Energy Brief: Sempra’s Proposed Oncor Takeover Gets Approval From Bankruptcy Judge


Government Brief

  • Nuclear Regulatory Commission Commissioner Jeffrey Baran will soon be renominated for another five-year term, according to NRC Chairman Kristine Svinicki, who did not provide details on timing for Baran’s potential renomination. (Platts)
  • The House approved an almost $7.9 billion recovery aid package for the areas hit hardest by Hurricane Harvey. Senate Democrats proposed to attach a three-month debit limit extension to the Harvey disaster aid package, which President Donald Trump endorsed. (USA Today)
  • The Environmental Protection Agency, which has about 14,880 employees, may see its staffing fall to 14,428 — the lowest level since the Reagan administration. The reduction in personnel is due to the agency’s hiring freeze, buyouts offered by the Trump administration and employees eligible for retirement. (The Washington Post)

Business Brief

  • Sempra Energy received approval from a bankruptcy judge for its proposed $9.45 billion acquisition of Texas-based electrical transmissions company Oncor Electric Delivery, and Sempra now needs a decision from the Public Utility Commission of Texas in order to move forward with the acquisition. State regulators denied two earlier proposed buyouts of the bankrupt Energy Future Holdings Corp.’s majority stake in Oncor. (The Wall Street Journal)
  • Sellers of crude oil are looking for alternate refiners after assessing the damage from Hurricane Harvey to U.S. refineries after almost a quarter of the country’s refining capacity was taken offline. Traders confirmed that Asian buyers and at least one European processor have received offers or information on oil shipments set for the Gulf Coast. (Bloomberg)
  • Royal Dutch Shell and BP executives said the oil companies plan new exploration wells this year in the UK North Sea basin, continuing their investment in the region despite recent sales of aging assets. Shell, BP and other rig operators in the North Sea will pay more than $60 billion by 2050 to plug depleted wells and take down platforms. (Reuters)

Chart Review

Events Calendar (All Times Local)

Thursday
Bloomberg Government webinar on solar panel imports 10 a.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.
Friday
Atlantic Council panel discussion on U.S.-Iran science exchanges 12 p.m.
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General

House approves first installment of Hurricane Harvey disaster aid
Deborah Barfield Berry, USA Today

The $7.85 billion package includes $7.4 billion for the Federal Emergency Management Agency’s Disaster Relief Fund and $450,000 for the Small Business Administration’s disaster loan program. It is only the first tranche of what will likely be tens of billions of dollars in federal aid to the areas hit by Harvey.

EPA under Trump shrinks to near Reagan-era staffing levels
Brady Dennis, The Washington Post

The workforce of the Environmental Protection Agency could soon shrink to the lowest level since Ronald Reagan occupied the White House — part of a push to curtail the size and scope of an agency that President Trump once promised to eliminate “in almost every form.” The EPA employs about 14,880 people, but administration officials made clear this spring that they intended to reduce those numbers in several ways.

Environmentalists, automakers fight over Trump’s proposed fuel efficiency standards rollback
Josh Siegel, Washington Examiner

Environmentalists and consumer groups asked President Trump’s Environmental Protection Agency on Wednesday to keep in place fuel efficiency standards for new cars and trucks created by the Obama administration. Automakers, meanwhile, continued to press for relief from the rules, arguing low gasoline prices have weakened consumer demand for hybrid-electric cars and smaller fuel-efficient models.

Hunters Sour On Trump’s Interior Secretary Over Public Lands Review
Kirk Siegler, NPR News

Hunters, fishermen and other sportsmen had high expectations when Ryan Zinke was tapped to be President Trump’s interior secretary, in part because of his promise to bring a balanced, Teddy Roosevelt-style vision to managing public lands. But the former Republican congressman from Montana is now the target of a critical ad campaign by one of those groups, a symptom of eroding support among a deep-pocketed faction that has become increasingly influential.

Oil and Natural Gas

Oil for U.S. Hawked to Others as Storm Snarls Flows of Crude
Serene Cheong, Bloomberg

Sellers of crude to U.S. refineries that are still assessing the damage from Hurricane Harvey are seeking an alternative home for their supply. The refiners are being approached as they prepare to secure crude from within the region and the Middle East for November.

