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Energy Brief: Environmental Budget Cuts Could Face Bipartisan Opposition

Washington Brief

  • The White House’s suggestions for cutting environmental programs could face bipartisan pushback, as both Democratic and Republican congressional districts received billions of dollars in combined contracts for environmental projects. (Bloomberg News)
  • White House Press Secretary Sean Spicer said the administration is “not considering a carbon tax,” pushing back on a longshot attempt by officials with former Republican administrations to get President Donald Trump on board with a conservative-oriented policy to address climate change. (Axios)
  • A Government Accountability Office report detailed problems with communication within the Bureau of Safety and Environmental Enforcement, which Rep. Blake Fahrenthold (R-Texas) described as “distrust” between BSEE headquarters and its regional employees. (The Hill)

Business Brief

  • Last year saw a 48 percent drop in plans for new coal-fired power plans worldwide, and a 62 percent drop in the start of new construction, according to a report by environmental groups Greenpeace, the Sierra Club and CoalSwarm. (BBC News)
  • Most of the world’s cars will be powered by gasoline for the next two decades, continuing to drive demand for oil regardless of a surge in electric vehicles, according to Facts Global Energy. (Financial Times)
  • British electricity supplier Good Energy reached a deal to buy 12 percent of the electricity generated from Dong Energy’s offshore wind farm in Britain for one year. (Reuters)

Chart Review

Events Calendar (All Times Local)

Wednesday
American Coalition for Ethanol D.C. fly-in 8:30 a.m.
House Energy & Commerce subcommittee hearing on Ozone Standards Implementation Act 10 a.m.
House Natural Resources subcommittees hearing on Puerto Rico Electric Power Authority 10 a.m.
Environmental Law Institute climate policy outlook 12:30 p.m.
Thursday
International Conference on Climate Change 7:30 a.m.
American Coalition for Ethanol D.C. fly-in 8:30 a.m.
Bipartisan Energy Center on the North American energy trade 2 p.m.
Chevron CEO John S. Watson speaks to Economic Club of D.C. 6 p.m.
Georgetown University Library discussion on energy policy 6 p.m.
Friday
International Conference on Climate Change 7:30 a.m.

 

A Message from American Fuel & Petrochemical Manufacturers:

More than half of the components in the smart phones, tablets and laptops that connect us start with petrochemicals. Beyond making the fuels that power the world, American Fuel & Petrochemical Manufacturers provide the building-blocks for high-tech innovations that make our modern lifestyles possible. Learn about how American Fuel & Petrochemical Manufacturers are making our lives easier, healthier, safer and more productive at afpm.org. At AFPM, we make progress.

General

Trump’s Environmental Spending Cuts Could Cost Republican Districts Billions
Christopher Flavelle et al., Bloomberg News

President Donald Trump’s cuts to environmental programs may face resistance from members of his own party due to an Obama administration practice that spread billions of dollars in contracts to Republican as well as Democratic congressional districts. A Bloomberg analysis of federal contract data shows that spending related to the environment reached 423 congressional districts in fiscal year 2016 and totaled $5.9 billion.

Trump Lays Plans to Reverse Obama’s Climate Change Legacy
Coral Davenport, The New York Times

President Trump is poised in the coming days to announce his plans to dismantle the centerpiece of President Barack Obama’s climate change legacy, while also gutting several smaller but significant policies aimed at curbing global warming. The moves are intended to send an unmistakable signal to the nation and the world that Mr. Trump intends to follow through on his campaign vows to rip apart every element of what the president has called Mr. Obama’s “stupid” policies to address climate change.

Companies promise Trump a fight over his plan to scrap energy-efficiency program
John Siciliano, Washington Examiner

Proponents of the federal Energy Star program for energy efficient appliances are promising President Trump a fight if he maintains his deep cuts to the program in his final budget in May. “This is a destructive proposal that walks away from decades of bipartisan support for energy efficiency going back to the Reagan administration and beyond,” said Kateri Callahan, the president of the Alliance to Save Energy, a group that advocates for policies to boost efficiency.

Greens launch ad campaign against EPA cuts
Devin Henry, The Hill

A environmental group has launched a six-figure ad campaign against proposed budget cuts to the Environmental Protection Agency (EPA). An ad from the Environmental Defense Fund (EDF) says cutting the agency’s budget will lead to “more asthma attacks, more lead in drinking water, more health problems, more pollution.”

Senate votes to lift limits on hunting Alaska grizzlies and wolves on federal land
Juliet Eilperin, The Washington Post

The Senate voted Tuesday to abolish a rule restricting specific hunting practices on national wildlife refuges in Alaska — including trapping, baiting and aerial shooting — on the grounds that state officials should be able to set the terms for wildlife conservation on public land within their own borders. The 52-to-47 vote, which was almost entirely along party lines, represented the latest instance of Republicans using a powerful legislative tool — the Congressional Review Act — to eliminate regulations that Barack Obama’s administration finalized before he left office in January.

