Energy Brief: 15 States Sue EPA Over Delayed Smog Rule Enforcement

Government Brief

  • Fifteen states sued Environmental Protection Agency Administrator Scott Pruitt for his delay of the Obama-era smog rule, an ambitious pollution standard that the manufacturing and fossil fuel industries said is nearly impossible to meet. (Washington Examiner)
  • The EPA’s Office of Water director for science and technology ended her 30-year career by resigning in protest of the Trump administration’s efforts to deregulate pollution safeguards. (The Hill)
  • The U.S. Chamber of Commerce and the National Association of Manufacturers met with Trump administration officials to outline industry plans for changing the power grid emissions regulations under the Obama administration’s Clean Power Plan, as opposed to completely rescinding the law. (E&E News)

Business Brief

  • The European Union cut research financing for Volkswagen after the company had used its low-cost loan last year to trick emissions sensors. Research and development investments are crucial in the automotive industry in the face of greater competition from lower emission vehicles. (The New York Times)
  • DTE Energy Co. filed plans with the Michigan Public Service Commission for a new natural gas plant to power 850,000 homes starting 2022. The energy from this new plant will be created with lower emissions and would offset the three coal-fired power stations that DTE plans to retire. (Detroit Free Press)
  • Montana received $4.6 million in federal funding to retrain 1,700 coal industry workers ahead of the partial closing of the Colstrip, the coal-burning power plant. (The Associated Press)

Chart Review

Events Calendar (All Times Local)

Energy Department’s SIMB annual meeting and exhibition 8 a.m.
Senate Energy and Natural Resources subcommittee hearing on water security and infrastructure management 10 a.m.
Senate Environment and Public Works hearing on FBI HQ consolidation 10 a.m.
Green America Green Business Roundtable 11:30 a.m.
DOI presentation on oil spill response advances since Exxon Valdez 1:15 p.m.
CRES’s panel on the future of the solar industry, free trade 2:30 p.m.
Atlantic Council’s Cyber Statecraft Initiative event 4 p.m.
Energy Department’s SIMB annual meeting and exhibition 8 a.m.
2017 Climate Justice Youth Summit 9 a.m.
No events

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Industry to EPA: We want rule ‘fixed, not just gone’
Zack Colman, E&E News

Industry has delivered a clear message to the Trump administration during a series of recent closed-door meetings: Don’t completely gut the Obama-era Clean Power Plan. To be sure, leading industry associations are pushing White House and U.S. EPA officials to drastically roll back the landmark climate change rule.

European Bank Cuts Funds to VW Because of Emissions Fraud
Jack Ewing, The New York Times

Volkswagen suffered another blow to its reputation on Tuesday after it was barred from receiving European Union research financing over allegations it misused a previous loan to cheat on emissions. The decision by the publicly owned European Investment Bank at least temporarily deprives Volkswagen of low-cost financing it badly needs for research and development during a period of technological upheaval in the automobile business.

Top EPA official resigns over direction of agency under Trump
Jacqueline Thomsen, The Hill

A top Environmental Protection Agency official resigned Tuesday in protest of the direction the EPA has taken under President Trump. Elizabeth “Betsy” Southerland ended her 30-year run at the agency with a scathing exit letter in which she claimed that “the environmental field is suffering from the temporary triumph of myth over truth.”

Bearish cocktail knocks oil prices off recent highs
Amanda Cooper, Reuters

Oil retreated from this week’s eight-week highs above $52 a barrel on Wednesday, following a bearish combination of rising U.S. inventories, an outage at a major European refinery and increasing OPEC production. Brent crude futures were down 11 cents at $51.67 a barrel by 0856 GMT, having touched a session low of $51.18. The price hit $52.93 on Monday, its highest since late May.

Oil and Natural Gas

Venezuelan oil supply to Phillips 66 falls amid quality issues
Marianna Parraga and Erwin Seba, Reuters

Venezuela’s supply of heavy crude to U.S. independent refiner Phillips 66 has dropped by more than two-thirds this year in part due to quality problems, and the company has cancelled at least one cargo in recent months, according to sources from state-run oil company PDVSA.

Oil Companies at Last See Path to Profits After Painful Spell
Stanley Reed, The New York Times

When oil prices fell, the industry scrambled to adjust. But then companies realized they had to go further, starting a far-reaching reworking of their businesses to embrace new technologies and construction methods to stretch each dollar just a little more.

