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Energy Brief: Production Resuming After Nate Forced Shutdown of 93% of Crude Output in Gulf of Mexico


Government Brief

  • Energy Secretary Rick Perry took a charter plane on Sept. 28 to tour a coal mine near Hazleton, Pa., at the request of the White House, and then used the same aircraft to visit a Department of Energy facility being decommissioned in Piketon, Ohio, according to agency documents that showed it was the only time Perry has taken a charter flight for official business since becoming secretary in March. The trip cost taxpayers $11,000 and came a day before Tom Price resigned as head of the Department of Health and Human Services over his travel-related expenses. (The Hill)
  • The watchdog group Campaign Legal Center is asking the Justice Department’s Office of Special Counsel to open a Hatch Act investigation into Interior Secretary Ryan Zinke after reports that he participated in political fundraisers in the U.S. Virgin Islands while on an official trip. Donors to the Virgin Islands Republican Party were invited to have their photo taken with Zinke, a move that Campaign Legal Center says may run afoul of the rule that prohibits federal officials from using government resources to engage in partisan activity. (Politico)
  • The Organization of the Petroleum Exporting Countries may need to take “extraordinary” steps to sustain the recovery of the oversupplied oil market into 2018, OPEC Secretary-General Mohammad Barkindo said. The general consensus is that oil producers are succeeding in re-balancing the oil market with the agreement made by OPEC and its allies to cut oil output through March. (Bloomberg)

Business Brief

  • About 78 percent of gas production and almost 93 percent of oil output from rigs and platforms in the Gulf of Mexico were closed Sunday in the wake of Hurricane Nate, according to the Bureau of Safety and Environmental Enforcement. (Platts)
  • Honeywell International Inc. plans to spin off non-core assets and create at least two new publicly listed companies, according to sources. Honeywell is considering spinning off its turbochargers, part of its aerospace business, which produces components that improve vehicle performance and energy efficiency. (Reuters)
  • The owners of Montana’s Bull Mountain Mine warned of worker layoffs by the end of October as they asked a federal appeals court to reverse a judge’s order that could bring to a halt certain operations at the mine later this month. Signal Peak Energy last month filed an emergency motion, with the backing of the Trump administration, for U.S. District Judge Donald Molloy to reconsider his August decision that the Office of Surface Mining had not adequately considered the climate change impacts of burning the mine’s coal when it approved the mine’s expansion. (The Associated Press)

Chart Review

Events Calendar (All Times Local)

Monday
House Agriculture Committee farm bill field hearing 10 a.m.
Tuesday
ACORE Finance West, hosted by the American Council on Renewable Energy 8:45 a.m.
Waters of the United States rule discussion, hosted by The Heritage Foundation 12 p.m.
Open government on climate science, hosted by the World Resources Institute 12:30 p.m.
Atlantic Council forum on US-China relations, including the role of energy and trade talks 3:30 p.m.
Wednesday
IPFM hosts report launch on highly enriched uranium use of fuel in Russia 10 a.m.
House Agriculture Committee on the 2017 agenda for the Commodity Futures Trading Commission 10 a.m.
House Natural Resources subcommittee legislative hearing on federal lands bills 10 a.m.
House Natural Resources subcommittee hearing on oil and natural gas leasing on the OCS 2 p.m.
Thursday
CSIS hosts IEA renewable energy report launch 9:30 a.m.
House Natural Resources subcommittee on water, power and oceans holds legislative hearing 10 a.m.
House Energy and Commerce subcommittee hearing with Energy Secretary Rick Perry 10 a.m.
Bloomberg’s Sustainable Business Summit 1:30 p.m.
Friday
Bloomberg’s Sustainable Business Summit 9 a.m.
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General

Energy Dept: Perry flew charter plane on White House-requested trip
Timothy Cama, The Hill

Energy Secretary Rick Perry flew a charter plane last week to tour a coal mine after the White House requested he take the trip, the Department of Energy (DOE) said late Friday. The Sept. 28 trip to the Jeddo Coal Co. near Hazleton, Pa., was the only time Perry has used a charter flight since becoming Energy secretary in March, DOE documents show.

Top Obama Officials Spent Nearly $1 Million On Non-Commercial Flights
Michael Bastasch, The Daily Caller

Former heads of the Department of the Interior spent $971,643 chartering non-commercial flights over a six year period, according to documents obtained by The Daily Caller News Foundation. Former Secretary of the Interior Ken Salazar spent $586,196 on non-commercial flights over three years.

