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Over the course of his campaign and first weeks in office, President Donald Trump has outlined an America-first energy policy that appears to mean essentially one thing: More U.S. oil production. (OK, sure, there are caveats. Trump said he wants to bring coal mining back, and famously wore a coal miner’s helmet. And, like his predecessor, he has exclaimed his fealty to an “all-of-the-above” energy policy.)
But the policies he has focused on are decidedly aimed at boosting oil production: green-lighting more drilling on federal lands, building more oil pipelines, and rolling back rules that harm the oil industry. (The first CRA to get signed repeals an SEC provision on oil payments. See below.)
But America first doesn’t necessarily mean — or always mean — a focus on American oil. That’s a point we keep hearing from everyone from solar developers to ethanol producers.
Here’s one more perspective:
The Fuel Freedom Foundation aims to both boost the American economy and cut its dependence on OPEC by expanding the available fuels available for automobiles. Yossie Hollander, the technology entrepreneur who founded the group, argues for “ending our oil addiction” and boosting the use of a wide variety of alternatives: EVs, methanol, ethanol, fuel cells, biodiesel and other liquid fuels. This would dampen the price of oil, give consumers a jolt and cut imports from the Middle East, he argues.
Today, Fuel Freedom is releasing a tool that shows forecasts for light-duty vehicle growth and electric-vehicle penetration worldwide. The online tool allows users to plug in their own estimates and see how it affects the long-term forecasts.
Hollander says the goal is clear:
“Fuel Freedom believes in the data. Data should drive policy and not the other way around. Before our tool, you could hear statements like EVs will replace oil by 2030 or EVs don’t matter at all. There were many partial researches, but none that looked at the entire world of the light-duty vehicle market. This model provides a realistic view of where the market is heading over the next 35 years.
What their data shows is that EV sales will grow, but so will overall auto sales, driven by growth in the developing world. So EVs won’t be putting the internal combustion engine out of business — at least not before 2050. The result?
“We have to move as fast as possible in all areas. We cannot risk gambling on one solution,” Hollander concludes.
When he describes it, it all sounds possible — and promising. Of course, the technical details need to get worked out. As with all changes to the fuel supply, there’s a chicken-and-egg problem. (Who is going to pay to install methanol-blend pumps before there are methanol-blend vehicles?)
Also, members of the group have said EPA needs to allow for modifications of engines so that higher blends of methanol or ethanol could work efficiently. And the future of the Co-Optimization program at the Department of Energy, which is a collaboration with industry on boosting the efficiency of engines and fuels, is at risk under the Trump administration.
Who knows. Change is hard, and we could easily imagine automakers, oil producers and RFS defenders lining up to shoot this down. But the market and technology dictate that some kind of change is coming. Could it be this one?
Check out the link to the tool here.
Goodbye Obama-Era Regulations
That was the not-so-subtle headline from House Speaker Paul Ryan as President Trump signed his first CRA resolution. For a president focused on U.S. manufacturing jobs and boosting American coal, the choice of a first target was not an obvious one. The measure blocks an SEC regulation requiring oil, gas and mining companies to disclose their payments to foreign governments. It’s meant to stop corruption.
“This is the first of many Congressional Review Act bills to be signed into law by President Trump. H.J. Res. 41 repeals regulations that would have put American oil and natural gas companies at a disadvantage on the world stage, and actually could have threatened the safety of American workers abroad,” Ryan said in a statement.
The Other Shoe That Hasn’t Dropped
What is this, the Obama administration?
Donald Trump promised a different approach on climate change, but so far the machinery of government continues churn away. There were two new examples of this yesterday.
EPA issued its annual draft inventory of greenhouse-gas emissions, a report showing that overall emissions are down 12 percent since 2005 and those from the electricity sector are down 21 percent since that same year. (For those keeping track at home, that means the power sector was a mere 43 MMT’s or 2.2 percent away from the Clean Power Plan target for 2022. That’s, errr, not a lot.)
Separately, NOAA is set to release its monthly global climate update on Thursday. As part of the briefing, experts will discuss “the recent extreme precipitation and drought relief in Western parts of the U.S.”
Oh, and What’s This?
When the D.C. Circuit hears arguments this Friday pitting two foreign chemical manufacturers against the EPA, the Trump administration will actually be defending an Obama-era rule. The regulation blocks some uses of hydrofluorocarbons to cool cars and houses because of their high global warming potential.
It doesn’t hurt that the EPA rule is being supported by two U.S. chemical makers — Chemours Co. and Honeywell International Inc. And it doesn’t hurt that the challengers are foreign companies that stand to get an edge if they can keep churning out old refrigerants with huge warming potential for the U.S. market. But, it also might show that not every regulation is going out the window.
Democrats’ request for delay not-withstanding, Senate Republicans are confident they can push Donald Trump’s EPA nominee through this week, before next week’s recess.
Scott Pruitt is next in line after the Senate votes on the nomination of Mick Mulvaney to lead the White House budget office. That could put a vote on Pruitt on tap for Friday afternoon. With lawmakers itching to get out of town, Democrats may not insist on dragging things out that long.
Carbon Tax Foes
Just a few weeks ago they were helping guide the Trump transition, but now Myron Ebell and Tom Pyle are back on the outside and they appear unsettled by what they are hearing from the White House. Today the American Energy Association is sending a letter to Gary Cohn, Trump’s top economic adviser, to ask for a chance to talk about the problems with a carbon tax. Cohn met with James Baker and other GOP proponents of a carbon tax last week.
“A carbon tax would also be regressive – doing the most harm to our nation’s
economically disadvantaged – and would destroy American jobs, particularly in the manufacturing sector,” they wrote.
