Energy Brief: Saudi Aramco to Make ‘Unprecedented’ Cuts to Crude Supply Next Month


Government Brief

  • House Natural Resources Committee Chairman Rob Bishop (R-Utah) introduced legislation that would overhaul the Antiquities Act, with a committee markup scheduled for Wednesday. Under the measure, the president would retain the authority to designate national monuments of 640 acres, so long as they’re no closer than 50 miles to existing  monument boundaries, and such designations would not require an environmental impact report or a National Environmental Policy Act review. (The Deseret Times)
  • Environmental Protection Agency Administrator Scott Pruitt said the wind and solar power industries’ federal tax credits — which expire completely in 2020 and 2022, respectively — should be eliminated. Ending the tax credits would be a congressional decision, outside the purview of the EPA, but Pruitt said the credits unfairly prop up renewable energy, an industry he said should be left to compete on its own against coal, natural gas and other sources of electricity. (The Hill)
  • Interior Department secretaries during the Obama administration spent a combined $971,634 on non-commercial travel on 81 trips — including chartered planes and agency aircraft — during a seven-year period, according to records submitted to the House Oversight and Government Reform Committee. The information was requested following scrutiny of expenses accrued by Trump administration officials, including Interior Secretary Ryan Zinke’s six trips since March that cost $72,849 in non-commercial travel. (CNN)

Business Brief

  • Saudi Arabia’s energy ministry said that state-run oil company Aramco plans its deepest output cuts next month — 560,000 barrels a day in its allocations to customers — in an effort to reduce global crude inventories. Saudi Arabia scaled back exports in September to less than 6.7 million barrels a day, and now plans to go beyond the supply cuts it promised to the Organization of the Petroleum Exporting Countries. (Bloomberg)
  • Offshore energy company Helix Energy Solutions Group Inc. is in the early stages of working with bankers on a potential sale, according to sources. Helix provides services such as well intervention, subsea contracting and drilling support. (The Wall Street Journal)
  • Separating the utility that operates electrical and gas businesses in Minnesota and North Dakota has a “substantial likelihood” of higher costs for consumers and no long-term benefits for North Dakota, according to a consultant for the North Dakota Public Service Commission. Xcel Energy Inc. last month proposed splitting its utility subsidiary — Minnesota-based Northern States Power Company — in response to Minnesota’s push for cleaner energy. (The Associated Press)

Chart Review

Events Calendar (All Times Local)

Tuesday
Insights on cybersecurity for electric utilities forum hosted by NRECA 8:30 a.m.
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.
House Natural Resources Committee marks up Antiquities Act legislation 4 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.
2017 Energy Efficiency Forum 1 p.m.
Bloomberg’s Sustainable Business Summit 1:30 p.m.
Women’s Energy Network October happy hour 5:30 p.m.
Friday
Bloomberg’s Sustainable Business Summit 9 a.m.
House Natural Resources subcommittee legislative hearing for onshore energy policy 9 a.m.
Forum on Mexico’s energy outlook hosted by Woodrow Wilson Center 4:30 p.m.
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General

Bishop pitches ‘common-sense approach’ to reforming Antiquities Act
Amy Joi O’Donoghue, The Deseret Times

Rep. Rob Bishop, R-Utah, says 640 acres is the magic number within the purview of a U.S. president who wants to designate a national monument without public process, as long as it is no closer than 50 miles to existing monuments’ boundaries. Bishop on Monday unveiled HR3990 and set it for a markup hearing Wednesday before the House Committee on Natural Resources, which he chairs.

Obama interior secretaries spent over $971,000 on non-commercial air travel
Rene Marsh, CNN

Just over $971,000 was spent on non-commercial travel for interior secretaries in the Obama administration during a seven-year period, according to records obtained by CNN. That would include travel on both chartered planes as well as on Interior Department aircraft.