Oil firms as U.S. Gulf refineries restart, dollar softens
Ahmad Ghaddar, Reuters 

Brent oil prices firmed on Thursday, hovering near 3-1/2-month highs as U.S. refiners restarting after Tropical Storm Harvey increased their crude processing and the U.S. dollar declined. Brent crude futures were up 39 cents at $54.59 a barrel by 0921 GMT, close to their highest since May 25.

Harvey damage prompts TransCanada to extend pipeline open season
Nia Williams, Reuters

TransCanada Corp will extend the open season on its Keystone pipeline system by a month because of the unprecedented flooding and damage caused by Hurricane Harvey slamming into the Gulf Coast region in late August, the company said on Wednesday. Shippers will now have until Oct. 26 to sign up for committed capacity on the existing Keystone and proposed Keystone XL pipelines that will carry crude from Alberta’s oil sands to Cushing, Oklahoma and the Gulf Coast.

BP, Shell tie future to North Sea despite broad retreat
Ron Bousso, Reuters

Two of the most veteran oil and gas producers in the UK North Sea, Royal Dutch Shell and BP, still tie their future to the ageing offshore basin despite a broad retreat in recent years. Both companies plan to explore this year for new resources in the North Sea, one of the oldest deepwater hubs faced with harsh weather conditions, executives told Reuters.

Spicer keynoting energy conference Trump addressed in 2016
Shannon Vavra, Axios

Sean Spicer will be speaking later this month at Shale Insight 2017 in Pittsburgh for a public-private discussion on shale development and gas-drilling technical insights, the conference organizers announced Wednesday. Trump spoke to the conference last year as a presidential candidate.

Utilities and Infrastructure

Sempra Energy Gets Bankruptcy Court Approval of $9.45 Billion Oncor Deal
Peg Brickley, The Wall Street Journal

A bankruptcy judge signed off on Sempra’s proposed acquisition, which still needs approval from the Public Utility Commission of Texas. State regulators have squashed two earlier attempted buyouts of Oncor, one of the largest electricity transmissions businesses in the country.

Sophisticated hacking campaign has targeted energy sector since 2015
Joe Uchill, The Hill

Hackers have been implanting malware in the international energy sector  — including in the United States — in a newly discovered, sophisticated campaign dating back to late 2015, according to a report released Wednesday. Symantec identified the new campaign, which displayed a rapid uptick in activity in 2017.

Massachusetts utilities take divergent approaches to grid modernization
Herman Trabish, Utility Dive

Massachusetts regulators ordered the state’s utilities to develop a grid modernization plan (GMP) in 2014 but divergent approaches have so far prevented implementation. Utilities were to reduce the effects of outages, optimize demand to reduce system and customer costs, integrate distributed energy resources (DER), and improve workforce and asset management.

Renewables

Can Denver cut its greenhouse-gas emissions by 80 percent? It will take 100 percent renewable energy
Bruce Finley, The Denver Post

Denver floated strategies on Wednesday for meeting its big climate change goal, including pushing Xcel Energy to supply electricity only from renewable sources before 2030. If these strategies are adopted, Denver would join Aspen, Boulder, Nederland and Pueblo among the more than 35 U.S. cities committed to using only renewable energy.

Huge Tunisian solar park hopes to provide Saharan power to Europe
Arthur Nelsen, The Guardian

An enormous solar park in the Sahara could soon be exporting electricity to Europe if Tunisia’s government approves an energy company’s request to build it. The 4.5GW mega-project planned by TuNur would pipe electricity to Malta, Italy and France using submarine cables in the grandest energy export project since the abandoned Desertec initiative.

Coal

TVA: Coal ash removal near Gallatin power plant would take 24 years
Jonathan Mattise, The Associated Press

A federal utility says it would take 24 years to dig up and move its coal ash at a Tennessee power plant under a court order that it still might appeal. The Tennessee Valley Authority said it will start the massive undertaking at its Gallatin Fossil Plant within 30 days unless a judge orders otherwise, according to the utility’s court filing in U.S. District Court in Nashville on Tuesday.

