Energy Brief: EPA Issues New Chemical Testing Rules

Washington Brief

  • The EPA released rules ordered by Congress last year on testing for chemicals used in commercial products. (The Wall Street Journal)
  • President Donald Trump showed increased support for natural gas exports with a focus on oil-hungry Asian nations such as Japan and India, building off of the efforts of President Barack Obama. (The Financial Times)
  • The House passed legislation to speed the federal permitting process for water-storage projects. Democrats opposed the bill because they say it deregulates environmental rules. (The Hill)

Business Brief

  • The drop in oil prices returned to the lows that were observed before the supply cuts imposed by the Organization of Petroleum Exporting Countries and their allies. Agreements in negotiations to deepen the reductions do not seem likely. (Bloomberg Government)
  • Volvo Cars LLC announced the launch of Polestar, an electric vehicle brand, bringing competition to Tesla Inc. (The Drive)
  • Murray Energy Corp. sued HBO, Time Warner Inc. and John Oliver for its portrayal of the company and CEO, which included a comparison to the fictional Dr. Evil character, during a segment on the present support for out-of-work miners. (USA Today)

Chart Review

Events Calendar (All Times Local)

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EPA to Unveil New Chemical Testing Rules
Eli Stokols, The Wall Street Journal

The Environmental Protection Agency on Thursday will release new rules to clarify the agency’s process of testing the chemicals used in everyday products and other commerce, a matter of deep importance to manufacturers, consumers and environmental advocates. The new rules implement the Toxic Substances Control Act (TSCA), which requires the agency to identify toxic chemicals used in commerce.

House passes bill to speed permitting for dams, reservoirs
Devin Henry, The Hill

The House passed a bill on Thursday that supporters say will speed up permitting decisions for water-storage projects such as dams and reservoirs in drought-stricken areas of the United States. GOP supporters of the bill say it’s a necessary step toward alleviating droughts and overhauling the federal permitting process.

Yellowstone Grizzly Bear to Lose Endangered Species Protection
Jim Robbins, The New York Times

After 42 years on the endangered species list, the Yellowstone grizzly bear – whose numbers have grown more than 700 from fewer than 150 – will lose its protected status, the Interior Department announced on Thursday. The move has long been debated, despite the bear’s increasing population in areas where it had not been seen in decades.

Energy official: Rick Perry’s grid study is ‘not a conclusion,’ but ‘a beginning’
John Siciliano, Washington Examiner

Energy Secretary Rick Perry’s first major study on the electric grid that’s due out next week will be much more of a “beginning” to possible grid reforms, rather than a final report of administration policy, a senior Energy Department official told the nation’s grid watchdog Thursday.

Pearce asks Zinke to reduce monument by 88%
Michael Coleman, The Albuquerque Journal

A day after Interior Secretary Ryan Zinke said he might not alter the size of two of New Mexico’s newest monuments, Rep. Steve Pearce implored him to dramatically shrink the Organ Mountains-Desert Peaks National Monument in his southern district. At a Senate hearing Wednesday, Zinke, who is reviewing more than two dozen national monuments for possible reductions in size, said he was open to keeping New Mexico’s newest monuments unchanged.

Perry Seeks Private Sector Solutions for Energy Research
Iulia Gheorghiu, Morning Consult

Energy Secretary Rick Perry justified the administration’s proposed cuts to energy research in Congress this week by saying the shortfall could be made up by the private sector. Perry defended the strategy at three hearings for House and Senate committees, stating that federal funds would flow toward early stage research, while companies would pick up the slack by investing later.

Oil and Natural Gas

Trump looks to lift LNG exports in US trade shift
Barney Jopson et al., The Financial Times

Donald Trump is engineering a sharp shift in US energy policy by using natural gas exports as an instrument of trade policy, championing sales to China and other parts of Asia to create jobs and reduce US trade deficits. In a bid to unleash US energy, Mr. Trump is trying to promote more liquefied natural gas exports to Asia while extending Barack Obama’s efforts to use LNG as a geopolitical weapon in Europe aimed at Russia.