Quote of the Day
“It is unfair to ask American taxpayers to subsidize risky loans,” House Science Chairman Lamar Smith will say at the hearing on the Department of Energy loan guarantee program today. “Though its loan guarantees have a suspect past, DOE has an exemplary track record in basic research.”
“As we reauthorize the Department of Energy’s research and development programs, we should prioritize the basic and early-stage research that cannot be accomplished by the private sector,” he concluded.
- Smith said yesterday he’s seeking an investigation into career employees use of an encrypted messaging app. In a letter to EPA’s IG, he said, the employees are acting “covertly” so they can “avoid federal records requirements.”
- FERC Acting Chairman Cheryl LaFleur told Catherine Traywick she’s developing a process that will allow the agency to move quickly on time-sensitive energy project approvals as soon as the commission gains a third commissioner.
- Higher oil prices following OPEC cuts will help U.S. production grow by 500,000 barrels a day this year, spurring the need for new pipelines, Daniel Yergin of IHS Energy says.
- National Rural Electric Cooperative Association hired Scott Peterson as its senior vice president of communications.
- Colorado’s AG sued Boulder over its oil and gas ban, the Denver Biz Journal reports.
- The Congressional Research Service dug into how the Trump administration could pull out of the Paris and Iran accords. Short answer: It can. Read it here.
- And, the Atlanta Zoo has named a hissing cockroach after Tom Brady.
Chart of the Day
Methane emissions fell in 2015, tracking a fall in drilling and mining that year. Tabulating those emissions has been politically fraught, as API has complained about a change in methodology from the EPA last year. The drop in emissions this year was seized on by the oil-industry group:
“While we are still reviewing the just released EPA draft GHG inventory, it appears that industry emissions continue to decline,” Howard Feldman, the group’s director of regulation, said in a statement. “Additional regs such as the BLM venting and flaring rule are costly, unnecessary, and redundant.”
The Daily Don’t Miss
The Energy Department loan guarantee program that made Solyndra a household name hasn’t made many friends in the Republican-controlled Congress. Now, with the Trump administration in power, those Republicans want to make sure they are doing something about it.
The House Science Committee today is holding a hearing as part of an effort to figure out how to put restrictions on the program, which still has $25 billion left for use, Ari Natter reports.
The hearing, “Risky Business: The DOE Loan Guarantee Program,” is set to include testimony from Chris Edwards, the Cato Institute’s director of tax policy, who will tell the committee that spending on applied energy technologies should be left to the private sector.
“The U.S. energy sector, including conventional and renewable energy, is large, dynamic, and entrepreneurial,” according to his written testimony. “It does not need federal subsidies to thrive.”
Dan Reicher, Google’s former director of climate change and energy initiatives, will defend the program.
“The U.S. government has long played a vital and successful role in helping to commercialize energy technology and it is a role that should continue,” Reicher says in his written testimony.
Of course, this isn’t the first time Congress has considered action on the loan program. The House is 2012 passed legislation its backers said would phase out the program, but in actuality would have allowed tens of billions of dollars in pending loan guarantee applications for nuclear and fossil energy projects to continue.
The hearing is at 10 a.m. in 2318 Rayburn.
Tweet of the Day
@jeneps (Jennifer Epstein) After bill signing Trump turned to Ryan and asked about Obamacare repeal bill. “It’s going to be very soon, right?” Ryan: “Yes.”
There’s one stock that has had quite the run since election day: Northern Dynasty Minerals. The company behind the Pebble Mine project was seen as a big winner, and likely to get approval for its project to mine for gold and copper in Alaska.
But, as this chart shows, the fun hit a bit of a snag yesterday as Kerrisdale Capital published a report saying the project faces intractable opposition from environmentalists, Alaska Natives and commercial fishermen. “All the enthusiasm is misplaced,” Kerrisdale says, laying out a series of reasons the project is doomed. It also cited information from its “sources” about the poor economics for the project.
That said, any advice from Kerrisdale ought to be considered along with this disclaimer: “Kerrisdale Capital Management, LLC and its affiliates have short positions in and own option interests on the stock of Northern Dynasty Minerals Ltd….The Authors stand to realize gains in the event that the price of the stock decreases.”
Outside the Beltway
California Dam Crisis Leaves Power Market Short of Big Hydro
As state officials rush to repair an emergency spillway for the Oroville dam — just 150 miles north of San Francisco — an 819-megawatt hydropower plant, capable of supplying about 600,000 homes with electricity, remains shut there until authorities judge it is safe to come back online. That’s the equivalent of two natural gas-fired power plants that will need to kick into gear elsewhere. The boost in gas demand resulting from their shutdown would come just as California’s supplies of the power-plant fuel are constrained. The Aliso Canyon gas storage field outside of Los Angeles has been closed since a massive leak in late 2015.
Coal’s Trouble Under Trump Seen in Navajo Plant’s Uncertain Fate
The biggest coal-fired power plant in the U.S. West may shut later this decade amid competition from cheap natural gas. The four utility owners of the 2,250-megawatt plant — led by operator Salt River Project, which owns a 43 percent stake — are willing to keep the plant running through 2019 if they can reach a lease agreement with the Navajo Nation in Arizona, where the plant is located, the owners said. Failing that, they may shut the plant down this year.
All Eyes on Scana for Fallout From Toshiba’s Nuclear Troubles
Now that Toshiba Corp. has disclosed a $6.3 billion writedown related to its struggling U.S. nuclear program, Wall Street’s attention is turning to Scana Corp. Scana slid the most in three months on Tuesday after Toshiba said it may sell Westinghouse Electric Co. — the atomic unit building plants in Georgia for Southern Co. and South Carolina for Scana. The utility owner said it’ll address any impact from Toshiba’s woes when it reports earnings on Thursday.