure plan.”
The oil lobby does not want much in terms of money, per se. “We’re not looking for a government program,” Gerard said. “We’re not looking for funding.”
Instead, its wish list includes something seemingly more mundane: faster permitting for pipelines and other projects.
For that, API wants changes at the Federal Energy Regulatory Commission to streamline the review of proposals to build liquefied natural gas terminals and interstate natural gas pipelines.
FERC’s critics say the independent five-member panel, which gained four Trump-chosen members during the president’s first year in office, has a cozy relationship with the oil and gas sector.
This week, the oil industry notched a win, for example, when FERC unanimously rejected a Trump administration proposal to prop up nuclear and coal power plants — a decision renewable advocates also supported. Even before Trump took office, over the past three decades, FERC approved all but two of hundreds natural gas pipeline proposals, according to a recent investigation by the Center for Public Integrity and StateImpact Pennsylvania.
“There are definitely needed reforms” said Kelly Martin, director of the Sierra Club’s Beyond Dirty Fuels campaign, “but streamlining and making it easier and quicker to approve pipelines is not one of them.”
Martin endorses some ideas floated by FERC’s longest-serving commissioner, Cheryl LaFleur, an Obama nominee. Currently, FERC considers whether a gas pipeline has secured contracts to sell fuel as a sign of whether there is an economic need for it — even when the company is selling gas to itself. LaFleur has written, FERC should consider the “specific end use of the delivered gas within the context of regional needs” — that is, whether consumers really demand more energy — as evidence of economic need.
The fiercest pressure, though, to stop major fossil fuel infrastructure, such as the oil pipelines Keystone XL and Dakota Access, has come not from federal officials but from local protesters. Environmental activists successfully lobbied the Obama administration to halt construction of the two projects, only to be reversed in one of Trump’s first executive orders. That decision was the first in a series of long-sought policy wins for API and other oil interests in 2017.
On Tuesday, Gerard singled out New York, where activists and the administration of Democratic Gov. Andrew Cuomo have sought to stop pipelines that would deliver gas from the Marcellus Shale formation in Pennsylvania to New England, a region with frigid winters but no substantial fossil fuel resources of its own.
When temperatures fall during cold New England winters, energy officials there blame soaring heating bills on the lack of gas pipelines.
“During this past winter,” Gordon van Welie, chief executive of ISO New England, which oversees operation of the electric grid in the region, said in 2014, “New England faced severe natural gas pipeline constraints that drove gas and electricity prices to record levels.”
Gerard made an appeal not just to Washington officials, but to New York’s governor, a possible contender against Trump in 2020.
“FERC has an appropriate role; the states have an appropriate role,” Gerard said. “But if the systems are used, if you will, to obstruct the development of much-needed infrastructure, then we will push, as I know others will, to make sure there’s certainty and predictability in the process.”
He added, “Our hope and expectation is Governor Cuomo and others will look at the impact of their decisions on many Americans well beyond their borders.”
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— Interior Secretary Ryan Zinke said Tuesday Florida would be “off the table” when it comes to the administration’s new plan to open most U.S. ocean waters to possible oil and gas drilling: “I support the governor’s position that Florida is unique and its coasts are heavily reliant on tourism as an economic driver,” Zinke said in a statement. “As a result of a discussion with Governor Scott’s and his leadership, I am removing Florida from consideration for any new oil and gas platforms.”
Zinke cited conversations with Florida Gov. Rick Scott (R), who is not-so-coincidentally a possible GOP challenger to Sen. Bill Nelson (D-Fla.) in November. As Politico’s Marc Caputo, Ben Lefebvre, Mark Dixon and Bruce Ritschie succintly put it: “Donald Trump delivered a big political contribution to Rick Scott on Tuesday as the Florida governor contemplates a bid for U.S. Senate: a pledge to spare Florida from administration plans to expand offshore oil drilling nationwide … Zinke made sure that the term-limited governor got all the credit.”
See tweet below:
— Secretary Ryan Zinke (@SecretaryZinke) January 9, 2018
That justification — taking into considering “the local and state voice” — begs the question: Will the Trump administration acquiesce to the requests of Democratic governors from California and elsewhere who do not want offshore drilling near their shores? Or as Business Insider’s Josh Barro asked:
How, after this statement, do you justify extending the program to other states where the governors object, which is most of them? https://t.co/jH53QRSDIR
— Josh Barro (@jbarro) January 9, 2018
Nelson called Zinke’s announcement “a political stunt orchestrated by the Trump administration to help Rick Scott, who has wanted to drill off Florida’s coast his entire career.”