NAFTA Talks Offer Chance to Integrate Energy Policies
Jessie Jiang, Morning Consult

U.S. analysts and industry groups hope the upcoming talks to renegotiate the North American Free Trade Agreement will lead to more alignment between the energy policies of Canada, Mexico and the United States, particularly on trade and renewables. One of the key issues concerns Mexico’s energy reforms. In 2013 and 2014, the country passed broad reforms that allowed transnational corporations to explore oil and gas in Mexico, putting an end to the government’s decades-long energy monopoly.

OPEC’s ‘Catch-22’: How to Unwind Its Deal to Cut Oil Output
Georgi Kantchev et al., The Wall Street Journal

OPEC and other big oil producers are facing a new high-wire act: how to keep the oil market calm if they decide to lift their output curbs and ramp production back up. Investors worry the coalition of OPEC and other big producers like Russia—an alliance that accounts for 55% of world-wide oil output—could simply return to pumping full tilt when the deal expires, potentially sinking prices.

Utilities and Infrastructure

DTE Energy plans advanced $1-billion natural-gas power plant in St. Clair County
Bill Laitner, Detroit Free Press

DTE Energy says it has asked state regulators for permission to build “a state of the art” natural gas power plant at a site in St. Clair County where the utility now operates two outmoded plants burning coal. The utility must get approval from state regulators before it can start building the plant — and before it can start adding the estimated $1-billion cost as a surcharge to customers’ bills.

Utilities companies won’t let you sell your own solar power. Why not?
Kate Aronoff, The Guardian

The electric utility sector is broken – but the transformation we need will be virtually impossible so long as a handful of wealthy elites are calling the shots. From their commitment to toxic fuels to their corrosive influence on our democracy to their attempts to price-gouge ratepayers, it’s long past time to bring the reign of privately-owned electric utilities to an end.


BP in talks with electric carmakers on service station chargers
Karolin Schaps and Ron Bousso, Reuters

BP is in talks with electric vehicle makers on partnering to offer battery re-charging docks at its global network of fuel service stations as it seeks to benefit from the move away from diesel and petrol cars, Chief Executive Bob Dudley told Reuters on Tuesday. The expected rapid growth in the use of electric vehicles in the coming decades is threatening oil companies’ business model as demand for some road fuels could plateau as early as the late 2020s, according to some oil company estimates.

Planned Wind Energy Projects Increases 40 Percent
Madelyn Beck, Wyoming Public Media

Wind energy projects are being built all over the U.S. and a new report shows just how fast they’re cropping up. The American Wind Energy Association found that, since last year, the amount of wind energy under construction or nearly under construction increased 40 percent. That increase is enough to power more than 1.6 million homes on average.

European oil majors seek to harness U.S. offshore wind
Karolin Schaps and Susanna Twidale, Reuters

Some European oil majors have made inroads into the emerging U.S. offshore wind energy market, aiming to leverage their experience of deepwater development and the crowded offshore wind arena at home. Late entrants to the offshore wind game in Europe, which began with a project off Denmark 25 years ago and is now approaching maturity, they are looking across the Atlantic at what they view as a huge and potentially lucrative new market.


US gives Montana $4.6 million for retraining coal workers
Bobby Caina Calvan, Associated Press

The U.S. government awarded $4.6 million in aid on Tuesday to retrain hundreds of Montana coal workers, many of whom will soon be out of jobs because of a partial closure of the coal-fired Colstrip power plant. The money was allocated after President Donald Trump declared earlier this year that the “war on coal” was over and signed an executive order rolling back Obama-era regulations.

Rio Tinto Can’t Just Mine the Current Rich Vein Forever
Nathaniel Taplin, The Wall Street Journal

For mining investors traumatized by years of overinvestment during the commodities boom, cash is king—and Rio Tinto suddenly has plenty of it. Rio also announced a record interim dividend and an expansion of its share buyback program by $1 billion, for a total shareholder payout of $3 billion, or 75% of what it calls its underlying earnings. Rio’s strong performance is, of course, partly good luck.