Stocks Retreat, Bonds Gain as Trump Trade Wobbles
Samuel Potter, Bloomberg News

Equities dropped across the globe as investors began to question the U.S. president’s ability to enact his pro-growth policies, casting doubt on the so-called reflation trade. Safe-haven assets advanced.

Oil and Natural Gas

Watchdog piles on criticism of offshore drilling regulator
Timothy Cama, The Hill

A watchdog is alleging numerous problems at the federal government’s offshore drilling regulator, including in its inspection and environmental stewardship programs. A new report from the Government Accountability Office (GAO) is the latest on the Interior Department’s Bureau of Safety and Environmental Enforcement (BSEE) from Congress’s watchdog, which previously identified problems ranging from revenue collection to employee retention and organizational restructuring.

Big Oil’s Plan to Buy Into the Shale Boom
Javier Blas, Bloomberg News

Exxon Mobil Corp., Royal Dutch Shell Plc and Chevron Corp., are jumping into American shale with gusto, planning to spend a combined $10 billion this year, up from next to nothing only a few years ago. The giants are gaining a foothold in West Texas with such projects as Bongo 76-43, a well which is being drilled 10,000 feet beneath the table-flat, sage-scented desert, and which then extends horizontally for a mile, blasting through rock to capture light crude from the sprawling Permian Basin.

Electric cars pose little threat to oil demand
Cuneyt Kazokoglu, Financial Times

The popular claim that a surge in electric cars will hasten the arrival of peak oil demand is undermined by the data. The majority of the world’s cars will remain powered by petrol, also commonly known as gasoline, for at least the next two decades and this will drive oil demand, according to data from Facts Global Energy.

Saudi Arabia’s Oil Supremacy Falters
Sarah McFarlane et al., The Wall Street Journal

Saudi Arabia is losing its grip on big oil markets it once dominated amid a deep production cut that has reshaped global petroleum trade routes and benefited rivals like Iran, Russia and the U.S.

Saudi Aramco to launch first public bond sale
Simeon Kerr and Anjli Raval, Financial Times

Saudi Aramco is set to launch its first public bond sale, of around $2bn, as soon as this month, as it begins to tap local currency debt markets as part of a $10bn fundraising programme. People briefed on the company’s plans say the world’s largest energy company is expected to receive approval from Saudi Arabia’s capital markets authority this week to sell Islamic bonds, known as sukuk.

Gas Natural to file €1bn complaint against Colombia
Tobias Buck and Andres Schipani, Financial Times

Gas Natural will on Wednesday file a €1bn legal complaint against Colombia with an international arbitration panel in response to the seizure of the Spanish utility’s power supply business by Bogotá. According to people briefed on the filing, the complaint will assert that the actions by the Colombian government in relation to Electricaribe amount to an expropriation.

Exxon’s South Texas petrochemical plant wins county support
Rye Druzin, San Antonio Express-News

The San Patricio County, Texas, Commissioners Court voted twice in favor of what would be the world’s largest ethane steam cracker — first approving a reinvestment zone for the land and then tax abatements. The project is a joint venture by Exxon Mobil and Saudi Arabia Basic Industries Corp., or SABIC, which want to bring the multibillion project to the Gulf Coast. The companies are also considering sites in Victoria and Louisiana.

Utilities and Infrastructure

Minnesota utility’s long-term plan calls for more renewables, less coal
Frank Jossi, Midwest Energy News

Clean energy groups won a victory last week after Minnesota regulators approved a long-range plan by Otter Tail Power Company that will double its investment in wind power and close a coal plant within the next five years. Otter Tail’s updated 15-year “integrated resource plan” included suggestions from the groups Fresh Energy (which publishes Midwest Energy News), Wind on the Wires, Minnesota Center For Environmental Advocacy and Sierra Club.

Sonnen Tries Different Virtual Power Plant Models in Germany, Australia and America
Mike Stone, Greentech Media

Buy a battery to store solar and never pay for electricity again. That’s the bold proposition of sonnenFlat, the latest twist in an evolving virtual power plant model that developers hope will make home storage pay. Sonnen believes the cost of providing distributed power in Australia should be offset by the income generated by ancillary services the company sells to the grid operator, leveraging the combined storage capacity of its customers’ battery units.

Renewables

Britain’s Good Energy to buy offshore wind power from Dong
Karolin Schaps, Reuters

British green energy supplier Good Energy (GOODG.L), one of the small players snapping up market share from big providers, said it had signed a one-year deal to buy electricity from a Dong Energy (DENERG.CO) wind farm off the Yorkshire coast. Good Energy, which also announced a near 40 percent jump in core profit for last year, said it will buy 12 percent of the electricity produced by Dong Energy’s 210-megawatt (MW) Westermost Rough wind farm, with a view to expanding the deal in terms of length and volume.

