Energy Brief: Zinke Embarks on Massive Reorganization of Interior Department


Government Brief

  • Interior Secretary Ryan Zinke has begun a massive reorganization of his department that seeks to move tens of thousands of workers to new locations as it divides the United States into 13 regions that would have a centralized authority for different parts of the Interior within each region. Zinke said the 13 new regions would help the federal government to better manage land and water across the nation and to handle crises as a coordinated unit. (The Washington Post)
  • Zinke’s decision to exempt Florida from a plan to expand offshore oil and gas drilling at the request of the state’s Republican governor, Rick Scott, has failed to satisfy Florida’s GOP congressional lawmakers, who are calling for a permanent ban on offshore drilling in the eastern Gulf of Mexico. Meanwhile, representatives in the energy industry criticized Zinke’s move, with the National Ocean Industries Association calling it “disappointing and premature.” (Politico)
  • The Environmental Protection Agency’s inspector general said it will expand its investigation into Administrator Scott Pruitt’s use of private and military flights and his frequent trips to his home state of Oklahoma to include Pruitt’s travels through 2017, including a $40,000 trip to Morocco in December to promote natural gas. Sen. Tom Carper (D-Del.), who requested the investigation of the Morocco visit, says Pruitt’s travel to that country was inappropriate because it is the Federal Energy Regulatory Commission, not the EPA, that oversees natural gas exports. (Washington Examiner)

Business Brief

  • President Donald Trump is expected to receive by Friday a formal recommendation to impose trade penalties on imported solar panels, according to several industry sources. The administration has until Jan. 26 to address a claim by two solar manufacturers that says they have been harmed by cheap solar cells and panels made overseas. (E&E News)
  • Attorneys general in 18 states, including New York and California, are pressing FERC to ensure utilities pass on to customers their tax savings under the new federal tax law, which lowered the corporate rate to 21 percent from 35 percent. (Bloomberg)
  • The United Arab Emirates’ energy and industry minister, Suhail al-Mazrouei, said oil markets have yet to completely balance supply against demand, but 2018 will be the year when they achieve this. In November, OPEC and 10 non-OPEC producers led by Russia agreed to extend oil output cuts in the hopes of pushing up oil prices. (CNBC)

Chart Review

Events Calendar (All Times Local)

Thursday
EPA webinar on applying for a P3 grant 2 p.m.
CSIS discussion with former Energy Secretary Ernest Moniz 4 p.m.
Friday
No events scheduled

2017 Brands in Review

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General

Interior plans to move thousands of workers in the biggest reorganization in its history
Juliet Eilperin and Darryl Fears, The Washington Post

Interior Secretary Ryan Zinke launched an unprecedented effort Wednesday to undertake the largest reorganization in the department’s 168-year history, moving to shift tens of thousands of workers to new locations and change the way the federal government manages more than 500 million acres of land and water across the country.

EPA inspector general to probe Scott Pruitt’s trip to Morocco to promote natural gas
Josh Siegel, Washington Examiner

EPA’s inspector general said Wednesday it will investigate Administrator Scott Pruitt’s recent trip to Morocco to promote natural gas.

At Trump’s EPA, once-public chemical safety reviews go dark
Corbin Hiar, E&E News

The U.S. Environmental Protection Agency (EPA) appears to no longer be releasing preliminary assessments of potentially hazardous new chemicals or new uses of existing chemicals, according to documents reviewed by E&E News. The development means the public has no way to know whether the agency has initial concerns or has granted companies preliminary authorization to begin manufacturing new chemicals or using them in novel ways.

Trump: U.S. could ‘conceivably’ re-enter Paris deal, but it threatened ‘competitive edge’
Aubree Eliza Weaver, Politico

President Donald Trump said Wednesday the United States could “conceivably” re-enter the Paris climate agreement, but he said the deal would have jeopardized the country’s competitive edge. Trump spoke during a news conference with Norwegian Prime Minister Erna Solberg, whose country has shown strong support for the Paris agreement and had expressed disappointment over the U.S. decision to leave the deal.

Oil Trades at Three-Year High After U.S. Stockpiles Drop Again
Ben Sharples and Grant Smith, Bloomberg

Oil traded at the highest level in three years amid the longest stretch of declines in U.S. crude stockpiles during winter in a decade.

Oil and Natural Gas

Trump energy team draws blowback on Florida drilling exemption
Ben Lefebvre and Anthony Adragna, Politico

Interior Secretary Ryan Zinke’s abrupt decision to remove Florida’s coastal waters from the offshore drilling plan he issued a week ago sparked a backlash Wednesday, failing to mollify Florida’s congressional delegation, galvanizing opposition in other states and even angering Trump administration allies in the energy industry.

2018 will be the year oil markets become balanced, UAE oil minister says
Holly Ellyatt and Hadley Gamble, CNBC

Oil markets still have not completely balanced supply against demand yet but 2018 will be the year when they achieve this, United Arab Emirates’ (UAE) energy and industry minister said Thursday.

BP CEO on new offshore drilling: Meh
Amy Harder, Axios

BP CEO Bob Dudley showed a muted appetite for pursuing drilling in new areas off America’s coasts in an exclusive interview with Axios this week.

