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.
Tim Kaine is no Bernie Sanders, and his positions on energy issues illustrate that point. While Hillary Clinton’s running mate supports policies to address climate change, he’s also been supportive of his home state’s coal industry, offshore drilling in the Atlantic and of LNG exports. He teamed up with Wyoming Republican John Barrasso to sponsor a bill that would require the Department of Energy to decide on an LNG export application within 45 days.On offshore drilling, Kaine campaigned for the Senate criticizing Interior’s earlier decision to leave Virginia out of its five-year drilling plan and promising to pursue legislation to allow that production. In March, after Interior dropped offshore Atlantic drilling from its next five-year plan, Kaine offered this response:
I have long believed that the moratorium on offshore drilling, based on a cost-benefit calculation performed decades ago, should be re-examined. Today’s announcement by theBureau of Ocean Energy Management suggests that they have grappled with this question and concluded that the risks of such production outweigh potential gains.
I am particularly struck by the material objections of the Department of Defense to the incompatibility of drilling with naval operations off Virginia’s coast…The DOD has been relatively quiet during this public debate and has never shared their objections with me before. I look forward to additional discussions with DOD to understand its position.
If Clinton wins this fall, her administration won’t reverse course and allow drilling in the Atlantic, Rob Barnett of Bloomberg Intelligence writes today. Still, Kaine may push for legislation to provide financial incentives to help coal-heavy states transition from coal, Barnett says.
Dodging the activists
While anti-fracking activists marched through Philadelphia yesterday, the Interior Department moved to silence their dissent. BOEM announced Friday it would move its auctions for offshore drilling rights into cyberspace — and out of the Superdome. That means Uncle Sam will save not only on rent, but security, too, as environmental activists become unable to swarm the typically twice-annual sessions, Jennifer Dlouhy reports.
BOEM announced the change as it released final details for its Aug. 24 sale of tracts in the western Gulf of Mexico. Agency officials said the decision was natural — mirroring what it already does for offshore wind leases. But recent protests also were a factor; the last sale, on March 23, had roughly 150 activists chanting “Keep it in the ground” sometimes inches away from regulators trying to read out the bids.
Similar actions have targeted BLM lease sales, and it is also looking at doing online auctions. FERC closed the doors to one of its recent meetings after a series of protests.
Under the new approach, the ocean energy bureau will open sealed bids the same as before — just without a nearby audience of oil executives and journalists. The whole thing will be streamed at www.boem.gov. And agency representatives say there’s still plenty of opportunity for people to get involved; 18 public meetings were held in the run-up to next months’ auction.
Powering Coal Down
Donald Trump’s pledge to save coal came too late for First Energy, which announced plans Friday to shutter or sell two coal plants not far from the site of the GOP convention. Together the units at Bay Shore and W.H. Sammis provided just 4% of the electricity the company produced, but their closure show how much pressure is being put on coal plants.
First Energy worked with BP to install a first of its kind fluidized-bed combustion boiler on the Bay Shore plant in 2000, which is just a blink of the eye in a coal plant’s lifetime, and the older Sammis units had $1.8 billion of pollution control equipment installed in 2010. Of course, this isn’t the end of the story for First Energy and its troubled coal plants: The company is still trying to get Ohio regulators to offer a bailout for other of its aging coal units.
Democrats in Philly
Democrats are meeting this week, and Mark Drajem will be there today to discuss climate change with an all-star list of participants at the Bloomberg HQ in Philadelphia. We’ll be asking Pete Ogden from the Clinton campaign and Michael Brune from the Sierra Club what they think the future for nuclear power should be, and we want to hear why Gene Karpinski is taking on Sen.Rob Portman.
Also, in our Week Ahead today we look at how Clinton’s policies on energy and the environment compare and contrast with what Obama has done.
Congress’ To-Do List — Beyond Energy
Democrats Ditch Energy Independence
Here’s something to keep in mind as Democrats make fighting climate change a top item on their agenda this week in Philadelphia. For the past two decades, the party has emphasized energy independence by boosting production oil and natural gas, and pushing for carbon-capture technology. This year the term “energy independence” is gone from the Democratic platform, as well as any discussion of boosting fossil-fuel production or “clean coal.”
Laura Curtis’ review of platforms going back to 1992 shows that Democrats have consistently backed acting on global warming — but also boosting domestic oil/gas production. Now, with the fracking revolution turning that rhetorical flourish of independence into a practical reality, Democrats have largely moved on. “The best science tells us that without ambitious, immediate action across our economy to cut carbon pollution and other greenhouse gases, all of these impacts will be far worse in the future,” the 2016 platform, set for approval today, says.
The party repeated calls to propose eliminating tax breaks and subsidies for fossil fuel companies while boosting tax incentives for energy efficiency and clean energy. There’s also no mention of clean coal. There’s no “all of the above” that was the anchor in 2012.
