Photographer: Luke Sharrett/Bloomberg

#ExxonKnew Morphs Into ‘What Does Exxon Know?

January 10, 2017

The First Word Energy team draws on Bloomberg’s worldwide resources to cover all aspects of energy policy. Learn how Bloomberg Government can help your energy lobbying or policy analysis—contact Peter Hsu at yhsu24@bloomberg.net or 202-416-3035.

For climate activists, not every dart is going to hit the bulls eye.

Fresh from raising such a ruckus that they boxed President Obama into a corner over the Keystone XL pipeline, Bill McKibben and others seized on the reporting about Exxon Mobil’s research into climate change. #ExxonKnew replaced #KXL as the hashtag of choice; activists cheered as state attorneys general announced (with Al Gore present!) that they would be delving into the company’s research — and suppression of said research — into climate change.

But with Exxon CEO Rex Tillerson set to face a grilling over his secretary of state nomination tomorrow, #ExxonKnew has quietly faded. The reason is three-fold:

1. Activists overreached. Inside Climate News reporting about Exxon’s research and its funding of climate-denial groups was solid, despite the beating it took from the company and its allies. But efforts to try and link every weather disaster to Exxon, and Exxon alone, were preposterous. A mud slide in California, #thanksExxon; hurricane-related flooding, #thanksExxon. The only reasonable response to this is a sigh and an eye roll.

2. Exxon’s position in the 1990s is different than its position since 2008. Lee Raymond, Exxon’s CEO from 1995 until 2005, attacked the science of climate change, according to Steve Coll. But when Tillerson came in, and President Obama took office, the company shifted gears. Tillerson acknowledged that climate change was real and the company supported a carbon tax.

3. In a strange twist, Tillerson, long the head of the world’s biggest privately run oil company, is the only one of Donald Trump’s picks for cabinet who explicitly recognizes that man-made climate change is happening. Sen. Ben Cardin, for example, called it “encouraging” that Tillerson told him he supports the Paris climate accord.

“It’s notable that the rest of the presidential nominees are to the right of the CEO of Exxon Mobil on climate,” David Goldston of the Natural Resources Defense Council said last week.

As the New York Times concluded:

Mr. Tillerson faces potential confirmation difficulties because of his business activities around the globe and his close dealings with President Vladimir V. Putin of Russia. But his acceptance of the reality of climate change and his ostensible support for a carbon tax and the Paris climate agreement have weighed in his favor, and stand in contrast with the positions of other cabinet nominees who share Mr. Trump’s view that climate change is a hoax.

Look for climate change to come up in Tillerson’s hearing, but not #ExxonKnew. Instead, Democrats will be asking how he squares his moderate views with Trump and the rest of Trump’s advisers. The question is likely to be: What does Exxon know that Donald Trump doesn’t?

The Rest of the Story

If you want to check out the other side of the Tillerson argument, the Huffington Post reports that Exxon kept paying millions of dollars to climate deniers after publicly breaking with the Competitive Enterprise Institute and related groups.

Bloomberg BNA’s Alan Kovski: Wealth of Options Awaiting Oil and Gas Lobbyists

Obama’s Climate Argument

Strip out the footnotes and the self congratulation, and President Obama’s article in the journal Science yesterday includes one argument for his successor: The Paris climate accord aligns with your broader agenda.

“The Paris Agreement itself is based on a nationally determined structure whereby each country sets and updates its own commitments. Regardless of U.S. domestic policies, it would undermine our economic interests to walk away from the opportunity to hold countries representing two-thirds of global emissions—including China, India, Mexico, European Union members, and others—accountable.

“This should not be a partisan issue. It is good business and good economics to lead a technological revolution and define market trends.”

In other words, if Donald Trump wants to be tough on China and Mexico, he shouldn’t ditch the deal. It’s not an easy argument, but it could carry the day.

Other Nominee News

Southern Co., one of the largest investor-owned electric utilities in the U.S., is set to have a powerful friend in the Justice Department if the Senate confirms Republican Senator Jeff Sessions to be attorney general, Jennifer Dlouhy reports.

The $47.8 billion electric utility has a long history with Sessions and is his single biggest corporate contributor, according to financial disclosures filed with the federal government and analyzed by the not-for-profit Center for Responsive Politics. Southern political action committees and employees have funneled $174,765 to Sessions’ political campaigns since the Alabama native entered the Senate in 1997.

“The ties between Sessions and Southern Co. run as deep as the darkest coal mine,” said Jamie Henn, a co-founder of the climate activist group 350.org. “There’s never been such a strident advocate for the fossil fuel industry nominated for the role of attorney general.”

Also today

  • The Office of Government Ethics released the letter from Scott Pruitt in which he pledged to resign from the Southern Baptist Theological Seminary and Windows Ministry Inc. if confirmed as EPA administrator.
  • Trump adviser Kellyanne Conway canceled her visit to Canada’s oil sands.
  • Sen. Joe Manchin said Trump pledged to “help fight to secure a permanent health care solution for our retired miners.”
  • Mike Pence and his family officially moved to Washington, along with cats Pickle and Oreo and their bunny Marlon Bundo.

Chart of the Day

Annual coal production last year fell to its lowest level since The Blues Brothers had their debut on Saturday Night Live. U.S. mine production was down more than a third from the peak in 2008 with about 743 million short tons produced, according to EIA data released yesterday.