The news sparked a reaction from other elected Democrats besides Nelson who oppose drilling. Sen. Tim Kaine (D-Va.) asked why Virginia hadn’t received the same commitment:
Virginia’s governor (and governor-elect) have made this same request, but we have not received the same commitment. Wonder why… https://t.co/9HgvOWC1p6
— Tim Kaine (@timkaine) January 10, 2018
Gov. Andrew Cuomo in New York:
— Andrew Cuomo (@NYGovCuomo) January 10, 2018
Rep. Ted Lieu (D-Calif.):
Taking #Florida off the table for offshore drilling but not #California violates the legal standard of arbitrary and capricious agency action. California and other coastal states also rely on our beautiful coasts for tourism and our economy. I believe courts will strike this down https://t.co/xWyB69F7Gg
— Ted Lieu (@tedlieu) January 10, 2018
And finally, California Attorney General Xavier Becerra:
.@SecretaryZinke: California is also “unique” & our “coasts are heavily reliant on tourism as an economic driver.” Our “local and state voice” is firmly opposed to any and all offshore drilling.
If that’s your standard, we, too, should be removed from your list. Immediately. https://t.co/T6W6JaPCPh
— Xavier Becerra (@AGBecerra) January 10, 2018
— EPA staff size slashed: The Environmental Protection Agency is set to slash its staff nearly in half by the end of Trump’s first term, bringing it to Reagan-era lows. The Washington Examiner’s Paul Bedard reports the decrease will come mostly through retirements rather than cuts: “And if just those slated to retire by early 2021 leave, Administrator Scott Pruitt and his team will have reduced a staff of nearly 15,000,to below 8,000, or a reduction of 47 percent.”
— Meanwhile, Pruitt’s own hires are probed: The EPA’s internal watchdog announced it will review its chief’s hiring practices. E&E News’s Kevin Bogardus reports the agency’s inspector general “will begin ‘preliminary research’ on the administrator office’s use of its authority under the Safe Drinking Water Act to fill ‘administratively determined’ positions.” The Government Accountability Office, the investigative arm of Congress, last year began its own probe into the hiring at the request of Sens. Tom Carper (D-Del.) and Sheldon Whitehouse (D-R.I.).
The two Democrats aren’t stopping in pressing the EPA on its hiring practices: This week, they asked the agency to hand over records on two appointments to an advisory panel.
— Murray’s fury: Murray Energy chief executive Robert E. Murray, who had urged the Trump administration to prop up coal-fired power plants in electricity markets, blasted FERC on Tuesday after the commission rejected the administration’s plan, calling the decision a “bureaucratic cop-out,” The Post’s Steven Mufson reports.
Meanwhile, Lisa Friedman at the New York Times obtained a much-discussed memo laying out Murray’s wishlist for regulatory rollbacks, presented to the Trump administration. Her takeaway: “Nearly a year later, the White House and federal agencies have completed or are on track to fulfill most of the 14 detailed requests, even with Monday’s decision” by FERC.
— House Climate Caucus gets new members: Four lawmakers, two Democrats and two Republicans, joined the House Climate Solutions Caucus on Tuesday. Reps. David N. Cicilline (D-R.I.), Elizabeth Esty (D-Conn.), Dan Donovan (R-N.Y.) and Mark Sanford (R-S.C.) joined the group, which now has 66 members split evenly between both parties, according to a news release.
— The latest on Puerto Rico and the U.S. Virgin Islands:
- Puerto Rico’s governor, Ricardo Rosselló, wants to limit the role of the territory’s energy regulator by combining it with the other regulators. E&E’s David Ferris reports the proposed consolidation would save the island’s government $14.5 million in the first year and another $74 million over five years:
“Reducing government expenses are key to reducing the territory’s $70 billion debt. However, the plan was immediately opposed by one of the Energy Commission’s creators, who said a robust, energy-specific regulator is key to reforming Puerto Rico’s electricity sector so it can draw private investment and recover from the ravages of Hurricane Maria.”
- Worth a read: In the aftermath of Hurricane Maria, Puerto Rican political leaders are moving forward with a push to become the 51st state. The New York Times’s Carl Hulse reports: “The route to statehood seems as impassable as some of the island roads in the aftermath of the unimaginably fierce hurricane last September. But those behind the statehood movement say they will not be deterred and acknowledge it will take dedication and perseverance to overcome the resistance and inertia standing in the way of statehood for Puerto Rico.
The debilitating storm that has left some parts of the island still without power has had the benefit of raising American awareness about the island. The statehood push was planned before the hurricane, but the storm has given it new impetus.”
- Meanwhile, officials said Tuesday most of the power has been restored to customers in the U.S. Virgin Islands months after Hurricanes Irma and Maria hit the islands. The New York Times’s Patricia Mazzei reports: “Getting to 92 percent power required the work of more than 1,000 linemen — all but a handful of them from the mainland — to install 8,851 poles, 5,142 transformers and 5.6 million feet of wire… More than 600 bucket, utility and trailer trucks, and derricks to dig holes in the islands’ rocky terrain were shipped in by barge. Many of the linemen were housed aboard two cruise ships. The Virgin Islands had to compete for contract workers and equipment with Texas, Florida and Puerto Rico.”
— Coal decline forecast: The U.S. Energy Information Administration’s monthly short-energy outlook Tuesday predicted declines in the nation’s coal production and in the use of coal for electricity through next year, The Post’s Chris Mooney reports. The culprit? Cheap natural gas and coal plant retirements.
