Morning Consult Energy: Gas Prices Hit 2-Year High Amid Calls for Trump to Tap SPR

Government Brief

  • Sen. Edward Markey (D-Mass.) called on President Donald Trump to release oil from the Strategic Petroleum Reserve to make up for the fuel shortage stemming from the shutdown of major pipelines and refineries impacted by Tropical Storm Harvey. Markey said an immediate release of oil would protect consumers from recent spikes in gasoline prices. (Washington Examiner)
  • Energy Secretary Rick Perry voiced optimism that Congress will help repair the damage done by Tropical Storm Harvey using federal funds. The former Texas governor said he is monitoring the impact of refinery closures and the rising gas prices that occurred after the storm forced 40 percent of the Gulf Coast’s refining capacity offline. (The Dallas Morning News)
  • The Interior Department’s Office of the Inspector General is closing its investigation into alleged threats made by Interior Secretary Ryan Zinke against Sen. Lisa Murkowski (R-Alaska) after she and Sen. Dan Sullivan (R-Alaska) declined to be interviewed as part of the OIG’s inquiry. Deputy Inspector General Mary Kendall told House Democrats, who requested the inquiry based on reports of heavy-handedness from the Trump administration when Murkoswki did not support an Obamacare repeal bill, that further investigation would not be productive. (The Hill)

Business Brief

  • Gas prices hit a two-year high after almost a quarter of U.S. refining capacity went offline as a result of Tropical Storm Harvey. Crude oil prices dropped due to a slump in demand from refineries. (Reuters)
  • The owners of the Arkema chemical plant in Crosby, Texas, reported two explosions on Thursday after flooding caused by Tropical Storm Harvey overwhelmed the plant’s main power system and two backup generators. The French company had already evacuated employees and ordered the evacuation of nearby residents in anticipation of an explosion since the facility lacked the necessary power to refrigerate its combustible organic compounds. (The New York Times)
  • Xcel Energy and Otter Tail Power announced the completion of the last piece of CapX2020, a major expansion to the power grid in the upper Midwest meant to handle the increased supply of renewable energy. Eight wind projects and a natural gas plant are waiting to connect to the new 70-mile power line that runs between two substations in South Dakota. (The Associated Press)

Chart Review

Events Calendar (All Times Local)

EPA webinar on screening of chemicals in consumer products 11 a.m.
Chartered Clean Air Scientific Advisory Committee review panel of oxides for nitrogen, sulfur 1 p.m.
No scheduled events

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Democrat Ed Markey presses Trump to head off fuel shortages
John Siciliano, Washington Examiner

Democratic Sen. Ed Markey warned President Trump on Wednesday about coming gasoline shortages in the Northeast in the wake of Hurricane Harvey, while pressing him to open the nation’s strategic oil reserve in order to avoid shortages and price spikes. The senator explained that gasoline prices are not responding to the price of crude oil, which has gone down, rather than up, in recent days.

Senators’ silence kills probe into Zinke’s alleged Alaska threats
Devin Henry, The Hill

The Interior Department’s Office of Inspector General (OIG) is closing its investigation into Secretary Ryan Zinke’s alleged threats against an Alaska senator during an ObamaCare fight last month after the lawmaker and her in-state colleague refused to participate in the probe. In a letter to a pair of House Democrats who requested the investigation, Interior’s Deputy Inspector General Mary Kendall said her office “does not believe it could meaningfully investigate the matter further” because Alaska Sens. Lisa Murkowski and Dan Sullivan, both Republicans, declined to be interviewed as part of the inquiry.

Harvey Live Updates: Explosions and Black Smoke Reported at Chemical Plant
The New York Times

As water began to recede in some parts of flood-ravaged Houston and as Harvey, now a tropical depression, shifted its wrath to the Beaumont-Port Arthur area of Texas, there were reports early Thursday that a chemical plant at risk of exploding had done just that. There were two explosions at the Arkema plant in Crosby, about 30 miles northeast of downtown Houston, around 2 a.m., the French chemicals company that owns the plant said in a statement.