Wind energy company renews quest for approval
The Associated Press

A renewable energy company again faced opposition from landowners Monday as it tried for the second time to win one of the final pieces of regulatory approval needed to carry wind power east from the nation’s heartland over one of the country’s longest transmission lines. Missouri utility regulators began hearing testimony on a request from Clean Line Energy to build a high-voltage transmission line from western Kansas across Missouri and Illinois to an Indiana power grid that connects with Eastern states.

Groups Urge State to Reconsider New Solar Rules
Fred Bever, Maine Public

A broad coalition of solar power businesses, environmental advocates and industrial energy users want state regulators to reconsider new rules for solar power adopted earlier this year. But the move may just be a prelude to litigation — or legislative action.

Dominion Resources to build two S.C. solar-generating facilities
Richmond Times-Dispatch

Dominion Resources Inc. announced Monday that it will build two solar-generating facilities in South Carolina that will be operated under long-term power-purchase agreements with South Carolina Electric and Gas. Both projects were purchased from developer Adger Solar in November.

Coal

Plans for coal-fired power plants drop by almost half in 2016
Matt McGrath, BBC News

Twenty-sixteen saw a “dramatic” decline in the number of coal-fired power stations in pre-construction globally. The authors of a new study say there was a 48% fall in planned coal units, with a 62% drop in construction starts.

Indonesia to fuel coal demand: New Hope boss
Matt Chambers, The Australian

New Hope Group managing ­director Shane Stephan says the outlook for thermal coal used in power stations should be ­bolstered in coming years as ­Indonesia, the world’s biggest exporter, considers domestic coal reservation. Mr Stephan said it would be “stupid” for Australia, which has squandered its cheap, secure ­energy advantage, not to ­investigate high-efficiency, low-emission coal plants to provide that nation with affordable, ­reliable power.

Nuclear

UK asked to pause Hinkley nuclear reactor development by UN over environmental concerns
Grant Smith, The Independent

A United Nations committee has asked the UK to suspend work on the Hinkley Point C nuclear power plant, pending assessment of the environmental impact. EDF, the French state-controlled utility firm, won approval to build an £18bn nuclear plant on England’s western coast in September.

Climate

Update: White House not considering carbon tax
Ben Geman, Axios

A few hours after White House press secretary Sean Spicer gave an ambiguous answer about whether the administration is considering a carbon tax, the White House took it off the table. Former Secretary of State and the Treasury James Baker and other backers had pushed the idea in a meeting with senior White House officials early last month.

The White House calls climate change research a ‘waste.’ Actually, it’s required by law
Chris Mooney, The Washington Post

The day that President Trump’s climate science-slashing budget landed last week, his government held a public meeting here to prepare the nation’s Southeast region for rising seas, wildfires, extreme downpours and other impacts of climate change. Despite White House budget director Mick Mulvaney’s assertion Friday that studying climate change is a “waste of your money,” federal scientists are required, by a 1990 law, to do just that — and are carrying on for now, even under the cloud of budgetary uncertainty created by the Trump administration.

UN climate agency: Extreme weather in ‘uncharted territory’
Devin Henry, The Hill

Extreme weather events triggered by a warming globe are pushing the Earth into “truly uncharted territory,” the United Nations’ weather agency said on Tuesday. The World Meteorological Organization (WMO) released its annual repot on extreme weather events on Tuesday, saying the prevalence of climate-related weather issues last year “made history” and has continued into 2017.

How Americans Think About Climate Change, in Six Maps
Nadja Popovich et al., The New York Times

Americans overwhelmingly believe that global warming is happening, and that carbon emissions should be scaled back. But fewer are sure that the changes will harm them personally.

Opinions, Editorials and Perspectives

Making Solar Big Enough to Matter
Jeffrey Ball and Dan Reicher, The New York Times

Solar energy has become big business. Over the past decade it has plummeted in cost, surged in volume, and, as booming industries do, benefited some investors and burned others.

A Message from American Fuel & Petrochemical Manufacturers:

By 2020, an estimated 18 billion devices will be wirelessly linked together by the “Internet of Things,” a world made possible by petrochemicals and powered by fuels provided by American Fuel & Petrochemical Manufacturers. Learn about how American Fuel & Petrochemical Manufacturers are making our lives easier, healthier, safer and more productive at afpm.org. At AFPM, we make progress.

Research Reports

WMO Statement on the State of the Global Climate in 2016
World Meteorological Organization

Warming continued in 2016, setting a new temperature record of approximately 1.1 °C above the pre-industrial period, and 0.06 °C above the previous highest value set in 2015.

How to Make Nuclear Innovative
Jessica Lovering et al., Breakthrough Institute

If the nuclear industry once stood at the forefront of energy innovation, it is today rapidly losing ground. Global nuclear generation has fallen 9% since its peak in 2006, with closures outpacing new builds in many developed economies, and fossil fuels still cheaper and faster to deploy across the developing world.