Activists vow fighting in the streets over EPA’s Clean Power Plan repeal
John Siciliano, Washington Examiner

A leading anti-fossil fuel group is vowing to take the fight over the Clean Power Plan to the streets, as well as the courts, after Environmental Protection Agency Administrator Scott Pruitt announced Monday his plan to repeal the restrictions on coal-fueled power plants on Tuesday. “Slashing climate policy is par for the course in the Trump administration, but we won’t let it go unchallenged,” said May Boeve, executive director of the group 350.org.

Oil and Natural Gas

Saudis to Make Deepest Cut to Crude Supply Despite Demand
Nayla Razzouk, Bloomberg

Saudi Aramco plans to make “the deepest customer allocation cuts in its history” in oil supplies in November to help reduce global inventories and balance the market. State-run Saudi Arabian Oil Co., known as Aramco, will make an “unprecedented” cut of 560,000 barrels a day in its allocations to customers next month, the Saudi energy ministry said in a statement.

Oil rises to $56 on Saudi export cut
Alex Lawler, Reuters

Oil rose to around $56 a barrel on Tuesday, supported by Saudi Arabian export cuts in November and comments from OPEC and trading companies that the market is rebalancing after years of oversupply. Brent crude, the international price benchmark, was up 32 cents at $56.11 a barrel at 0950 GMT.

Helix Energy Solutions Exploring Strategic Alternatives
Dana Mattioli, The Wall Street Journal

Offshore energy company Helix Energy Solutions Group Inc. is exploring strategic alternatives. The Houston-based company is working with bankers on a potential sale, according to people familiar with the matter.

Lack of oil investment could bring shortage, price spike by 2020s
Brian Scheid and Megan Gordon, Platts

An oil supply shortage and price spikes of $80-$100/b could hit the global oil market by the 2020s if producers do not fund major projects soon, and rising US tight oil supply will not be able to stop this trend, said Jonathan Chanis, vice president of policy at Securing America’s Future Energy. “We’re at a very perilous point because we’ve had two years of a really, really marked decline in investment,” Chanis said on Monday’s episode of the S&P Global Platts Capitol Crude podcast.

Utilities and Infrastructure

EPA chief: I’d ‘do away with’ wind, solar tax credits
Timothy Cama, The Hill

Environmental Protection Agency (EPA) chief Scott Pruitt said the hot-button wind and solar power industries’ federal tax credits should be eliminated. Pruitt told a crowd at a Kentucky Farm Bureau event Monday that the tax credits stand in the way of power companies making the best decisions about generation.

Xcel Energy may split subsidiary for Minnesota, North Dakota
Steve Karnowski, The Associated Press

Xcel Energy has proposed splitting its utility operations in North Dakota and Minnesota, telling regulators that widening policy differences between the two states over clean energy have caused stresses that might best be resolved through a breakup. But a consultant for the North Dakota Public Service Commission is arguing against the separation, saying there would be “no long-term benefits” for North Dakota, only a “substantial likelihood” of higher costs for customers.

Renewables

Solar competitors band together to help bring electricity to storm-ravaged Puerto Rico
Tucker Higgins, CNBC

Solar companies are banding together to help restore electricity to parts of storm-ravaged Puerto Rico as 90 percent of the island’s 3.5 million residents remain without power. Solar supplies such as roofing, generators and lighting equipment worth about $2 million are expected to arrive in the territory in the coming weeks.

Microsoft to buy all the power from new Irish wind farm
Andrew Ward, Financial Times

Microsoft has struck a deal with General Electric to buy all the electricity from a new wind farm in Ireland to power its cloud computing services — the latest example of multinational companies driving demand for renewable energy. The US technology group said it would also acquire an Irish energy supply licence as part of the deal, allowing it to sell surplus electricity into the National Grid.