Watchdog group requests Hatch Act probe of Zinke’s appearance at Virgin Islands
Nick Juliano, Politico

A watchdog group is asking the Justice Department’s Office of Special Council to open a Hatch Act investigation into Interior Secretary Ryan Zinke after POLITICO reported he had appeared at a political fundraiser in the U.S. Virgin Islands while on an official trip less than a month after being confirmed. Donors who gave the Virgin Islands Republican Party between $1,500 and $5,000 per couple were invited to get their photos taken with Zinke at the March 30 event, according to a copy of the invitation seen by POLITICO and Zinke’s official schedule.

Honeywell prepares to spin off businesses – sources
Greg Roumeliotis, Reuters

Honeywell International Inc plans to spin off non-core assets and create at least two new publicly listed companies, as the U.S. industrial conglomerate seeks to streamline its business, according to people familiar with the matter. Honeywell is considering placing its turbochargers business, which produces components that improve the performance and efficiency of cars and trucks, into one of the newly created companies, the sources said.

Oil and Natural Gas

Agency says 78% of gas, 93% of US Gulf oil output shut in due to Nate
Jim Magill, Platts

About 78% of gas production and almost 93% of the oil output from the offshore US Gulf of Mexico remained shut in Sunday in the wake of Hurricane Nate, which careened through producing regions in the central Gulf before making landfall late Saturday in eastern Louisiana and then Mississippi, the US Bureau of Safety and Environmental Enforcement said. Based on data reported as of 11:30 am CDT, BSEE reported that a total of 14 rigs, representing 70% of rigs operating in the Gulf, and 298 platforms, representing 40% of operating platforms, were evacuated.

Oil prices stable after OPEC signals possible further action
Karolin Schaps, Reuters

Oil prices stabilized on Monday after one of the most bearish weeks in months, propped up by OPEC comments signaling the group and other producers may take further action to restore market balance in the long term. Oil production platforms in the Gulf of Mexico started returning to service after Hurricane Nate had forced the shutdown of more than 90 percent of crude output in the area.

OPEC Says ‘Extraordinary’ Steps Needed for Stable Market in 2018
Debjit Chakraborty and Bruce Stanley, Bloomberg

Oil producers are succeeding in re-balancing an oversupplied market, though they may need to take further steps to sustain the recovery into 2018, OPEC Secretary-General Mohammad Barkindo said. Saudi Arabia and Russia are currently leading consultations between the Organization of Petroleum Exporting Countries and other major suppliers about the future of their agreement to cut oil output, Barkindo said Sunday in New Delhi.

Energy East cancellation a ‘huge win’ for Trump, says former ambassador
Rachel Aiello, CTV News

TransCanada’s decision to cancel the $15.7 billion Energy East pipeline is a “huge win” for U.S. President Donald Trump and a big loss for New Brunswick, says Frank McKenna, former premier and Canadian ambassador to the U.S. In an interview with Evan Solomon, host of CTV’s Question Period, McKenna said TransCanada cancelling the project is a major victory for Trump’s administration.

Ghana fuel site blast kills at least 7, injures dozens
Kwasi Kpodo, Reuters

At least seven people were killed and dozens injured, mostly suffering burns, after a huge explosion at a fuel distribution site in Ghana’s capital, local authorities said on Sunday. The blast on Saturday evening was heard across much of the city, sending a giant fireball into the sky above the eastern part of Accra and causing frightened residents to flee their homes in large numbers.

Utilities and Infrastructure

Hurricane Nate unleashes flooding, power outages on Gulf Coast
Fox News

Hurricane Nate brought a burst of flooding and power outages to the Gulf Coast on Sunday — but the region, parts of which have continued to rebuild after Hurricane Katrina more than a decade ago, was largely spared of catastrophic damage. Nate — the first hurricane to make landfall in Mississippi since Katrina in 2005 — quickly lost power, with its winds diminishing to a tropical depression as it pushed northward into Alabama and toward Georgia with heavy rain.

Ron Johnson reports on recovery efforts after touring hurricane-battered Puerto Rico
Bill Glauber, Milwaukee Journal Sentinel

U.S. Sen. Ron Johnson said Sunday that it’s critically important for Puerto Rico to stand up its power generation system in the wake of Hurricane Maria. “The No. 1 component of solving Puerto Rico’s problems is a strong economy,” Johnson told the Milwaukee Journal Sentinel. “Without power they won’t have that.”