Oil and Natural Gas

Gasoline spikes, crude slumps as Harvey wreaks havoc on U.S. refiners
Henning Gloystein, Reuters

Gasoline prices hit fresh 2-year highs on Thursday as flooding from tropical storm Harvey knocked out almost a quarter of U.S. refineries, while crude oil prices fell again on the resulting drop in demand. Fearing a gasoline supply squeeze, U.S. gasoline prices rose to a more than 2-year high of $1.935 per gallon early on Thursday.

Energy chief Rick Perry: Brace for higher gas prices, but storm isn’t sign of manmade climate change
Todd Gillman, The Dallas Morning News

Energy Secretary Rick Perry voiced optimism Wednesday that despite the staggering magnitude of storm damage, Congress will come through with the funds needed to help Texas rebuild. With one-fifth of the nation’s refinery capacity idled — and 40 percent of the Gulf Coast capacity — gasoline prices are sure to spike temporarily, especially in the region.

Asia PVC price hits 5-month high on US supply concerns after Harvey
Fumiko Dobashi, Platts

The CFR China PVC price benchmark rose $10/mt week on week to hit a five-month high of $945/mt on Wednesday, fueled by a US supply crunch after Harvey forced the shutdown of a few PVC plants, market sources said Thursday. For monthly PVC negotiations in Asia, market sources said Asian PVC producers would start offering at more than $1,000/mt CFR China for October.

Danish Energy Company Is Turning the Page on Oil and Gas
Sarah Kent, The Wall Street Journal

Dong Energy AS, Denmark’s majority state-owned energy company, is selling off its last oil and natural-gas fields in a deal expected to close this month or next. The billion-dollar-plus sale is part of a broader plan to significantly reduce its exposure to fossil fuels and produce energy primarily from renewable sources.

Utilities and Infrastructure

Utilities finish last piece of CapX2020 power grid expansion
The Associated Press

Xcel Energy and Otter Tail Power say they’ve completed a 70-mile power line in South Dakota that’s the last piece of a major expansion of the upper Midwest power grid called CapX2020. In the announcement Tuesday, the Minnesota-based utilities say eight wind projects and a natural gas power plant are waiting to connect to the line.


‘Clean energy’ petition targets pollution in New Mexico
Susan Montoya Bryan, The Associated Press

The New Mexico Attorney General’s Office and consumer advocates are petitioning state regulators to consider a new energy standard they say would protect utility customers and shareholders from the costs and risks associated with future environmental regulations. The proposed standard calls for electric utilities to reduce carbon dioxide emissions from power plants that serve customers in the state by 4 percent a year through 2040.

Wind and solar power are on track to exceed expectations. Again.
David Roberts, Vox

In fact, two new reports — one on solar, one on wind — make the point vividly. They argue that the radical trends of the last decade are going to continue, which is all that needs to happen for the energy system to tip over from disruption into revolution.


Vice president tells state chamber ‘war on coal is over’
Fred Pace, The Huntington Herald-Dispatch

Vice President Mike Pence came to the West Virginia Chamber of Commerce’s 81st Annual Meeting and Business Summit at The Greenbrier and declared, “The war on coal is over.” Pence said on Wednesday that the president has also called on Congress to fundamentally reform the nation’s tax code for the first time in more than 30 years by passing a historic tax cut.

Echoing DOE Report, Industry Study Touts Coal ‘Resiliency’
Amanda Durish Cook, RTO Insider

A new study prepared for the American Coalition for Clean Coal Electricity (ACCCE) spotlighting the “resiliency” of coal-fired generators echoes the findings of a U.S. Department of Energy report released earlier this month. The study’s release may prove to be an early salvo in the possible “fuel wars” predicted by one former senior FERC official who said that new FERC commissioners could break with agency tradition by each acting as advocates for favored types of resources.

New Potential Toxin Found in Coal Burning Emissions
Robbie Harris, WVTF News

Scientists have discovered a particle, created when coal is burned, that had never before been identified as part of that process. And there’s concern it could also be dangerous to humans.

