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 firstname.lastname@example.org or 202-416-3035.
Al Gore. Just those two words alone are enough to send a shiver up the spine of any self-respecting climate skeptic. After Gore’s movie “An Inconvenient Truth” came out in 2006, Myron Ebell’s group, the Competitive Enterprise Institute, went through it and determined that “nearly every ‘fact’ was either misleading, exaggerated or wrong.” In a PBS documentary, Ebell, who is now directing the Trump transition at the EPA, said of the former vice president: “He wants to be a superhero action figure.”
For those worried about the fate of Earth, Rex Tillerson, Exxon Mobil’s CEO, plays the counter role. Activists say #ExxonKnew about the dangers of climate change and chose to bury it, and they are now pushing state and federal regulators to investigate the company. Exxon is so busy digging up all the world’s fossil resources, they don’t see the destruction they are causing, activists say.
You know where we are going with this: Donald Trump has invited the yin and the yang of the energy world to Trump Tower for meetings. In what can only be described as jaw dropping, Gore was there yesterday for a meeting. It was said to be with Ivanka Trump, but Gore said he spent the bulk of his time with the president elect. Tillerson, who is said to be on the list as a possible secretary of state, is scheduled to meet with Trump today.
What does it all mean? We’ll hazard three possibilities:
- Despite the presence of Ebell, Tom Pyle and other skeptics of man-made climate change on Trump’s team, oil and coal interests can’t rest easy in assuming his policies will reflect their views. Well, they might, but the apprehension has to be that with one tweet the entire suite of energy views could be upended. There’s no chance Trump would reverse course and welcome the Clean Power Plan, but the Paris deal could stay.
- Despite the presence of Ebell, Tom Pyle and other opponents of a carbon tax on Trump’s team, don’t be so quick to rule it out. Gore and Tillerson don’t agree on much, but one thing they do agree on is that a carbon tax is the best way to deal with climate change. Sure, it seems like the longest of shots now, but when congressional negotiators decide they need a few billion dollars to cut some other taxes, this may look like an easy way to round up some Democratic support.
- Despite repeatedly pledging to bring back coal jobs, look for Trump to take API’s line on carbon reduction: The free market is boosting natural gas, which can cut emissions. That’s such a simple argument to make.
All that being said, if you were counting on the next administration “digging coal,” ditching Paris and putting a red “approved” on every federal lease application, what is your one bit of hope today? The conventional wisdom is that Trump pays attention to the last person he has spoken with, and so Tillerson’s meeting today could trump Gore’s meeting yesterday.
The Obama administration’s dramatic rejection of the Dakota Access pipeline Sunday got a lot of headlines, but we count three ways it can all come to naught:
1. Energy Transfer filed for summary judgment to get a federal court to approve their application and give the project the go-ahead.
2. The Trump camp says it supports the project, and it has wide leeway to reconsider the application.
3. Congress could take measures into its own hands and push legislation deeming the review complete.
Our money is on #2. There’s a draft easement that the staff at the Corps has prepared, Rep. Kevin Cramer said: “I don’t think it will be” more complicated than just granting the easement, he said.
But that may not be the end. Determined opposition could use this latest move by the Obama administration as a reason to go back to court. And that could get some traction. Read the full story here.
Cramer Back in the Hunt for Energy Job
Last we heard from him, Rep. Kevin Cramer said he could best serve Donald Trump by staying in Congress. But, after he met with Trump yesterday, Cramer sounded like he could be persuaded that Energy Secretary could fit him. He says he gave Trump ideas about
restructuring the department and prioritizing certain aspects of R&D.
“I did say to him my great contribution to you will be I will greatly reduce the average net worth of the Cabinet, so you can go ahead and appoint another billionaire or two,” Cramer told reporters. “I’ve got your back.”