Minus Electrical Grid, Puerto Rico Becomes Generator Island
Richard Fausset et al., The New York Times

The generators are a temporary fix that is raising health and safety concerns and highlighting the stark divisions of class in a place with a 45 percent poverty rate. They are also the only option for most Puerto Ricans for now, as the island struggles with restoring its electrical system — by far the most important and complex challenge the storm has presented.

Altamonte Springs forms its own utility as it moves toward renewable energy
Martin Comas, The Orlando Sentinel

Hoping to slash the city’s annual $2 million power bill, Altamonte Springs soon will launch its own municipal utility with the goal of providing electricity from solar, wind and other renewable energy sources to government facilities, including City Hall and police and fire stations. Residents and commercial properties — such as the Altamonte Mall on State Road 436 — will continue receiving power from Duke Energy as part of the city’s franchise agreement with the North Carolina-based power company.

Renewables

Utahns love energy efficiency and buy more electric cars per capita than Californians, according to new report
Emma Penrod, The Salt Lake Tribune

Utah is rising in the ranks among the nation’s most energy-conscious states, according to a new report from the American Council for an Energy-Efficient Economy (ACEEE). Though it has yet to break into the nation’s top 10 states, Utah ranked as the fourth most improved state on ACEEE’s 2017 scorecard, thanks in part to significant reductions in its electricity and natural gas consumption, according to the report.

Coal

Montana coal mine appeals ruling that could trigger layoffs
Matthew Brown, The Associated Press

The “clock is running” on layoffs at one of the largest underground coal mines in the United States, its owners said Friday, as they asked a federal appeals court to reverse a judge’s order that could bring some work at the mine to a halt later this month. Signal Peak Energy says as many as 30 workers from the Bull Mountain Mine could run out of work by the end of October and 50 more workers by March under an August ruling from U.S. District Judge Donald Molloy.

This coal lobbyist once wrote Trump was a ‘bully.’ Now he’s the nominee for EPA’s No. 2 spot.
Dino Grandoni, The Washington Post

Trump was a “bully,” Wheeler wrote in the since-deleted Facebook post obtained by The Post, one who “hasn’t been that successful” in business and who “has more baggage then all of the other Republican candidates combined.” In an interview with The Post, Wheeler explained how he went from critic of Trump to a volunteer for the eventual GOP nominee to, ultimately, Trump’s choice for the No. 2 position at the EPA — a nomination that has engendered some of the harshest condemnation of the administration from environmentalists to date.

Nuclear

Rick Perry’s vision of hot tub-sized nuclear power plants isn’t so far-fetched
John Siciliano, Washington Examiner

Energy Secretary Rick Perry has a vision for developing fully mobile, hot tub-sized nuclear power plants that could become the latest piece in the Energy Department’s innovation and grid resiliency push. He used it as an example of what the Trump administration means when it talks about energy “innovation” as part of its energy dominance agenda.

Climate

Ohio mayor asks Trump for help combating Lake Erie algae
John Seewer, The Associated Press

Three years after toxic algae in Lake Erie tainted the drinking water for more than 400,000 people, many are still leery about what’s coming out of their faucets. Toledo’s mayor has asked President Donald Trump for help from the federal government in cleaning up the lake and wants the U.S. Environmental Protection Agency to declare the western end impaired, which would allow for increased pollution regulations.

Opinions, Editorials and Perspectives

Pruitt’s Clean Power Break
The Editorial Board, The Wall Street Journal

The Trump Administration is giving the economy a boost with its deregulatory agenda, and the latest example comes Tuesday when Environmental Protection Agency chief Scott Pruitt will propose to repeal the Obama Administration’s Clean Power Plan. Ending this power grab will uphold the letter of the law and restore cooperative federalism with the states.

The dangers of populism for the energy sector
Nick Butler, Financial Times

Populism is on the march. For the companies in sectors such as energy which can easily be targeted by populists it is particularly worrying.

Research Reports

The Emergence of Utility-Branded DER Marketplaces
Fei Wang, GTM Research

Most operating utility-branded DER marketplaces focus solely on smart and energy-efficient products, such as LED lights, power strips and smart thermostats. Utilities and vendors are working together to expand offerings beyond this limited set of products to include a broader range of DER products and services, including demand response (DR), distributed generation, energy storage and electric-vehicle charging equipment.