OPEC Has Few Escape Routes From Another Bear Market in Oil
Angelina Rascouet et al., Bloomberg News

Oil’s back in a bear market and investors remain unmoved by last month’s agreement to prolong supply cuts, leaving OPEC and its allies with few remaining tools to boost prices. As Saudi Arabia, Russia and their allies reduce output, supply that’s beyond their control keeps rising. Libya and Nigeria — members exempt from the curbs — and U.S. shale producers are resurgent, undermining efforts to tame a global glut. Prices are back below where they were when the Organization of Petroleum Exporting Countries first struck its historic deal last year.

OPEC agreement will collapse next year, predicts Macquarie’s oil research chief
Gemma Acton, CNBC

The OPEC-led production cut agreement extended last month until February 2018 is unlikely to survive beyond that, the head of European oil and gas research at Macquarie has warned. Noting that members of the oil cartel were a “disparate bunch”, Ian Reid told CNBC’s Street Signs on Thursday that the key question was whether they could extend this agreement once again into 2019.

NG Lobby Goes on Offensive vs Coal, Nukes
Rich Heidorn Jr., RTO Insider

A key natural gas trade group released a study Thursday that contends it is not fuel diversity but the presence of “reliability attributes” that policymakers should seek for the good of the grid. And how does natural gas-fired generation fare on that report card? Very well, thank you.

Oil Prices Edge Up as Big Producers Stick to Cuts
Georgi Kantchev and Jenny W. Hsu, The Wall Street Journal

Oil prices ticked higher on Friday, capping a tumultuous week for a market that continues to be plagued by a global glut. Brent crude, the global oil benchmark, traded 0.4% higher at $45.40 a barrel on London’s ICE Futures exchange. On the New York Mercantile Exchange, West Texas Intermediate futures were trading up 0.4% at $42.93 a barrel.

Utilities and Infrastructure

Utilities need to plan for a 100% renewable energy future, even if it never happens
Michael Coren, Quartz

Utilities are not like most businesses. They place 30-year wagers on the way we will generate and consume electricity to ensure there’s a reliable supply far into the future. Multibillion-dollar investments build long-lived things like transmission lines, coal boilers, and nuclear reactors. That worked well enough when technological change in the energy industry was measured over decades. Now it’s advancing in years (or quarters if you track solar cell prices). That’s giving utility executives heartburn.

Western Utilities Bought 3X Planned Wind, Study Says
Jason Fordney, RTO Insider

Western U.S. utilities procured three times more wind capacity in 2003-2014 than planned, showing there is a limited relationship between electricity resource planning and procurement, according to a new Department of Energy study. Expansion of nameplate wind capacity by 2015 was expected to be about 15% but was actually about 50%, likely coming from power purchase agreements, the analysis of 12 Western load-serving entities showed.


It’s Electric: Volvo Spins Off Polestar Into Performance EV Brand
Kyle Cheromcha, The Drive

No longer content to watch Tesla have all the fun, Volvo Cars has announced they’re officially spinning off high-performance tuning division Polestar into a standalone brand with a mandate to make fast-as-hell electric cars. This confirms the rumor we highlighted earlier this month, and now we’ve got our first glimpse of the newly-minted Polestar logo that will adorn these upcoming performance EV models.

Montana has the smallest renewable energy incentives in the region after regulator’s vote
Tom Lutey, The Billings Gazette

Solar energy’s prospects dimmed in Montana on Thursday as state regulators retooled incentives for renewable energy development. Montana’s Public Service Commission voted to dramatically cut the guaranteed rates and contracts offered to solar projects no larger than 3 megawatts — projects large enough to power 540 or fewer homes.


Murray Energy sues John Oliver, HBO over coal-industry story
Maria Puente, USA Today

John Oliver, HBO and Time Warner have been sued for defamation for allegedly executing a “maliciously planned attempt to assassinate the character and reputation” of an Ohio coal company and its boss during a long-form story about the industry on Last Week Tonight’s June 18 episode. The piece sought to determine what measures actually help out-of-work miners.