Mooney writes: “By 2019, the report forecasts, natural gas will provide 34 percent of U.S. electricity and coal 28 percent — leaving gas as the top fuel for U.S. electricity generation, a role held by coal as recently as 2015. In 2003, coal provided 51 percent of U.S. electricity and natural gas just 17 percent, which gives some sense of the magnitude and the rapidity of the change.”
Even with Trump’s focus on coal, the report suggests the administration will be able to do little to alter coal’s trajectory given the glut of natural gas.
As one MIT economics professor, Christopher R. Knittel, simply put it: “I think what the administration is not realizing is it’s not really regulation that’s killing coal; it’s cheap natural gas.”
— Meanwhile, the EIA’s near-term forecast for the oil and gas sector is sunny. Per CNBC: “American drillers will pump enough oil in 2019 to potentially surpass Saudi Arabia’s output and rival the world’s current top producer, Russia.”
— Exxon tries to turn the tables: ExxonMobil has threatened a counter-lawsuit against multiple local governments in California that themselves have sued the oil giant. Reporting on a Monday court filing in Texas, CNNMoney writes: “Exxon argued that these California cities and counties have contradicted themselves by admitting in bond sales that climate change risks are unpredictable … Exxon (XOM) said that while these cities and towns warned that ‘imminent sea level rise presented a substantial threat to its jurisdiction … none of the municipalities disclosed to investors such risks.’ “
Failing to disclose climate risk is a charge activist shareholders have leveled against Exxon — and also a subject of current investigation by the attorneys general in New York and Massachusetts. In California, Exxon wants to depose 16 individuals, including city officials from Oakland and San Francisco who are leading the lawsuit.
— First the fires then the rain: Storms have caused deadly mudslides and floods in fire-ravaged Southern California. Flood and debris have swept away buildings and overwhelmed roads, especially in areas left barren and full of debris after a December of wildfires, Max Ufberg, Eli Rosenberg and Marwa Eltagouri report. At least 15 people have been killed and thousands have been forced to evacuate as the southern part of the state sees another disaster. “If you can look uphill from where you are and see a burned-out area,” the National Weather Service warned, “you are at risk.”
One Santa Barbara County fire official described a grim scene: “Inside the debris we’re finding bodies…This whole mountain has been burned, and anytime water hits it’s not shedding into any bushes because they’re all burned. Any water that hits the surface is coming at us and causing debris and mud to flow… This is just the first storm. It’s probably going to happen again and again.”
On Tuesday, the freeway connecting Santa Barbara to Ventura, where fires ravaged huge areas of land just last month, was shut down for more than 30 miles. A terminal at Los Angeles International Airport was partially flooded. In Santa Barbara County, officials evacuated nearly 7,000 residents from foothill areas, the Los Angeles Times reported.
A view of the mudslides from the Ventura County Aviation Unit:
View from the air in Montecito. Areas that had been roadways, driveways, and homes, are now unrecognizable due to the large amount of mud and debris flows. pic.twitter.com/dbsUPw3mrL
— VenturaCoAirUnit (@VCAirUnit) January 9, 2018
A clip from Montecito from Los Angeles Times’s Melissa Etehad:
Olive Mill Rd & N Jameson Ln in Montecito unrecognizable. Feet of mud and debris line streets and sidewalks. Businesses damages. Evacuees gasped at the sight of their community in near ruins. pic.twitter.com/uM863AyI3h
— Melissa Etehad اتحاد (@melissaetehad) January 10, 2018
Here are radar images showing the storms across Southern California via the National Weather Service:
— NWS Bay Area (@NWSBayArea) January 9, 2018
- World Resources Institute holds an event on Stories to Watch 2018.
- The House Natural Resources Committee holds a markup on various legislation.
- The Senate Environment and Public Works Committee holds a hearing on “America’s Water Infrastructure Needs and Challenges.”
- The EPA holds an informational webinar on how to apply for an EPA P3 Grant on Thursday.
- The Energy Department’s Office of Energy Efficiency and Renewable Energy holds a “Better Buildings peer exchange call to discuss what’s on the horizon for residential energy efficiency in 2018” on Thursday.
- The Center for Strategic and International Studies hosts a discussion with former Energy Secretary Ernest Moniz on Thursday.
- Politico holds an event on “Driverless Cars and the Future of Mobility” on Jan. 16.
- The Bipartisan Policy Center hosts FERC commissioners Neil Chatterjee and Cheryl LaFleur for a discussion on the proposed Grid Resiliency Pricing Rule on Jan. 16.
- The United States Energy Association holds the 14th Annual State of the Energy Industry Forum.
- The Women’s Council on Energy and the Environment holds its 6th annual Lunch & Learn event to decide what topics to cover in 2018 on Jan. 23.
- The Center for Strategic and International Studies holds an event on Canada’s energy future on Jan. 23.
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