Energy Bill Update
House Natural Resources Chairman Rob Bishop says lawmakers are working on a legislative package that would be non-controversial enough that it could pass via suspension. That change gives negotiators extra time to work on a package of items with the Senate. A recent version of the legislation, but not the latest one, was obtained by Ari Natter. It doesn’t include either the LNG export provision or the repeal of standards for federal buildings that would phaseout fossil fuel use. A copy is here.
So, will it happen? “I’m still hopeful,” Bishop said, pausing for a moment. “Okay, I’m not that hopeful.”
Chart of the Day
Each year the EIA releases its long-term forecast for coal, and for each of the past 10 years that forecast has been adjusted down, according to this chart compiled by the Sierra Club. Back in 2007 it was projecting 2% annual growth in coal demand; this year it sees growth absolutely flat, 0%. Bruce Nilles, director of the Beyond Coal Campaign, tweeted that it expects next year will be the first the agency, which is known for its bullish fossil fuel reference case, to go negative. Time will tell….
Roger Pielke says he was slimed by the Center for American Progress over his scientific skepticism of a link between climate change and catastrophic weather:
“More troubling is the degree to which journalists and other academics joined the campaign against me. What sort of responsibility do scientists and the media have to defend the ability to share research, on any subject, that might be inconvenient to political interests—even our own?
“I believe climate change is real and that human emissions of greenhouse gases risk justifying action, including a carbon tax. But my research led me to a conclusion that many climate campaigners find unacceptable: There is scant evidence to indicate that hurricanes, floods, tornadoes or drought have become more frequent or intense in the U.S. or globally. In fact we are in an era of good fortune when it comes to extreme weather. This is a topic I’ve studied and published on as much as anyone over two decades. My conclusion might be wrong, but I think I’ve earned the right to share this research without risk to my career.”
Tweet of the Day
Quote of the Day
“It was a sincere search for areas of common ground,” former Vice President Al Gore said while leaving Trump Tower in New York. “I had a meeting beforehand with Ivanka Trump. The bulk of the time was with the president-elect, Donald Trump. I found it an extremely interesting conversation, and — to be continued.”
“I’m encouraged we will restore law and order next month when we get a president who will not thumb his nose at the rule of law,” North Dakota Rep. Kevin Cramer said in a statement. “I feel badly for the Corps of Engineers because of the diligent work it did on this project, only to have their Commander-in-Chief throw them under the bus.”
Outside the Beltway
Oil Market Turns Upside Down as U.S. Shale Hedges Post-OPEC
U.S. shale oil companies are using the post-OPEC rally to hedge their oil price risk for next year and 2018 above $50 a barrel, bankers, merchants and brokers said, pushing the forward oil curve upside down. The rush to hedge — locking in future cash flows and sales prices — could translate into higher U.S. oil production next year, offsetting the first output cut by the Organization of Petroleum Exporting Countries in eight years. As such, the producer group could end up throwing a life-line to a sector it once tried to crush.
Chesapeake to Sell Shale Gas Properties for $450 Million
Chesapeake Energy Corp. agreed to sell a portion of its Haynesville Shale properties in northern Louisiana for about $450 million bringing its total signed or closed divestitures this year to about $2 billion.
New England Grid Says Power Supplies Sufficient for Winter Use
ISO New England says demand to peak at ~21.3GW under normal winter temperatures, grid operator says in report issued Monday. Under extreme winter weather, demand to peak at ~22GW, and 44% of generating capacity in New England comes from natural gas, ISO says.
Texas Haze Plan Remand Formally Requested by EPA
The Environmental Protection Agency formally asked a federal appeals court to halt litigation over a regional haze regulation covering Texas, a development that one attorney described as potentially representing “the first concrete implications” of the 2016 election results on environmental policy, Patrick Ambrosio reported.
The agency, in a motion filed Dec. 2, asked the U.S. Court of Appeals for the Fifth Circuit to remand parts of the regional haze regulation that disapproved of Texas’s own plan for improving visibility in federally protected areas with a federal plan that required about $2 billion in pollution controls to be installed at eight coal-fired power plants in the state.
* Click here for Bloomberg BNA’s Daily Environment Report