Energy Brief: Draft Budget Makes Deep Cuts to Renewable Energy Programs

Washington Brief

  • President Donald Trump’s draft budget for the Energy Department includes deep budget cuts of nearly 70 percent for renewables, as well as additional reductions in the energy efficiency, fossil fuel and nuclear power. (Axios)
  • Republican governors from Massachusetts and Vermont urged Energy Secretary Rick Perry to remain in the Paris climate agreement to encourage states to lower their own carbon emissions. (Reuters)
  • The Energy Department will publish its internal electric grid review, ordered by Perry in April, following accusations that the study was designed to undermine the wind energy industry. (E&E News)

Business Brief

  • The North Carolina Utilities Commission asked Duke Energy to account for the costs of its over-budget Lee nuclear plant. Duke Energy must present alternative options for getting two nuclear reactors which were promised from Westinghouse before it filed for bankruptcy. (The Associated Press)
  • Exxon Mobil will open its first gas station in Mexico later this year, and announced plans to invest $300 million over the next decade into the Mexican retail fuel market. (The Wall Street Journal)

Chart Review

Events Calendar (All Times Local)

Greentech Solar Summit 9:30 a.m.
Senate Energy and Natural Resources Committee hearing on nomination of deputy Interior secretary 10 a.m.
House Natural Resources subcommittee hearing on water rights bills 10 a.m.
House Transportation and Infrastructure subcommittee hearing on water quality 10 a.m.
Environmental Law Institute discussion on compensatory mitigation 12 p.m.
Book talk on “Hot, Hungry Planet” by Lisa Palmer 4 p.m.
Pruitt discusses “Returning to EPA Originalism” 5 p.m.
NCAC-USAEE event on horizontal wells 12 p.m.



Agency defends contentious grid study
Hannah Northey and Christa Marshall, E&E News

The Energy Department plans to make public a contentious internal study on the U.S. electrical grid that has riled up renewable groups and Democrats who have questioned its underlying intent.

Iowa senator slams energy chief for grid study undermining wind energy
Valerie Volcovici, Reuters

Iowa’s Republican senator on Wednesday raised concerns that U.S. Energy Secretary Rick Perry has commissioned a “hastily developed” study of the reliability of the electric grid that appears “geared to undermine” the wind energy industry. In a letter sent to Perry, Senator Chuck Grassley asked a series of questions about the 60-day study he commissioned. Grassley also said the results were pre-determined and would show that intermittent energy sources like wind make the grid unstable.

Overnight Energy: Senate panel advances regulatory reform bills
Timothy Cama and Devin Henry, The Hill

A Senate committee on Wednesday approved several regulatory reform bills, including those to give Congress more power over repealing regulations and requiring more “cost-effective” rules.

State will pursue revised rules for NPR-A with Interior Dept.
Tim Bradner, The Alaska Journal of Commerce

State officials will push new U.S. Interior Secretary Ryan Zinke for a revamp of Obama administration rules restricting oil and gas development in the National Petroleum Reserve-Alaska, state Natural Resources Commissioner Andy Mack said May 12.

Oil Stuck in Trump Slump as Risk Aversion Damps U.S. Supply Drop
Rakteem Katakey and Heesu Lee, Bloomberg News

Oil is getting ensnared in the turmoil surrounding Donald Trump even as U.S. crude production, which has undercut OPEC’s output curbs, declined for the first time in 13 weeks.

Oil and Natural Gas

Exxon Mobil to Enter Mexican Gas-Station Market
Anthony Harrup, The Wall Street Journal

Exxon Mobil Corp. plans to open its first Mexican service station in the second half of the year, joining the likes of BP PLC in the country’s newly opened motor-fuels market.

OPEC wild cards: Libya, Nigeria oil output stokes concern, but geopolitical risks still simmer
Tom DiChristopher, CNBC

Rising oil production in Libya and Nigeria is raising concerns about OPEC’s ability to boost crude prices, but conflicts in the two nations may still keep a lid on their output.

Australian oil well leaked into ocean for months – but spill kept secret
Michael Slezak, The Guardian

An offshore oil and gas well in Australia leaked oil continuously into the ocean for two months in 2016, releasing an estimated 10,500 litres. But the spill was never made public by the regulator and details about the well, its whereabouts and operator remain secret.

Penn Natural Gas rates jumping 10 percent
Jon O’Connell, The Times-Tribune

Natural gas heating bills will jump almost 10 percent next month, UGI Penn Natural Gas officials said Wednesday. An increase in purchased gas cost rates follows the price the utility pays to buy the gas, which has been increasing with some consistency since the end of February.

Meetings next week on Pomerado Road gas pipeline
Steve Dreyer, The San Diego Union-Tribune

Plans by San Diego Gas & Electric and the Southern California Gas Company to build a high-pressure natural gas pipeline along Pomerado Road will be the subject of public meetings Wednesday in Escondido and Thursday in Scripps Ranch.

Utilities and Infrastructure

Senators unveil infrastructure investment bill
Melanie Zanona, The Hill

A bipartisan group of senators is moving ahead with their own infrastructure spending bill as Congress awaits details from the White House about President Trump’s rebuilding proposal. Sens. Mark Warner (D-Va.) and Roy Blunt (R-Mo.) are spearheading the new legislative effort, which would leverage money from the private sector through a newly created investment bank to help upgrade U.S. roads, bridges and other public works.

Lawmakers, Administration Say Gas Tax on Table to Fund Infrastructure
Iulia Gheorghiu, Morning Consult

The Trump administration on Wednesday signaled it would prefer to rely on private funding or public-private partnerships for infrastructure projects, but also said a tax on gasoline is not off the table.


