Energy Brief: Russia, Saudi Arabia Discuss Extending Oil Production Cuts Beyond March

Government Brief

  • The Environmental Protection Agency confirmed through aerial imagery that 13 of the 41 Superfund sites in Texas were flooded by Tropical Storm Harvey. EPA staff found no significant damage at two sites in Corpus Christi. (The Associated Press)
  • The EPA’s new system for vetting hundreds of millions of dollars in grant spending has raised concerns among some career officials and outside experts that grant money is being politicized. Former Trump campaign aide John Konkus reviews every award to ensure that federally funded work aligns with the Trump administration’s priorities and is said to instruct grant officers to remove references to climate change in solicitations. (The Washington Post)
  • Trump intends to nominate Rep. Jim Bridenstine (R-Okla.), a supporter of space exploration and a climate change skeptic, to lead the National Aeronautics and Space Administration. As a member of the House Science, Space, and Technology Committee, Bridenstine criticized the Obama administration’s spending on global warming research but said he did not oppose studying the climate, a large research component of NASA’s work. (NPR News)

Business Brief

  • Russian and Saudi Arabian representatives talked about extending oil production cuts past March 2018, according to Russia’s energy minister. On Monday, Iran’s oil minister said the compliance of oil production caps imposed by the Organization of the Petroleum Exporting Countries and non-OPEC participants like Russia has improved, despite the July reports of low compliance from the International Energy Agency. (CNBC)
  • Many U.S. refineries taken offline by Hurricane Harvey gradually restarted, ending a spike in gasoline prices while raising U.S. oil prices. Gasoline futures returned to pre-Harvey levels as shipping channels, pipelines and refineries partly restarted operations. (Reuters)
  • Mexican consumers cut back on natural gas consumption when their U.S. gas imports dropped 16 percent after Hurricane Harvey hit. Bloomberg analyst Jacob Fericy said more than half of Mexico’s natural gas comes from the U.S., making Mexico vulnerable to market disruptions in the U.S. as well as policy changes like Trump’s threats to withdraw from the North American Free Trade Agreement. (Bloomberg)

Chart Review

Events Calendar (All Times Local)

House Rules Committee hearing on FY2018 DOI, Environment and Related Agencies appropriations bill 4 p.m.
Atlantic Council panel discussion on modernizing NAFTA, North American energy sector 9 a.m.
EPA public hearing on mid-term evaluations for greenhouse gas emissions standards 9 a.m.
House Energy and Commerce subcommittee hearing on PURPA objectives 10 a.m.
House Science Committee subcommittee hearing on the EPA’s IRIS program 10 a.m.
House Natural Resources Committee legislative hearing on federal leasing bills 10 a.m.
House Energy and Commerce subcommittee hearing on unimplemented recommendations from the GAO, OIG for the EPA 10:15 a.m.
Georgetown University event on energy inclusion and its economic, social, financial challenges 3 p.m.
Western Governors’ Association webinar on species conservation 10:30 a.m.
Senate Energy and Natural Resources hearing for FERC, DOI nominees 10:30 a.m.
Atlantic Council panel discussion on U.S.-Iran science exchanges 12 p.m.

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EPA determines 13 Superfund sites flooded and possibly damaged in Houston area
The Associated Press

On Saturday, hours after the AP published its first report, the EPA said it had reviewed aerial imagery confirming that 13 of the 41 Superfund sites in Texas were flooded by Harvey and were “experiencing possible damage” due to the storm. The statement confirmed the AP’s reporting that the EPA had not yet been able to physically visit the Houston-area sites, saying the sites had “not been accessible by response personnel.”

EPA now requires political aide’s sign-off for agency awards, grant applications
Juliet Eilperin, The Washington Post

The Environmental Protection Agency has taken the unusual step of putting a political operative in charge of vetting the hundreds of millions of dollars in grants the EPA distributes annually, assigning final funding decisions to a former Trump campaign aide with little environmental policy experience. In this role, John Konkus reviews every award the agency gives out, along with every grant solicitation before it is issued. According to both career and political employees, Konkus has told staff that he is on the lookout for “the double C-word” — climate change — and repeatedly has instructed grant officers to eliminate references to the subject in solicitations.

Trump’s EPA attacks AP reporter in personal terms
Matthew Nussbaum, Politico

President Donald Trump’s habit of singling out reporters for attacks is being adopted by his federal agencies, with the Environmental Protection Agency excoriating an Associated Press reporter in unusually personal terms on Sunday after the reporter wrote a story that cast the agency in an unfavorable light. The agency accused the reporter of an ‘incredibly misleading story’ about its Harvey response ‘from the comfort of Washington.’

