Energy Brief: Powerful Winter Storm Tests East Coast Energy Infrastructure

Government Brief

  • President Donald Trump announced his intent to nominate Holly Greaves, who is Environmental Protection Agency Administrator Scott Pruitt’s senior budget aide, to be the EPA’s chief financial officer. Trump also tapped Anne White, a nuclear engineer, to lead the Energy Department’s Office of Environmental Management. (E&E News)
  • New York Gov. Andrew Cuomo (D) said he’s calling for 800 megawatts of offshore wind contracts by next year. He also directed the New York Green Bank to invest $200 million toward meeting an energy storage target of 1,500 MW by 2025, and he wants the New York State Common Retirement Fund, which has about $200 billion, to divest from fossil fuel-related activities. (RTO Insider)
  • Utah-based Lighthouse Resources sued Washington state in federal court, alleging that state officials violated U.S. laws by delaying and denying permits for the company’s proposed coal-export terminal. The Millennium Bulk Terminals-Longview project, which would move coal from Western states to Asian markets, has faced a series of setbacks, such as being denied a key water permit from Washington state’s Ecology Department. (The Associated Press)

Business Brief

  • The winter storm moving up the U.S. East Coast is testing energy infrastructure by threatening power outages, refinery shutdowns and spikes in heating prices. Five refineries along the East Coast are dealing with challenges such as frozen pipes, while Phillips 66 reportedly shut a crude and coking unit at its refinery in Wood River, Ill., as a result of the weather. (Reuters)
  • Tesla Inc. built fewer than 2,500 Model 3 electric sedans in the fourth quarter of 2017, falling short on deliveries for the new and affordable vehicle — priced at $35,000 — after CEO Elon Musk predicted in July that Tesla would be able to produce 20,000 units a month by December. Tesla said “major progress addressing Model 3 production bottlenecks,” and it outpaced third quarter production, when 260 Model 3s rolled off its assembly line. (The New York Times)
  • The Department of Energy invited the Appalachia Development Group to submit a second phase application for a $1.9 billion federal loan guarantee for a regional natural gas storage hub. The Appalachia Storage & Trading Hub — a proposed underground storage facility for natural gas liquids and intermediates– is a focal point of West Virginia’s economic development efforts. (West Virginia Metro News)

Chart Review

Events Calendar (All Times Local)

The International Conference on Sustainability, Energy & the Environment 4:30 p.m.
The International Conference on Sustainability, Energy & the Environment 8:30 a.m.

2017 Brands in Review

Last year, Morning Consult conducted nearly 1 million survey interviews on nearly 1,000 brands. Get a never-before-seen look at how public perception changed for the world’s biggest brands.


Trump announces EPA, DOE picks
Kevin Bogardus and Hannah Northey, E&E News

The president announced his intent to nominate Holly Greaves as EPA chief financial officer. He also tapped a nuclear engineer, Anne White, to oversee the Energy Department’s Office of Environmental Management.

California Bill Seeks Ban on Fossil-Fueled Vehicles by 2040
Ryan Beene, Bloomberg

California would ban the sale of new cars and trucks powered by fossil fuels in 2040 under legislation introduced Wednesday in the state legislature. If the measure becomes law, by January 1, 2040, all new passenger vehicles sold in California would have to be so-called zero emission vehicles such as battery-electric or hydrogen fuel cell cars.

Arctic Blast Heating Up Battle Between Energy Lobbying Groups
Tim Loh, Bloomberg

Just about the only thing heating up in the eastern half of the U.S. right now is the debate over what power source should be trusted to keep homes warm and the lights on. There are 99 nuclear generating units in the U.S. and every one of them is currently operating — “an incredible but unsurprising testament to nuclear’s reliability,” said John Keeley, spokesman for the Nuclear Energy Institute.

Geopolitical Tensions Drive Oil to Three-Year High
Sarah McFarlane, The Wall Street Journal

Oil prices hit a three-year high on Thursday, with ongoing protests in major producer Iran adding a geopolitical risk premium to the market. West Texas Intermediate futures on the New York Mercantile Exchange were trading up 0.2% at $61.77 a barrel.

Oil and Natural Gas

Gas storage hub project clears first hurdle for big loan
Brad McElhinny, West Virginia Metro News

Supporters of a regional storage hub for natural gas are excited the proposed project has cleared a significant hurdle for a possible $1.9 billion federal loan guarantee. The federal Department of Energy invited Appalachia Development Group to submit a second phase application for the loan guarantee.