WVU report: Increased coal production lifts business index
Fred Pace, The Huntington Herald-Dispatch

An increase in the Mountain State Business Index has been attributed mostly to increased coal production, according to economists at West Virginia University. The MSBI jumped 0.3 percent in August, marking the index’s 11th month-to-month gain over the past 13 months, the economists reported, and the index has risen 1.3 percent on an annualized basis over the past six months and posted a 2.0 percent gain over its August 2016 reading, returning to its highest level since the second quarter of 2015.

Rio Tinto climbs after 50% lift in coal reserves at Australian mine
Edward White, Financial Times

Rio Tinto shares lifted 1 per cent on Thursday morning after the company announced a 50 per cent increase in reserves at one of its Australian coal mines amid ongoing speculation the operation has been placed on the market. The mining giant lifted its resource estimate for the Kestrel mine in central Queensland from 123m tonnes to 185m tonnes.

Nuclear

US NRC Commissioner Jeffrey Baran to be nominated soon for another term
Steven Dolley, Platts

US Nuclear Regulatory Commission Commissioner Jeffrey Baran will soon be nominated for another five-year term, NRC Chairman Kristine Svinicki said during an agency public meeting Wednesday. Baran in his opening remarks did not comment on his potential renomination.

Two Florida nuclear plants likely to shut if Irma stays on path
Timothy Gardner, Reuters

Energy firm Florida Power & Light (FPL) said on Wednesday it could shut its four nuclear reactors in the path of Hurricane Irma before Saturday if the storm stayed on its current path. The trajectory of Irma, a Category 5 storm with winds of 185 miles per hour (295 km per hour), is uncertain.

Climate

First Harvey, Then Irma and Jose. Why? It’s the Season.
Henry Fountain, The New York Times

Hurricane experts say that the formation of several storms in rapid succession is not uncommon, especially in August, September and October, the most active months of the six-month hurricane season. As to whether climate change has somehow made this year worse, the links between climate change and hurricane activity are complex and there are still many uncertainties.

Opinions, Editorials and Perspectives

DOE Report Misses Disruptor Coming to Energy Grid: Predictive Analytics
Sonny Garg, Morning Consult

In late August, the Department of Energy released its long-awaited report on the reliability of the U.S. energy grid. But what’s missing from the report is what will disrupt the entire energy industry next: predictive analytics.

Rethinking the meaning of ‘reliability’ and ‘resiliency’ in the wake of DOE grid reliability study
Tanuj Deora, Utility Dive

The primary takeaway from the report – that the early retirement of coal and nuclear power plants is due primarily to the low cost and abundant supply of natural gas, not DOE policy on renewables – has captured the most attention. My concerns are actually not so much with the report’s conclusions as with its approach.

In Harvey’s wake, energy security legislation needed now more than ever
Rep. Fred Upton (R-Mich.) and Valerie Brader, The Hill

In July, the U.S. House passed with overwhelming Republican and Democratic support H.R. 3050, the Enhancing State Energy Security Planning and Emergency Preparedness Act of 2017. As Hurricane Harvey has taught us, making sure our energy resources are safe, secure and plentiful should not be a partisan issue.

Democrats Have the Green Party Blues
George Melloan, The Wall Street Journal

Although the Greens operate under the flag of environmentalism, they have greater ambitions. They are a modern manifestation of a back-to-nature movement, feeding on the guilt and anxiety that accompany scientific advance.

Research Reports

Dragonfly: Western energy sector targeted by sophisticated attack group
Symantec Security Response

The energy sector in Europe and North America is being targeted by a new wave of cyber attacks that could provide attackers with the means to severely disrupt affected operations. The group behind these attacks is known as Dragonfly.

Parasite biodiversity faces extinction and redistribution in a changing climate
Colin Carlson et al., Science Advances

We compiled the most comprehensive spatially explicit data set available for parasites, projected range shifts in a changing climate, and estimated extinction rates for eight major parasite clades. Despite high local extinction rates, parasite richness could still increase by an order of magnitude in some places, because species successfully tracking climate change invade temperate ecosystems and replace native species with unpredictable ecological consequences.