Black Appalachia
Katelyn Fossett, Politico

One photographer wants to show that the face of coal country might not be as white as you think. The conventional portrayal of people who live in Appalachian coal country, a part of the United States that has ballooned in the national consciousness after its support for Donald Trump in the 2016 election, has generally focused on a few key characteristics: Rural, mostly poor and mostly white. Lynch, Kentucky, might fit the bill for the first two—but its racial diversity stands in stark contrast to the popular perception of Appalachia.


End $14 billion SC nuke plant project, critics say
Sammy Fretwell, The State

Critics of SCE&G’s over-budget and behind-schedule nuclear expansion project are asking state regulators for help in stopping the company from spending more money on two atomic reactors now under construction in Fairfield County. With the future of the project already in doubt, Friends of the Earth and the S.C. Sierra Club said Thursday they are requesting that the state Public Service Commission hold a hearing on the wisdom of continuing the now $14 billion project.


Dems plan to inject climate into reauthorization debate
Sam Mintz, E&E News reporter

Democrats are gearing up for a fight on climate change as lawmakers advance the National Defense Authorization Act in both the House and Senate.

Franken, Perry clash over climate change
Graham Piro, The Hill

Sen. Al Franken (D-Minn.) pressed Energy Secretary Rick Perry on the science behind climate change in a testy exchange during a committee hearing Thursday. Perry was testifying concerning the Trump administration’s budget proposal for the Department of Energy when Franken questioned him about his previous statements on climate change.

Opinions, Editorials and Perspectives

Why it’s time to short oil
John Kilduff, CNBC

Oil prices have hit a very rough patch, once again, down just over 20 percent since January. This is the second downturn of the year; prices rallied last month, after OPEC and Russia made plans to come together and contemplate their soon-to-expire agreement to limit oil output.

Trump dings wind power in Iowa. Critics in media retort that subsidy recipients like their green-energy subsidies.
Timothy Carney, Washington Examiner

“I don’t want to just hope the wind blows to light up your house and your factory,” President Trump said while emphasizing the need for fossil-fuel-powered electricity generation “as the birds fall to the ground.” Trump was giving a campaign rally (Election Day is only three years, three months and three weeks away) in Iowa. This line struck Trump’s critics in the media as dumb.

Trump has returned hope to coal industry, miners
Tyler White, The Lexington Herald Leader

For the Kentucky Coal Association, the election of President Donald Trump gave us hope. Instead of vilifying coal and its miners like President Barack Obama did, the Trump administration recognizes that coal is a reliable and affordable source of energy. Coal powers our homes and businesses, and the low-energy costs it provides gives the commonwealth a competitive advantage when attracting new employers and jobs.

Research Reports

The Power of Innovation: Inventing the Future
Norman Augustine et al., The Bipartisan Policy Center

The federal government can take a number of specific steps to spur innovation in the energy sector, including the following eight recommendations. These actions are critical to maximizing the potential of the nation’s innovation capacity and realizing the economic, security, and environmental benefits advanced energy technologies can provide.

Exploring the relationship between planning and procurement in Western U.S. electric utilities
Juan Pablo Carvallo et al., Lawrence Berkeley National Laboratory

Integrated resource planning (IRP) is an important regulatory process used in many U.S. states to formulate and evaluate least-cost and risk-assessed portfolios to meet future load requirements for electric utilities. In principle, effective implementation of IRP seeks to assure regulators and the public that utility investment decisions, given uncertainty, are as cost-effective as possible. However, to date, there is no empirical assessment on the effectiveness of IRP implementation. In this analysis, we compare planning, procurement processes and actual decisions for a sample of twelve load serving entities (LSEs) across the Western U. S. from 2003-2014.

Diversity of Reliability Attributes: A Key Component of the Modern Grid
Ira Shavel et al., The Brattle Group

Throughout the latter half of the twentieth century, large coal, nuclear, and hydroelectric generators provided the bulk of the country’s electricity, while natural gas and oil generators operated only during peak demand hours. Variable energy resources, such as wind and solar photovoltaic (“PV”) generators, provided only a small portion of the nation’s electricity. Most generators could change output only very slowly, but because virtually all capacity was dispatchable and variations in load were both relatively small and highly predictable, the system operator could readily deal with changes in load.