San Antonio’s Andeavor buys Permian Basin crude oil infrastructure
Rye Druzin, San Antonio Express-News

San Antonio refiner Andeavor announced Wednesday it will buy crude oil infrastructure in West Texas and New Mexico for an undisclosed amount of money. The refiner is buying the Rangeland Energy II, LLC system, which includes storage tanks, a frac sand terminal, and a 67 percent stake in the 110-mile RIO Pipeline, from Sugar Land-based midstream developer Rangeland Energy.

Sen. Bill Nelson threatens to block Trump from dismantling offshore drilling rules
Josh Siegel, Washington Examiner

Sen. Bill Nelson said Wednesday he intends to introduce a resolution to stop the Trump administration from dismantling safety rules created after the Deepwater Horizon offshore oil rig disaster in the Gulf of Mexico. The Florida Democrat said he plans to use the Congressional Review Act, which allows for a streamlined process for Congress to overturn federal regulations.

Sens. Warren, Markey query feds about Tennessee Gas pipeline wastewater spill in Agawam
Mary Serreze,

U.S. Sens. Edward J. Markey and Elizabeth Warren are seeking answers from top federal regulators after a Tennessee Gas Pipeline contractor improperly spilled 16,500 gallons of tainted wastewater near the company’s Agawam compressor station in November. Warren and Markey on Jan. 2 wrote to Environmental Protection Agency administrator Scott Pruitt and Federal Energy Regulatory Commission chairman Kevin McIntyre with a list of questions about the incident and its aftermath.

Industrial Giant Schneider Electric Brings Oil Pumps into Digital Era
Sara Castellanos, The Wall Street Journal

Global industrial company Schneider Electric SE is connecting oil pumps to the internet, with the intention of gathering data that can be used for advanced services such as predictive maintenance. The company is using edge computing to predict costly mechanical problems with equipment that extracts oil in remote locations, where wireless connectivity isn’t widely available, said Cyril Perducat, executive vice president of digital services and Internet of Things at Schneider Electric.

America could become oil king of the world in 2018
Matt Egan, CNN

The United States is poised to ramp up crude oil production by 10% in 2018 to about 11 million barrels per day, according to research firm Rystad Energy. Surging shale oil output should allow the United States to dethrone Russia and Saudi Arabia as the planet’s leading crude oil producer, Rystad predicted in a recent report.

Russia’s gas exports to Europe rise to record high
Henry Foy, Financial Times

Russia’s gas exports to Europe rose 8.1 per cent last year to a record level of 193.9bn cubic metres (bcm), despite rising competition and concerns about the country’s dominance of supply. State-run Gazprom, the world’s largest gas producer, has a monopoly over Russia’s network of pipelines to Europe and supplies close to 40 per cent of Europe’s gas.

Utilities and Infrastructure

Winter storm challenges U.S. East Coast energy complex
Jarrett Renshaw, Reuters

The U.S. energy industry was facing a massive test of its infrastructure as an intense winter storm roared up the Atlantic Coast, threatening power outages, refinery shutdowns and spikes in heating prices. The storm swept the U.S. Southeast and headed toward New England on Wednesday, adding snow, freezing rain and strong winds to a record-shattering cold already affecting much of the eastern United States.

Deep Freeze in U.S. Creates Heating Squeeze for Homeowners and Utilities
Tiffany Hsu, The New York Times

Homeowners, businesses and utilities across much of the United States were keeping a close watch on fuel supplies Wednesday as a record-setting cold snap caused demand for heating oil and natural gas to soar. Many utilities turned to coal and oil to generate electricity as the price of natural gas, their usual fuel of choice, surged.


Cuomo Pushes Clean Energy in Annual Address
Michael Kuser, RTO Insider

New York Gov. Andrew Cuomo on Wednesday made clear that clean energy and the jobs it can create will continue to be a key part of his vision for the state’s future. In his annual State of the State address, Cuomo called for the approximately $200 billion New York State Common Retirement Fund to “end any investment in fossil fuel-related activities,” saying “the future of the environment, the future of the economy and the future of our children is all in clean technology, and we should put our money where our mouth is.”

Tesla Reports New Setback for Model 3, With Output Lagging
Neal E. Boudette, The New York Times

Tesla’s first mass-market offering keeps encountering roadblocks. The electric-car maker said on Wednesday that production of the new vehicle, the Model 3, in the final quarter of 2017 was far behind what its chief executive, Elon Musk, forecast when it went into production six months ago.