China plans safety inspections at coal mines, chemical plants
Meng Meng and Josephine Mason, Reuters

China’s cabinet said the government will launch nationwide safety inspections of coal mines, chemical plants, gas operators and logistics firms, starting in September. The new round of inspections comes after an environmental crackdown in August roiled commodities markets, while safety inspections in major coal producing regions have crimped supplies, fuelling a price rally.


Southern Co. decides to press ahead with Vogtle expansion
Kristi E. Swartz and Hannah Northey, E&E News

Southern Co. and other utilities building the Vogtle nuclear expansion project in Georgia are prepared to finish the reactors but will lay out a set of assurances that must be met in a filing with state utility regulators tomorrow, E&E News has learned. This means Plant Vogtle will remain the only set of nuclear reactors under construction in the United States, at least for now.

Santee Cooper fire sale? SC governor in talks with 5 utilities about utility’s future
Avery Wilks and Jamie Self, The State

S.C. Gov. Henry McMaster is negotiating with five Fortune 500 companies about buying some or all of South Carolina’s state-owned utility, The State newspaper has learned. None of those firms want to restart immediately the construction of the two Fairfield County nuclear reactors that Santee Cooper abandoned in July, according to two sources with knowledge of the negotiations.


Katrina. Sandy. Harvey. The debate over climate and hurricanes is getting louder and louder.
Chris Mooney, The Washington Post

Harvey, with its unprecedented rains, has spawned an urgent debate over whether this is what a changing climate looks like. Today, despite recent charges from Environmental Protection Agency spokeswoman Liz Bowman that they are “engaging in attempts to politicize an ongoing tragedy,” many researchers are more willing to simply say that Harvey’s record rains were worse because of our hotter, wetter climate.

Energy hogs: China targets farm waste as a ‘clean’ power source
Hallie Gu and Josephine Mason, Reuters

China will pay farmers to turn animal poo into fertilizer and power, the Ministry of Agriculture said on Wednesday, as Beijing cracks down on agricultural pollution that has for years leaked into rivers and lakes, angering Chinese residents. The agriculture ministry gave no details about the size of the subsidies, but the move could be a big step toward curbing chemical fertilizer use and cutting water pollution.

Opinions, Editorials and Perspectives

Harvey’s Destruction Demonstrates Value of Strategic Petroleum Reserve
Ernest J. Moniz, Morning Consult

The nation’s Strategic Petroleum Reserve, with its supplies of crude oil and gasoline, was created by statute to protect the U.S. economy from “severe energy supply interruption.” This authority, exercised by a presidential declaration, can be used in the event of a disruption of either domestic or imported petroleum products.

Texas Nuke Plant Stays Online Amid Harvey. Give Credit To Resilient Operators, Robust Design And A Plan
Rod Adams, Forbes

Despite the forces of nature and in spite of the opportunistic efforts of professional opponents, a large nuclear power station located in the middle of Hurricane Harvey’s devastation continues to steadily produce 100% of its rated power output.

Beyond Houston, a World Awash
Editorial Board, The New York Times

Houston isn’t the only major city reeling from record rainfall and devastating floods. In Mumbai, India, where summer monsoons are annual events, as much rain fell in 12 hours on Tuesday as normally does over 11 days in a typical monsoon, paralyzing the city, India’s financial capital.

Help Afghans Exploit Their Mineral Riches
Michael Silver, The Wall Street Journal

Afghanistan owns one of the world’s richest untapped deposits of rare-earth and critical metals. The Afghans cannot develop these vast deposits on their own, but if they get U.S. help to do the job right, they will have an opportunity to move from a war-torn nation to a self-sustaining economy.

Research Reports

The Contribution of the Coal Fleet to America’s Electricity Grid
PA Consulting Group Inc.

The U.S. electricity grid is rapidly evolving due to the low-cost supply of natural gas and the increasing penetration of grid-scale and behind-the-meter intermittent renewable generation. As explained in this report, these traditional resources—including coal-fueled generation—provide attributes that will remain critical to the grid as it continues to evolve.