Photographer: Patrick T. Fallon/Bloomberg

Clinton finds nothing inconvenient in climate plug

October 12, 2016 Mark Drajem

Today’s Agenda

Ohio will today send an important signal about what the future of electricity generation looks like in the U.S. First Energy’s bid to get a bailout, which was initially aimed at saving its aging coal and nuclear plants, is set to get a vote at the Public Utility Commission today.

We visited First Energy’s troubled coal plant in August and sat through hours of PUC testimony. What surprised us the most? The company said keeping its headquarters in Akron is worth $568 million to Ohio. What the PUC decides about that plea will be one of the big parts of how this deal works out for First Energy, for its competitors and for Ohio’s ratepayers.

Pipelines

These competing facts are both true: Pipeline regulation is tightening; activists hate pipelines. Consider:

Activists broke into pipeline facilities in Clearbrook, Minnesota, and said they were able to shut the flow of oil coming from Canada into the U.S. The disruption appears to have been quickly addressed, although details are sketchy. Bill McKibben praised the action. The oil industry was not impressed.

“Criminal trespassing, destruction of property, and the creation of potentially unsafe conditions, are not proper forms of protests,” AFPM President Chet Thompson said. “Eco-terrorists will not win support from consumers or policymakers by disrupting fuel supplies and driving up the costs of products that Americans depend on every day.” Seems right.

Meanwhile, PHMSA ordered the expansion of the use of safety devices, known as excess flow valves, which are used reduce gas-related explosions. A rule had mandated use for single-family homes; it now will be required for multi-family homes or small business, Rebecca Kernreported.

PHMSA is also planning “higher penalties across the board” for violation of federal pipeline standards, according to a notice scheduled for publication in the Federal Register today. The increased fines, which carry a maximum penalty of $2 million for pipeline violations, are intended to “apply stronger deterrence and drive down incident risk,” the pipeline regulatory agency said.

Taking Al Gore’s Advice

That shiver energy lobbyists felt at 3:54 p.m. yesterday wasn’t a mirage. “I can’t wait to have Al Gore advising me,” Hillary Clinton said at a rally in Miami. “Climate change needs to be a voting issue,” she said. “The clean-energy superpower of the 21st century is probably going to be Germany, China or us, and I want it to be us.”

In his talk, Al Gore pinned Hurricane Matthew on climate change, saying the warming ocean allowed the tropical storm to be spun up into a hurricane extremely quickly. “This is not normal. It is becoming the new normal,” Gore said. “Please take it from me,” he concluded. “Every single vote counts.”

The White House view

In his glitzy talk with Leonardo DiCaprio on the South Lawn last week, President Obama outlined his key tactical approach to addressing climate change: “better is good.” He added: “Better is not always enough; better is not always ideal…But if we get enough better, each year we’re doing something that’s making more progress.”

White House climate adviser Brian Deese explained what that meant in a thorough discussion on the administration’s efforts. Even “second best” policy approaches can be well worth it, he said, in an allusion to the administration’s failed bid to pass cap-and-trade legislation.

“When you look at the modeling under an economy-wide carbon price, the vast majority of initial reductions come from the power sector…(Under the Clean Power Plan) much of the initial emissions reductions we achieve will closely mirror the initial emission reductions under an economy-wide approach.

“And in a political environment where the prospects of a de novo national carbon pricing mechanism passing Congress are remote, optimizing the market based approaches across sectors will increasingly be the best case solution for policy makers.”

Deese concludes that U.S. emissions are falling, and that’s not entirely the result of market forces:

“Shifting from coal to natural gas is part of the picture. But the story is increasingly a result of policy,” he said at Columbia yesterday.

Hmmm, so much for all those allies of Obama arguing that coal’s woes are just the result of cheap natural gas prices.

Editor’s note

Today, we’re thrilled to welcome Ari Natter to the First Word Energy fold. Ari will be a reporter, primarily focused on Capitol Hill. He joins us after seven plus years of breaking news (and avoiding arrest — ask him about the apology he got from the Capitol police) for Bloomberg BNA. Before that he covered Washington for the Journal of Commerce and worked at a number of newspapers in Maryland. He’s a graduate of American University, and spends his free time chasing his two- and four-year-old children around his house — and mourning the loss of Jackie’s in Silver Spring. Send your hot tips to anatter5@bloomberg.net or follow him on Twitter at @arinatter.

Also Today

  • ICAO’s airplane climate deal is premised on the idea that aircraft emissions will be accomplished through offsets, David Hodgkinson writes. As a result, the deal is far weaker than it needs to be, he said.
  • Public Citizen filed a complaint at FERC against Exelon’s application to purchase Entergy’s FitzPatrick nuclear facility in upstate New York. Exelon is trying to purchase FitzPatrick only for the financial value of New York’s zero-emission credits, it says.
  • Sens. Lisa Murkowski and Dan Sullivan resigned from leadership posts in the state GOP, after coming out in opposition to Donald Trump.
  • Tomorrow is “Oilfield Prayer Day” in Oklahoma: Christians should use it to “thank God for the blessings created by the oil and natural gas industry and to seek His wisdom and ask for protection,” Gov. Mary Fallin said in a proclamation.
  • Ken Bone, the undecided voter and Internet sensation, was able to reveal that Donald Trump knows more about energy than Hillary Clinton, Ellen Wald wrote in Forbes. Bone, who works at a coal plant, told Jimmy Kimmel: “I think I’m more undecided than I was before … I try to really base most of my decisions on positive things, and neither of them have given me many.”
  • Insurers, utilities and weather desks at commodities markets are increasingly interested in the environmental information that NOAA collects, said Kathryn Sullivan, the head of the agency.
  • Take that, boat owners fretting about ethanol’s risks to their engines: The Renewable Fuels Association is now a co-title sponsor of the Crappie Masters Tournament Trail. It’s an “effort to educate boaters, conservation enthusiasts and consumers about ethanol’s benefits and its use in boats and other marine applications.,” the group said.