New ITC report finds China ‘took advantage’ of US commitment to renewables
Robert Walton, Utility Dive

A supplemental report prepared by the U.S. International Trade Commission at the behest of the U.S. Office of the Trade Repesentative concludes China “took advantage” of the United States government’s commitment to renewable energy when it raised production of solar photovoltaic cells being sold abroad. The report focused on any “unforeseen developments” that led to the case.


Coal Company Sues Washington State Over Coal-Export Terminal
The Associated Press

Developers of a massive coal-export terminal proposed on the Columbia River have sued Washington state over the project. Utah-based Lighthouse Resources sued in federal court in Tacoma Wednesday, alleging that state officials violated federal laws in delaying and denying permits for its Millennium Bulk Terminals-Longview project.

Interior’s Misstatement On Montana Coal Mine Leads To Small ‘Market Sensation’
Eric Whitney, MTPR

We’re getting perspective now on last week’s news that the U.S. Interior Department said it had approved a major coal mine expansion in Montana. It caused the stock of the mining company involved to temporarily spike.


Fermi 2 Nuclear Plant Finds Minor Problem With Fuel Assembly
The Associated Press

An official says a minor defect in a fuel assembly has been found in the reactor at Fermi 2 nuclear power plant in southeastern Michigan. DTE Energy Co. spokesman John Austerberry tells the Monroe News that the plant operated at reduced power from Friday night until Monday evening so the potential defect could be located.

NYISO Seeks FERC Denial on Indian Point Review Deadline
Michael Kuser, RTO Insider

NYISO on Tuesday asked FERC to deny Entergy’s request that the commission clarify the deadline for the ISO to complete a final market power review for the deactivation of the Indian Point nuclear plant. At issue is the commission’s acceptance in November of NYISO’s revisions to its reliability-must-run program, adding a 365-day notice period for a generator to notify the ISO that it plans to retire.

The committee to save nuclear towns is not in session
Saqib Rahim, E&E News

The Vermont Yankee Nuclear Power Station, 6 miles south of Main Street, went offline in December 2014. What happens next in southern Vermont will be an important case study for the dozens of nuclear host communities that could be in its shoes soon.


A bunch of House Republicans accept warming. Is it real?
Zack Colman, E&E News

Environmental groups are at odds about how to treat a growing number of Republicans who are speaking out on climate change. They’re caught between wanting to encourage GOP movement on the issue and the sense that Democrats are reliable votes willing to go further, faster, on climate change.

Why So Cold? Climate Change May Be Part of the Answer
Henry Fountain, The New York Times

As bitter cold continues to grip much of North America and helps spawn the fierce storm along the East Coast, the question arises: What’s the influence of climate change? Some scientists studying the connection between climate change and cold spells, which occur when cold Arctic air dips south, say that they may be related.

Opinions, Editorials and Perspectives

Dominion Aims to Clean Up a Nuclear Disaster
Liam Denning, Bloomberg

While some brag about the size of their button, Dominion Energy just went ahead and pushed it. The Virginia-based utility is getting the new year started off right with a $14.6 billion deal, including assumed debt, for Scana Corp.

Dominion Pounces on Scana’s Nuclear Woes
Spencer Jakab, The Wall Street Journal

Dominion Energy ’s proposed $7.7 billion bid for Scana Corp. is nothing short of masterful—a bold move to take advantage of its merger target’s and local politicians’ misfortune. At first glance, the all-stock deal comes with some unusually generous sweeteners meant to appeal not only to shareholders but, as is often the case in utility deals, to ratepayers as well.

Too cozy with regulators
Editorial board, The Post and Courier

On Sunday, The Post and Courier reported that members of the state Public Service Commission, which regulates utilities, received at least $140,000 over the past five years to pay for conference costs, speaking fees and related expenses. Most of that money went unreported on ethics filings, though at least some PSC members are now updating their ethics forms to reflect that conference expenses were covered by utilities and industry groups.

Research Reports

The Trump Administration Is Selling Your Public Lands on the Internet
Nicole Gentile, Center for American Progress

President Trump left little ambiguity about the “great and wonderful use” to which Bears Ears and Grand Staircase-Escalante national monuments will be converted: The proclamations specify that, at 9:00 a.m. on February 2, 2018, the lands will be immediately available for mining and drilling. Without paying a dime to the federal government, speculators will be able to stake a claim to mine for uranium, potash, and any other mineral that they believe can be extracted from the monuments.

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