There’s enough wind energy over the oceans to power human civilization, scientists say
Chris Mooney, Washington Post

New research published on Monday finds there is so much wind energy potential over oceans that it could theoretically be used to generate “civilization scale power” — assuming, that is, that we are willing to cover enormous stretches of the sea with turbines, and can come up with ways to install and maintain them in often extreme ocean environments. It’s very unlikely that we would ever build out open ocean turbines on anything like that scale — indeed, doing so could even alter the planet’s climate, the research finds.

Coal

Scientists say cost of capturing CO2 declining
Michael Virtanen, The Associated Press

Now in limited use removes about 90 percent of carbon dioxide from the smokestacks of coal-fired power plants, but energy experts say cost remains the chief obstacle to bringing the “clean coal” touted by President Donald Trump into the mainstream. They cite recent advances in applying the longstanding technology, despite some earlier setbacks, but say the U.S. power sector needs bigger tax credits or other incentives to close the cost gap for using them.

Nuclear

Fukushima court orders Japanese government and TEPCO to pay damages over nuclear disaster
Deutsche Welle

A Fukushima court has ordered the Japanese government and nuclear plant operator TEPCO to pay damages for the 2011 triple meltdown. The case was the largest class action suit brought over the nuclear disaster.

University of Texas Explores Bid to Manage Nuclear Lab
The Associated Press

The University of Texas is among the educational and business institutions considering bids to manage Los Alamos National Laboratory. The university system’s regents recently approved spending up to $4.5 million to prepare a bid to run the northern New Mexico facility.

Areva’s Finland reactor to start in 2019 after another delay
Jussi Rosendahl and Tuomas Forsell, Reuters

The start of regular power production at Finland’s biggest nuclear reactor Olkiluoto 3 will be pushed back another five months to May 2019, owner Teollisuuden Voima (TVO) said on Monday, the latest in a decade of delays. Originally planned to start in 2009, its most recent target for regular power production had been the end of 2018.

Climate

Hillary Clinton links climate change to recent wildfires, hurricanes in California speech
J.J. Gallagher, ABC News

Former Democratic presidential candidate Hillary Clinton linked climate change with the spate of hurricanes and now wildfires that have hit the country in recent weeks. Clinton’s remarks come as the state faces one of the deadliest wildfire outbreaks in its history.

Dirty Old Birds Shed Light on Key Global Warming Particle
The Associated Press

Feathers of birds in the 1900s were blacker than birds just 20 or 30 years later, suggesting that there was more soot in the atmosphere than scientists originally thought, according to a study published Monday in the Proceedings of the National Academy of Sciences. This is important because scientists believe soot, also called black carbon, has an important role in climate change.

Opinions, Editorials and Perspectives

The E.P.A.’s Smoke and Mirrors on Climate
Richard Revesz and Jack Lienke, The New York Times

In a leaked series of new analyses, the agency claims that jettisoning the Clean Power Plan, which limits planet-warming carbon dioxide emissions from the nation’s power plants, will save electric power producers up to $33 billion annually by 2030. But just two years ago, the agency estimated that the plan’s emissions goals could be achieved at less than a fifth of that price.

Rick Perry, put American electricity consumers first
Greg Wetstone, The Hill

Two unprecedented and dramatically different policy processes are unfolding this month within little known government agencies. The first looks to prop up coal and nuclear plants and the second seeks to impose tariffs on solar panels.

Change political climate to address environment
Jamie Raskin and Shane Robinson, Baltimore Sun

The arrival of record-shattering hurricanes, forest fires in the West the size of Maryland, and collapsing glaciers makes something clear to anyone not in a state of ideological denial: Humanity is in a fight for its survival, and if we have any hope of saving ourselves from endless climate disasters, we must radically change the political climate first.

Research Reports

Trees harness the power of microbes to survive climate change
Jennifer Lau et al., Proceedings of the National Academy of Sciences of the United States of America

Some of the most complex microbiomes are found in soils, where they are responsible for nutrient cycling, crop yield, and carbon sequestration. In some cases, soil microbes can even rescue plants from the negative consequences of climate change.