How much have things changed? When Bill Clinton ran for president in 1992, he ran on a platform of providing incentives for oil and natural gas production in the U.S.
Now Clinton wants to rule areas such as offshore in the Arctic and Atlantic off limits to drilling.
And Democrats had talked of producing energy in the U.S. as one that had national security implications in the past. This year the party is moving away from that, too, instead highlighting the security and economic threats from climate change. “Americans deserve the jobs and security that come from becoming the clean energy superpower of the 21st century,” the platform says.
“Groups continue to advance a ‘Keep It In the Ground’ agenda that, if adopted, would force our country to surrender the enormous domestic benefits and clear, global competitive advantages that increased energy development here at home have made possible,” Karen Harbert of the U.S. Chamber of Commerce said in response to the anti-fracking rally yesterday.
Hillary Clinton has a lot to do on energy policy if she’s elected president, but much of it encompasses defending and extending the measures left over from the Obama administration.
A Clinton administration would have as its top priorities defending the Clean Power Plan in court, extending methane rules to include existing equipment and finishing a comprehensive study of the federal coal-leasing rules. Each of those were started under President Barack Obama, and are seen by environmental groups as offering the best initial chance at achieving cuts in carbon emissions.
“Clinton’s first thing is to defend a lot of the efforts the Obama administration undertook,” Sarah Ladislaw, director of the energy and natural security program at the Center for Strategic and International Studies, said in an interview. “Defending a lot of these will be a hard slog.”
Clinton, who is set to nominated as the Democrats presidential candidate this week, heads a party that has shifted remarkably on energy. Jettisoned from the campaign paeans to “all of the above” energy sources or trying to achieve energy independence. Instead, the party’s platform calls for boosting the deployment of wind and solar power and cutting “carbon pollution.”
In addition to following through on Obama’s plans, Clinton proposed holding a climate competition so that states could get market-based incentives to exceed the reductions laid out in the Clean Power Plan and a Solar X-Prize, which would award communities that make it easier to install solar panels. She wants a seven-fold increase in solar capacity by 2020.
Beyond the regulations Clinton would have to defend or finish, there are two major questions for energy if she is elected as president:
- First, would EPA set carbon rules for refineries, cement plants and other factories? Under a consent decree with environmental groups, the agency agreed to do the same kind of regulations (111b and d) it has for power plants for refineries. So far nothing has been proposed, and doing so would unleash a backlash from the powerful American Petroleum Institute. But it could also prod oil companies into lobbying Congress to impose a carbon tax in exchange for foreclosing that option.
- And that’s the second question: Would Clinton try and be able to bring about energy legislation with Congress? ClearView Energy’s Kevin Book says it’s more likely that a Trump administration would accept a carbon tax as part of a broader tax deal, largely because that kind of tax reform isn’t likely with Clinton in office. Still, there are other issues — boosting efficiency, bailing out nuclear plants, boosting pipeline and electricity infrastructure — that could gain bipartisan support.
Separately, if the Clean Power Plan is pared back or tossed out in court, “Clinton may be forced to make a deal with Congress,” Book said. What happens with Congress, depends on “what Congress looks like after November, and what they think they learned from this election cycle,” Ladislaw said.
Also Worth Watching
- RFS Repeal: Conservative policy experts will make the case for repealing the Renewable Fuel Standard at a Heritage Foundation event today. Daniel Simmons of the Institute for Energy Research, Marlo Lewis of the Competitive Enterprise Institute and Nicolas Loris of Heritage will discuss the matter at 2:30 p.m. in room 215 of the Senate Visitors Center.
- Energy Independence: Looking forward to 2050, New America examines the steps the U.S., Mexico and Canada must take to ensure that North America become the world’s leading energy power. Mexico’s former Under Secretary of Energy, Hector Moreira will speak. That’s noon Tuesday at 740 15th St. NW.
Send us your comments, tips and recommendations for hoagies in Philly: Mark Drajem is the editor (email@example.com or @drajem), Catherine Traywick (firstname.lastname@example.org or @ctraywick) and Laura Curtis (email@example.com or @LouKCurtis) cover Congress and regulation.Bloomberg Government subscribers can get this and any of our eight other newsletters in their inbox every morning. Click here to modify your subscriptions. Contact Peter Hsu at 202-416-3035 or firstname.lastname@example.org for more information or if you have colleagues that would also value access.
Oil, Gas and Coal
Oil Trades Near Two-Month Low as Rig Gains Add to Glut Concerns Futures were little changed in New York after slipping 3.8 percent last week. Rigs targeting oil in the U.S. rose by 14 to 371 for the longest run of gains since August, Baker Hughes Inc. said Friday. Money managers added the most bets in a year on falling West Texas Intermediate prices during the week ended July 19, according to Commodity Futures Trading Commission data.