What does it mean? As our chart last week showed, ending the Clean Power Plan could stabilize the use of coal for power production, but that doesn’t mean the industry is bouncing back. Flat production would still mean the industry is kept well below the heyday of 2008.

Indian Point

New York Governor Andrew Cuomo has won his years-long battle to force a nuclear power plant to shut. His greatest weapon? The shale boom.

Entergy Corp. said Monday that cheap natural gas flowing out of the Marcellus shale formation in the eastern U.S. had depressed power prices to the point where it forecast that its Indian Point facility, located just north of New York City, would start losing money. While Cuomo had been a vocal opponent of the plant, citing safety concerns, Entergy said economic factors are behind the company’s decision to close the plant in 2021.

But is this a good thing for the environment? The pro-nuclear advocacy group Environmental Progress said that because of the plant’s closure New York will become more dependent on fossil fuels than it has been since 2000. “Power sector carbon emissions will skyrocket 29 percent, from 31 to 40 million metric tons,” it said. “Indian point produces four times more power than all of New York’s wind, and 236 times more power than all of New York’s solar.”

Quote of the Day

“This really does say that in the Northeast, it is very difficult to make money running a nuclear plant as unregulated generation,” Kit Konolige, a senior analyst for Bloomberg Intelligence in New York, said of the Indian Point decision.

Inside the Beltway

The broad energy bill collapsed last year, but that doesn’t mean all energy legislation is dead. Two Democrats are set to have their minor technology bills headed to the House floor for a suspension vote today.

H.R. 306, by California Democrat Anna Eshoo, would direct federal agencies to expand their use of energy-efficient information technology and data centers, and H.R. 338, by Illinois Democrat Bobby Rush would direct the Energy Department to prioritize education and training for jobs in the energy and manufacturing sectors and create a clearinghouse for information and guidance related to workforce development.

House Action

Reg reform is back on the House agenda later this week, with the consideration of H.R. 5, a legislative package combining a series of bills passed by the House in the 114th Congress.

But first they have amendments to deal with. Among the Democrat amendment made in order by the Rules Committee last night include a measure exempting from the legislation any rules made under the Toxic Substances Control Act bill that passed last Congress.

Other amendments include one that would exempt rules related to miners health and safety. Similar Democrat amendments, such as one exempting rules related to preventing lead poisoning in water, were not adopted during House votes last week.

U.S., Mexico Sign Agreement on Electric Reliability
Energy secretaries from the U.S. and Mexico signed a bilateral agreement to ensure the continued reliability of the interconnected electricity grid between the two countries, the Energy Department announced today.

Energy Department is Not Done Yet
Equipment for alternative fuel vehicles may be eligible for the Energy Department’s loan guarantee program, the agency said in a blog post. “As deployment of these vehicles expands, there is also a growing need for the infrastructure to support these vehicles,” the DOE said.

NuScale to Submit Small-Modular Nuclear Reactor to NRC Thursday
NuScale Power plans to submit its design certification application for a first-of-a-kind small modular reactor at the Nuclear Regulatory Commission on Thursday, Rebecca Kern reports. NuScale says its 50-megawatt, small modular light-water reactor technology will be quicker to build and potentially less costly than traditional large scale nuclear reactors on the market today.

Outside the Beltway

Climate Disasters Cost U.S. $46 Billion as Flooding Leads List
Climate-based disasters caused $46 billion in damage and killed at least 138 in the 48 contiguous U.S. states last year, with inland flooding emerging as the costliest weather event for the first time since 1997, Brian K. Sullivan reports.

The number of billion-dollar occurrences was the second-highest since 1980, with one less than the 16 in 2011, according to the National Centers for Environmental Information. It was also the second warmest year behind 2012 over 122 years, and the 20th consecutive warmer-than-normal year.

Southern Buys Texas Wind Farm That Will Sell Power to Google
Southern Co. agreed to buy a 276-megawatt wind farm in Texas from Invenergy LLC.
The Bethel Wind Energy Center in Castro County is expected to be completed this month and will sell most of its output to Alphabet Inc.’s Google Energy under a long-term contract, according to a statement Monday from Atlanta-based Southern.

Energy Transfer Falls After Announcing Private Offering Plan
Energy Transfer Equity LP fell the most in five weeks after announcing plans for a $580 million private placement that it plans to use to pay down debt at a related entity.
The pipeline giant fell as much as 5.7 percent, the most since Dec. 1, after issuing a statement early Monday saying it’s agreed with “certain accredited investors” to a placement of 32 million common units representing limited partner interests. It plans to use the net proceeds to buy about 15.8 million newly issued common units in Energy Transfer Partners LP, the Dallas-based company said.

Reluctant Activist Sees Heart of Shale Being Ripe for Deals
After years of calling for it privately, Barnes Hauptfuhrer decided that early 2017 was finally time to go public with his desire to see a makeover of America’s hottest natural gas play.

On Tuesday, the 62-year-old sent a 10-page open letter to the board of EQT Corp., urging the gas explorer to merge with either Range Resources Corp. or Antero Resources Corp. That prompted Range to put out a statement saying it hadn’t been contacted by EQT about a potential deal and that it had no plans to hold talks.

×
NEXT
Our prognosticators look ahead to 2017 and see hope