Lobbying

Chevron hired lobbying firm Mehlman Castagnetti Rosen & Thomas to lobby on environmental and tax issues.

According to a lobbying disclosure report, the oil and gas company is seeking help on issues related to the Clean Air Act, production on federal lands, renewable fuel standards and economic sanctions. The firm will also lobby on tax reform “affecting the oil and gas industry.”

The bipartisan firm includes David Castagnetti, who served as chief of staff to former Senate Finance Committee Chairman Max Baucus, and Republican strategist Sage Eastman, a former Ways and Means Committee staffer.

Tweet of the Day

Daniel Cohan
@cohan_ds
Daniel Cohan Retweeted Josh Barro

For #climate policy, much of Clinton’s plan was designed to not need Congress. Democratic Congress could expand the possibilities.

@JoshBarro It may be time to start reading those Hillary Clinton policy plans we previously assumed could never get through Congress.

Chart of the Day

Natural gas futures slid yesterday, but year to date it has been quite a bull market for the fuel. Prices earlier rose to $3.30 mmBtu, their highest since Jan. 15, 2015.

Quote of the Day

“While we disagree with Katie’s position on fracking, Katie will be a superior senator and champion for a healthy and just world than her opponent,” Friends of the Earth said in endorsing Katie McGinty for Senate in Pennsylvania.

Outside the Beltway

Phillips 66 Partners Buys $1.3 Billion in Logistics Assets
The deal includes 30 crude, refined products and natural gas liquids assets, the Houston-based company said in a statement Tuesday. The partnership plans to fund the acquisition with a combination of debt and $196 million in new units issued to Phillips 66.

Tesla Softens Capital-Raise Language in SolarCity Filing
Tesla Motors Inc., working to merge with SolarCity Corp., said in a filing that it “may” raise funds, which is a step back from late August when the company said it was “planning” to go to capital markets for more cash. The change in language came in a regulatory filing, affirming what Tesla Chief Executive Officer Elon Musk said over the weekend when he tweeted that neither the electric-car maker nor the solar-panel company would raise money in the fourth quarter and probably not in the first three months of 2017.

Battery Cost Plunge Seen Changing Automakers Most in 100 Years
Plunging battery costs will drive the auto industry’s biggest change in more than a century, enabling a boom by 2030 in technologies from self-driving electric cars to ride-sharing applications. The price of lithium-ion battery packs for electric cars has fallen 65 percent since 2010 and is likely to keep declining, according to a report by Bloomberg New Energy Finance and McKinsey & Co. Consumers may appreciate the biggest impact in the form of cheaper costs for taxis, including substantial reductions for ones run by machines.

Up for Debate

By Sara Chieffo

Ten appellate judges. Sixteen attorneys. Seventy appellate briefs, appendices, supplements and corrections. Seven hours of oral arguments.

The Clean Power Plan had its first big day in court. And what a day it was.

The Clean Power Plan stands on a strong legal foundation and is consistent with the law, earlier court precedents and other EPA programs. This commonsense plan is widely supported by the public and a broad coalition is lining up on EPA’s side—ranging from 18 states and 60 municipalities, to technology companies such as Google to faith communities, to national security experts such as Madeleine Albright.

While court decisions are notoriously difficult to predict, even some supporting the legal challenge had to acknowledge that EPA had a good day.

In particular, a core element of the challengers’ arguments—that the plan is problematic because it would transform the energy sector without a directive from Congress—was met with doubt from the dais, particularly regarding the plan’s transformative nature. Judge Thomas Griffith, who was appointed by President George W. Bush, noted that a shift from coal to renewable energy is already underway, saying, “They’re just accelerating that.”

Judge Griffith couldn’t be more right — the clean energy transformation is already underway. In fact, last year NV Energy signed a contract for 100MW of solar at 3.87 cents per kilowatt hour—that was called the “cheapest electricity in the U.S.” Soon after Austin Energy signed onto a similar solar project at under 4 cents per kilowatt hour. Declining prices of renewables and storage technology, and cheaper financing for clean-energy projects mean this trend will continue.

Furthermore, states are already cutting carbon pollution. As it happens, 21 of the 27 states that are challenging the plan are on-track to meet their interim Clean Power Plan goals, given their existing generation, already-planned investments and implementation of existing state policies.

This clean-energy transformation is good news as climate change continues to put communities at risk of more frequent and intense extreme weather events, for which taxpayers are stuck footing the bill. Between 2005 and 2015, the government spent $67.7 billion in response to major disasters. Severe storms are the most common cause of disaster declarations.

The global momentum and market forces for climate solutions are simply undeniable. The Paris Climate Agreement is entering into force at record speed. The world is shifting away from fossil fuels, and, in the U.S., the Clean Power Plan is a critical part of our way forward.

(Sara Chieffo is the legislative director for the League of Conservation Voters.)