Trump Picks Oklahoma Congressman To Head NASA
Nell Greenfieldboyce, NPR News

President Trump’s pick for the next leader of NASA is a fighter pilot who wants Americans to return to the moon but doesn’t believe that humans are causing climate change. Rep. Jim Bridenstine of Oklahoma has to be confirmed by the Senate before taking charge of NASA, and the two senators who represent Florida’s Space Coast have already publicly objected to the choice of a politician as head of the space agency.

Dems prep for major fight over Trump USDA science pick
Timothy Cama, The Hill

President Trump’s pick to be the U.S. Department of Agriculture’s (USDA) chief scientist is on track to face one of the rougher confirmation battles of the administration. Democrats are girding for an all-out battle against Sam Clovis’s nomination to be USDA’s under secretary for research, education and economics, a position that would see him overseeing billions of dollars in research spending and serving as a cross-departmental science czar.

Germany’s Merkel, Vulnerable on Diesel Emissions, Moves to Address Issue
Melissa Eddy, The New York Times

The diesel-emissions issue has emerged as a vulnerability for Ms. Merkel, who has been accused of being too cozy with Germany’s powerful automobile industry. The meeting on Monday followed a pledge by industry executives and members of her government expressing their continuing support for diesel as a bridge technology.

U.S. crude rises on returning refineries; gasoline slumps to pre-Harvey levels
Henning Gloystein, Reuters

U.S. oil prices rose on Tuesday as the gradual restart of refineries in the Gulf of Mexico that were shut by Hurricane Harvey raised demand for crude, their main feedstock. U.S. West Texas Intermediate (WTI) crude futures were at $47.55 barrel at 0656 GMT, up 26 cents, or 0.55 percent, from their last settlement.

Oil and Natural Gas

Oil jumps as Russia and Saudi Arabia discuss extending output cut deal
Gemma Acton, CNBC

Oil prices marched higher on Tuesday following reports indicating that Russia and Saudi Arabia are considering extending the oil production cut deal agreed between both OPEC and non-OPEC members once it expires in March 2018. Russia’s Energy Minister Alexander Novak was a key architect of the output cut deal that was extended by nine months last May.

Wrath of Harvey Lays Bare Mexico’s U.S. Natural Gas Addiction
Ryan Collins, Bloomberg

Hurricane Harvey’s crushing blow to the U.S. energy industry reveals just how dependent Mexico has become on natural gas from its northern neighbor. The storm’s wrath forced cross-border gas pipelines in Texas to shut and prevented tankers from loading cargoes of the fuel.

Trump’s natural gas vision may prove impervious to Harvey
John Siciliano, Washington Examiner

The Trump administration’s big push to export more U.S. natural gas to Europe, Asia, and beyond may prove impervious in the aftermath of Hurricane Harvey’s wrath, as the country’s leading exporter of the gaseous fossil fuel on the Gulf Coast was able to continue business as normal during the storm. Amid the chaos that typically accompanies the aftermath of such a record-breaking storm, the Cheniere liquefied natural gas terminal at Sabine Pass was virtually overlooked.

Utilities and Infrastructure

Utilities Were Warned Before SC Nuke Plant Flop
Meg Kinnard, The Associated Press

Utility companies apparently were warned well in advance about serious problems plaguing a doomed South Carolina nuclear reactor project. That’s according to an independent analysis of the nuclear plant project advised Santee Cooper and South Carolina Electric & Gas Co. to hire someone to enforce contractor accountability at the V.C. Summer Nuclear Station, where two new reactors were being built.

Industrial Consumers Concerned by Efforts to Expand LNG Exports
Michael Brooks and Rich Heidorn Jr., RTO Insider

The U.S. is becoming a net exporter of natural gas for the first time since 1958, a boon to the nation’s balance of trade and a bragging point for the Trump administration but a source of concern for industrial gas customers for whom cheap gas has sparked a resurgence in U.S. chemical production. The historic shift is the result of both increased pipeline shipments to Canada and Mexico and increasing LNG exports.


Better Than a Battery? Big Energy Backs Hydrogen Power Storage
Anna Hirtenstein, Bloomberg

Hydrogen has drawn backing from big energy companies from Royal Dutch Shell Plc to Uniper SE in addition to carmakers BMW AG and Audi AG. While industry’s investment in hydrogen is small at just $2.5 billion over the last decade, the work offers an answer to the elusive question of how electricity could be kept for use in the future.

Giant Batteries Help Renewable Energy Grow In New England
Fred Bever, WBUR News

Here, in the shadow of the old fossil-fuel plant, Plew led the development of New England’s biggest-yet battery. Giant batteries are starting to make a mark on the electricity grid that serves all of New England — the unique characteristics of which could supercharge solar and wind energy development in the region.

St. Paul company is one of first in country to install Tesla’s Powerwall
Jim Buchta, Minneapolis Star Tribune

Ross Starfeldt, weary of power outages at his Bloomington house, recently bought a suitcase-size battery to hang on the wall of his garage, becoming one of the first Minnesotans to embrace billionaire Elon Musk’s vision of the future. The lithium-ion battery was built by Musk’s Tesla Inc., which is betting on success with battery-operated houses just as with electric cars.