TXU, Luminant owner building Texas’ largest solar plant
Jeff Mosier, The Dallas Morning News

Dallas-based Vistra Energy has purchased what would be the state’s largest solar plant when it opens next year, the company announced Wednesday. The 180-megawatt Upton 2 project could provide electricity to 27,700 homes during hot weather or nearly double that when demand is average.

It’s smarter to invest in renewable energy in India than the US
Manu Balachandran, Quartz

India has zoomed past the US to take the second spot on a list of the world’s most attractive renewable energy markets. In their annual ranking of the world’s top 40 markets for investing into renewable energy, consultancy firm EY named China (pdf) the world’s most attractive renewables market for 2017, followed by India.

Campbell’s sees cost savings in Camden solar project
Michelle Caffrey, The Philadelphia Business Journal

The company’s chief sustainability officer said it’s expected to help the company lower energy costs and will meet at least 20 percent of its world headquarter’s electricity demand.


Cabinet approves new coal linkage policy
Sudarshan Varadhan, Reuters

India approved on Wednesday a new coal linkage policy to ensure all power projects get adequate supply through a bid process or power purchase agreements, to help debt-laden generators which have had to import coal despite adequate domestic stockpiles.

7 Things A New Report Says About The Mega Coal Mine Near The Great Barrier Reef
Rob Stott, BuzzFeed News

The proposed Adani mega coal mine in Queensland’s Galilee Basin is “completely at odds with protecting Australians, infrastructure, industry and ecosystems”, a new report by the Climate Council has found.


Duke Energy Told to Detail Costs, Prospects for Nuke Plant
Emery Dalesio, The Associated Press

North Carolina regulators want Duke Energy to account for what it has spent on a South Carolina nuclear power plant facing new doubts after the company that was supposed to supply the reactors filed for bankruptcy.

Indian cabinet approves plans to build 10 nuclear reactors
Sudarshan Varadhan, Reuters

India’s cabinet approved plans on Wednesday to build 10 nuclear reactors with a combined capacity of 7,000 megawatts (MW), more than the country’s entire current capacity, to try fast-track its domestic nuclear power program. The decision by Prime Minister Narendra Modi’s government marks the first strategic response to the near collapse of Westinghouse, the U.S. reactor maker that had been in talks to build six of its AP1000 reactors in India.


Two governors urge Perry to help keep U.S. in Paris climate pact
Emily Flitter, Reuters

Two Republican governors urged U.S. Energy Secretary Rick Perry on Wednesday to ensure the United States does not withdraw from a pact that requires countries around the world to lower greenhouse gas emissions in a bid to slow global warming.

Opinions, Editorials and Perspectives

Congress Should Help Protect EPA Voluntary Programs That Work
Taryn Holowka, Morning Consult

The new administration has put the Environmental Protection Agency in its crosshairs. The EPA, like any agency, should periodically be reexamined and its relationship with states and the private sector reassessed. But perhaps surprising to some, quite a few of its programs are almost universally lauded — on Capitol Hill and elsewhere — and shouldn’t be put under the knife, including those that are voluntary and support growing markets.

The Pump’s Already Primed So Hold the Tax Cuts
Noah Smith, Bloomberg Gadfly

Donald Trump has proposed cutting taxes as a way of “priming the pump” — that is, stimulating the economy. Paul Krugman retorts that now isn’t the time for stimulus; because the economy is doing fairly well right now, the pump is already flowing, so the government should wait until it runs dry to start priming.

The Pebble Mine Victory
The Editorial Board, The Wall Street Journal

EPA Administrator Scott Pruitt is wasting no time broadcasting that an era of lawless environmental regulation is over. One of the best signals so far is the agency’s agreement last week to let the Pebble Mine project in Alaska proceed through regular permitting and legal order.

7 ways Trump and Congress can improve infrastructure without spending a dime of taxpayer money
Ryan Bourne, Washington Examiner

“Infrastructure Week” sees the U.S. Chamber of Commerce, unions, the American Society of Civil Engineers, and many others telling Congress that “It’s Time To Build.” Yet a quick perusal of Infrastructure Week’s website suggests a more accurate description of their demand is, “It’s Time to Spend More Taxpayer Money.”

Are solar and wind killing coal, nuclear and grid reliability?
Michael Webber et al., The Flyer Group

U.S. Secretary of Energy Rick Perry in April requested a study to assess the effect of renewable energy policies on nuclear and coal-fired power plants. Some energy analysts responded with confusion, as the subject has been extensively studied by grid operators and the Department of Energy’s own national labs. Others were more critical, saying the intent of the review is to favor the use of nuclear and coal over renewable sources.

Research Reports

Offshore Oil and Gas Resources:
Information on Infrastructure Decommissioning and Federal Financial Risk
Frank Rusco, U.S. Government Accountability Office

When infrastructure associated with drilling (e.g., platforms) is no longer in use, the Department of the Interior requires oil and gas companies to decommission it so that it doesn’t pose a safety or environmental hazard. Because decommissioning can cost millions of dollars, Interior requires companies to prove that they can pay these costs. This testimony discusses oil and gas infrastructure in the Gulf, and how Interior oversees its decommissioning.

U.S. Department of the Interior’s Compliance With the Improper Payments Elimination and Recovery Act of 2010 in its FY 2016 “Agency Financial Report”
Office of Inspector General for U.S. Department of Interior

The Improper Payments Elimination and Recovery Act (IPERA) requires each Federal agency to periodically identify and review all programs and activities that may be susceptible to significant improper payments and include improper payment reporting in its annual financial statements. Inspectors General are required to determine whether their agency has complied with IPERA reporting requirements each fiscal year. In this inspection report, we found that the U.S. Department of the Interior (DOI) complied with the IPERA reporting requirements, but we identified flaws in DOI’s risk assessment process and conclusions for fiscal year 2016.