ACLU files legal brief supporting John Oliver in suit filed by Murray Energy
Josh Siegel, Washington Examiner

The ACLU filed a legal brief Tuesday in support of HBO host John Oliver, who is being sued by the CEO of America’s largest privately owned coal company. Robert Murray, CEO of Murray Energy Corp., sued Oliver for defamation in June after the comedian mocked the coal company on his show, “Last Week Tonight.”


The Fate of America’s Nuclear Future Rests on One Utility
Jim Polson, Bloomberg

With a multibillion-dollar nuclear project in South Carolina dead, the fate of America’s nuclear renaissance now rests on one utility: Southern Co. Scana Corp. dropped plans for two reactors Monday, leaving the two that Southern is building at the Vogtle plant in Georgia as the only ones under construction in the U.S. And even they are under threat: The utility had to take over management of the project from its bankrupt contractor Westinghouse Electric Co., and the plant is still years behind schedule and billions over budget.

Nuclear power industry takes a hit, but JEA hopes to be a small player
Nate Monroe, The Florida Times-Union

The abandonment Monday of a major nuclear-power expansion project in South Carolina was a setback for the industry — shuttering one of the only active construction projects in the United States — but JEA remains a bit player as it hopes to add nuclear to its fuel mix in the coming years. JEA has a 20-year purchase agreement in place with Southern Company, which is building two new nuclear units at Plant Vogtle in Waynesboro, Ga. — now the only active nuclear power construction project in the country.


Fifteen states sue EPA’s Scott Pruitt over smog rule delay
John Siciliano, Washington Examiner

Fifteen states on Tuesday sued Environmental Protection Agency Administrator Scott Pruitt for delaying the Obama administration’s strict new rules for cutting smog-producing ozone emissions. Pruitt delayed the regulations in June while the EPA reviewed the regulations for possible changes and repeal.

DHS to Waive Rules to Speed Rebuilding of San Diego Border Wall
Jim Carlton, The Wall Street Journal

The Trump administration said Tuesday it would waive certain federal regulations to expedite rebuilding of an existing border wall along this city’s boundary with Mexico, in a move that environmental groups said would further endanger sensitive wildlife areas.

Skeptical scientists are lukewarm on Trump
Robin Bravender, E&E News

Scientists who have been combating the prevailing views about climate change for years might find plenty to be giddy about with the new administration. President Trump hired vocal climate skeptics to help shape his administration; top government officials are publicly questioning the role humans play in global warming and whether regulations are worth the costs; and the boss of U.S. EPA is eager to crack open the scientific debate that many called settled.

Bees Are Bouncing Back From Colony Collapse Disorder
Alan Bjerga, Bloomberg

The number of U.S. honeybees, a critical component in the agriculture industry, rose in 2017 from a year earlier, and deaths of the insects attributed to a mysterious malady that’s affected hives in North America and Europe declined, according a U.S. Department of Agriculture honeybee health survey released Tuesday.

Opinions, Editorials and Perspectives

Nuclear power is vital to our national security
Lindsey Graham and Saxby Chambliss, Fox News

What is at stake here is not just the health of the power grid in the southeastern United States, or the 12,000 jobs at the U.S. projects, but a demonstration of our ability to strengthen national security and solidify the United States’ role as an energy technology exporter. However, we seem to be backing away, ceding the world market to Russia and China, for the technology we pioneered.

EPA won’t be able to do the ‘right thing’ under Trump, says latest protesting official
Joe Davidson, The Washington Post

Elizabeth “Betsy” Southerland loved her work at the Environmental Protection Agency. Then Donald Trump and Scott Pruitt came along. Now Southerland, who was director of science and technology in the agency’s Office of Water, said she is “heartbroken about the impact of the new administration on environmental protection in this country.”

Why I’m bullish on oil for next 6 to 12 months
Andy Lipow, CNBC

In spite of agreeing to production cuts last November, crude oil prices, as recently as last week, were back to where they were prior to OPEC’s ineffective “agreement.” There are plenty of things that I dislike about today’s oil markets but there are also plenty of things that make me like it in the next six to 12 months.

Research Reports

Globally, People Point to ISIS and Climate Change as Leading Security Threats
Jacob Poushter and Dorothy Manevich, Pew Research Center

People around the globe identify ISIS and climate change as the leading threats to national security, according to a new Pew Research Center survey. While the level and focus of concern varies by region and country, ISIS and climate change clearly emerge as the most frequently cited security risks across the 38 countries polled.