China to call on Denmark to help build offshore wind farm
Teis Jensen, Reuters

China will tap Denmark, home to some of the world’s largest offshore energy companies, to help it build a wind farm, Denmark’s energy minister said on Monday. China, the world’s biggest emitter of greenhouse gases, plans to raise its non-fossil fuel portion of primary energy consumption to 15 percent from 12 percent by 2020.


Trump names former coal executive to top mining safety post
Jacqueline Thomsen, The Hill

President Trump has nominated a former coal executive whose company clashed with federal officials over mining safety rules under President Obama to the top mining safety post in his administration. Trump on Friday named David Zatezalo, the former chairman of Rhino Resources, to be an assistant secretary of Labor overseeing the Mine Safety and Health Administration (MSHA).

Montana coal mine production up 2 million tons
Tom Lutey, The Billings Gazette

Montana coal production is more than 2 million tons ahead of where it was this time last year, although analysts say the future is far from bright for the fossil fuel. Most of the production is coal mined from Spring Creek, a Cloud Peak Energy mine in southeast Montana.

Details of royalty deal for mega mine are still being negotiated with Adani, says Queensland
Joshua Robertson, The Guardian

Queensland’s government says it is still negotiating with Adani over the details of its royalties agreement for its $16.5bn Carmichael mine, despite the deal being officially agreed months ago. Adani announced in May it had reached agreement with the government over royalty payments, after a more generous offer of concessions was scrapped amid internal pressure from within the state Labor cabinet and caucus.


Subsidizing new nuclear power such as Vogtle reactors in nation’s interest, says expert
Tom Corwin, The Augusta Chronicle

Adding two new nuclear reactors at Plant Vogtle is going to need some help from Congress and the federal government to work, according to Georgia Power’s request to continue. And it is in the national interest to subsidize new nuclear power the way the government is helping wind and solar power technologies, a nuclear engineer said.

Egypt finalizes deal with Russia for first nuclear plant
The Associated Press

Russian media say Egypt has finalized a deal to build a nuclear power plant with funding from Moscow after nearly two years of negotiations. The reports Monday came after Egypt’s President Abdel-Fattah el-Sissi met with Russian President Vladimir Putin in China, where they were attending a summit.


In a changing Arctic, a lone Coast Guard icebreaker maneuvers through ice and geopolitics
Dan Lamothe, The Washington Post

The warming climate has created Arctic waterways that are growing freer of ice, and with China and Russia increasingly looking toward the region for resources, the United States is studying how many new icebreakers to build, whether to arm them with cruise missiles, and how to deal with more commercial traffic in an area that is still unpredictable and deadly. Adm. Paul Zukunft, the Coast Guard commandant, recently warned that Russia and China are already encroaching on Arctic waters over the extended U.S. continental shelf.

Swedish center-left govt promises $627 million for climate in 2018 budget
Simon Johnson, Reuters

Sweden’s center-left government will invest a total of 5 billion Swedish crowns ($627 million) as part of its 2018 budget to counter the effects of climate change, it said on Monday. Measures will target both industry and individuals, for example by increasing subsidies for hybrid and electric cars.

Opinions, Editorials and Perspectives

DOE Grid Study Shows How Regulatory State Disadvantages Hydro, Nuclear
William Murray, Morning Consult

The U.S. Energy Department’s recently issued study of the electric grid quickly is gaining notice as perhaps the most well-reasoned domestic policy document to come out of the Trump administration thus far. The intent of the 181-page report was to study whether the grid could maintain its reliability, even as intermittent power from renewable energy sources begin to displace baseload coal and nuclear power.

Cuomo’s Fracking Opposition Hurts New York
Jay Cleveland, The Wall Street Journal

The economic fallout from Gov. Andrew Cuomo’s rejection of the Constitution pipeline should serve as a warning to other states that want to go down the same path as New York. Radical “keep it in the ground” protesters have their sights on the Mountain Valley and Atlantic Coast pipelines currently under review along the East Coast that will connect millions of American workers, families and businesses to more affordable and cleaner energy.

We Don’t Deny Harvey, So Why Deny Climate Change?
Nicholas Kristof, The New York Times

We can’t have an intelligent conversation about Harvey without also discussing climate change. That’s awkward for a president who has tweeted climate change skepticism more than 100 times, even suggesting that climate change is a Chinese hoax, and who has announced he will pull the U.S. out of the Paris climate accord.

Research Reports

Dynamic niche partitioning in root water uptake facilitates efficient water use in more diverse grassland plant communities
Marcus Guderle et al., Functional Ecology

Efficient extraction of soil water is essential for the productivity of plant communities. However, research on the complementary use of resources in mixed plant communities, and especially the impact of plant species richness on root water uptake, is limited.