Utilities and Infrastructure

N.Y. Among 18 States Urging Probe of Utility Rates After Tax Cut
Jim Polson, Bloomberg

Eighteen states from New York to California are pressing the nation’s top energy regulator to ensure utilities pass on hundreds of millions of dollars of tax savings to customers.

New San Onofre deal reached between utilities, consumer groups
Jeff McDonald, San Diego Union-Tribune

Three-plus years after state regulators permitted Southern California Edison and San Diego Gas & Electric to start charging consumers billions of dollars for the failure of the San Onofre nuclear plant, utility executives and consumer advocates appear to have settled a long-running dispute over premature closure costs.

Renewables

Trump to receive solar tariff plan this week — sources
Zack Colman, E&E News

President Trump is expected to be presented with a formal recommendation to slap trade penalties on imported solar panels by Friday, according to multiple industry sources.

Nevada solar industry collapses after state lets power company raise fees
Dan Hernandez, The Guardian

There are 36 solar panels sitting in a row behind Richard Stewart’s home in north Las Vegas. The panels cost about $40,000 – most of his savings, he said.

Solar companies ask new S.C. Energy Caucus to lift cap on residential solar
Andrew Brown, Post and Courier

Solar companies see opportunity while the S.C. Legislature continues to wrestle with the cancellation of two unfinished nuclear reactors at V.C. Summer station in Fairfield County.

Coal

Mine closing wipes out many of Trump’s coal job gains
Chris Isidore, CNN

Despite many promises from President Trump that he would bring back coal jobs, the industry has only added 500 jobs, or a 1% increase, during his first year in office. And now a coal mine near the Pennsylvania-West Virginia border is due to close, costing 370 of those jobs.

Nuclear

California regulators to decide fate of state’s last nuclear plant Thursday
David R. Baker, San Francisco Chronicle

A plan to close California’s last atomic power plant, Diablo Canyon, in seven years could win the approval of state regulators Thursday, despite the efforts of pro-nuclear activists to save it. The California Public Utilities Commission is expected to decide Thursday whether to shut down the plant when its two federal operating licenses expire in 2024 and 2025.

Climate

Of 21 Winter Olympic Cities, Many May Soon Be Too Warm to Host the Games
Kendra Pierre-louis and Nadja Popovich, The New York Times

Distill the upcoming Winter Olympics in Pyeongchang, South Korea, to their essence and you get 15 sports that involve gliding on snow or ice. Because of climate change, though, by 2050 many prior Winter Games locations may be too warm to ever host the Games again.

More Female Sea Turtles Born as Temperatures Rise
Karen Weintraub, The New York Times

Male sea turtles are disappearing from Australia’s Great Barrier Reef. A new study of gender ratios found that 99 percent of immature green turtles born in the northern part of the reef are female.

Opinions, Editorials and Perspectives

Energy Policy Should Focus on Climate
The Editorial Board, Bloomberg

Good sense on energy hasn’t fled Washington entirely. The Federal Energy Regulatory Commission has struck down the Trump administration’s bewildering proposal to subsidize coal-fired power for its “resilience” in the event of big storms or natural disasters.

Excluding Florida from a new offshore drilling plan sure looks partisan
The Editorial Board, The Washington Post

Cynicism has always been a part of politics, but rarely are politicians so brazen and self-serving as President Trump and his interior secretary, Ryan Zinke, have been over the past week.

Drilling in Alaska Is Good for the Earth
Thomas Landstreet, The Wall Street Journal

It has been a good month for American energy development.

‘Drill, baby, drill’ is back in Trump era
Myron Ebell, The Hill

The Department of the Interior on Jan. 4 released the draft of an Outer Continental Shelf oil and natural gas leasing plan that would dramatically reverse the current plan put in place by the Obama administration.

The U.S. Transport Sector Has Become Less Energy Efficient: Should We Care?
Philippe Benoit, Center for Strategic and International Studies

The results are in, and the U.S. transport sector is bucking the trends. While the United States is becoming more energy efficient across its economy, including in manufacturing and services, one sector is moving in the other direction: the transport sector. As reported in a recent study of the International Energy Agency (IEA) analyzing and comparing the data from various industrialized countries, the U.S. transport sector has become less energy efficient over the last 15 years.

California proves Trump wrong
Bridget Huber, The Washington Post

Trump says climate policies kill jobs. California’s oil country proves the opposite.

Where’s the proof climate change causes the polar vortex?
Merrill Matthews, The Hill

t’s been really cold recently, especially in the Northeast, and you know what that means: Liberals, the media and even a fair number of scientists feel compelled to reassert that the excessive cold is “the result of global warming,” not a refutation of it.

Research Reports

China 2017 Review: World’s Second-Biggest Economy Continues to Drive Global Trends in Energy Investment
Institute for Energy Economics and Financial Analysis

China continued to be a global leader of investment in clean energy projects in 2017, defying an overall slowdown in Chinese overseas investment as the country further positioned itself to dominate in new energy technologies such as batteries and electric vehicles.

EIA forecasts mostly flat crude oil prices and increasing production in 2018 and 2019
Energy Information Administration

In both 2018 and 2019, EIA expects total global production to be slightly greater than global consumption, with U.S. production increasing faster than production in any other country, contributing to modest inventory builds.

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