From: Morning Consult
To: Scott Jenkins,
Subject: Morning Consult Energy: IRS Guidance Eases Wind PTC Requirements; Kinder Morgan Consolidates in $71 Billion Deal
Date: Mon Aug 11 12:55:46 MDT 2014
Body:

 

By Emily Holden (@emilyhholden)

 

 

Today’s Washington Brief:

  • The Internal Revenue Service released long-awaited guidance Friday on the renewable energy production tax credit (PTC) and energy investment tax credit (ITC). The guidance relaxes the threshold for wind power projects to qualify for the PTC, Wall Street Journal's Tedd Mann reports

  • The EPA's carbon emissions proposal might not be a boon for nuclear power after all, E&E's Jean Chemnick reports

  • SNL's Esther Whieldon interviewed FERC Chairman Cheryl LaFleur on her short-term priorities
     

Today’s Business Brief:

 

Today's Chart Review: 

 

Poll: Voters Expect Grid Attack but Hope for Best

from Morning Consult by Emily Holden 

 

 

 

 

Mark Your Calendars (All Times Eastern): 

 

Tuesday: USEA talk on electric industry managing accelerated market and technological change @ 10 am 

 

 

NEWS ARTICLES

1-12: General
13-17: Oil
18: Natural Gas
19-21: Utilities and Infrastructure
22: Nuclear 
23-27: Renewables

 

 

OPINIONS, EDITORIALS, PERSPECTIVES


28: Inside Climate News 
29: Houston Chronicle 
30: Forbes 

31: The Hill 

32: Poughkeepsie Journal 

 

RESEARCH REPORTS, ISSUE BRIEFS, CASE STUDIES

 
33: Nature 

 


NEWS ARTICLES

 

General

 

1) Kinder Morgan to Consolidate Empire

from Wall Street Journal by Alison Sider and Russell Gold

 

Kinder Morgan Inc. is consolidating its vast oil-and-gas pipeline empire into a single company in a $44 billion deal amid investor worries about the enterprises' growth prospects. The reorganized company will abandon the financial structure it helped popularize in the late 1990s: the master limited partnership. These complex tax-oriented offerings have caught on among energy companies facing substantial investments in infrastructure because of the U.S. oil and gas boom. But Kinder now is so big that the MLP structure is limiting, said Richard Kinder, the companies' founder and chief executive. Combining all four of its publicly traded units into one corporation, he said in an interview, "will allow us to further expand the reach of the kind of projects we can do."

 

2) FERC chair reveals plans for short term at the helm, staying above political fray

from SNL by Esther Whieldon 

 

FERC will spend the next nine months or so focusing on capacity markets, natural gas-electric coordination and energy markets more broadly, including how they may need to adapt to proposed environmental regulations, Chairman Cheryl LaFleur said in an Aug. 7 interview. LaFleur, in her first interview as chairman, acknowledged that roughly nine months is not a lot of time considering the pace at which FERC moves. "FERC does not operate in brief time frames — we put things out for comment, we take comment, we refine — but nine months is long enough to really put focus on things and move these various balls down the field," she said.

 

3) In U.S. Energy Boom, Alaska Is Unlikely Loser

from Wall Street Journal by Cassandra Sweet and Jim Carlton 

 

The energy boom sweeping North America is producing an unexpected loser: Alaska. The state, which staked most of its economy on energy in the 1970s after oil was found on the North Slope, is now competing with, and often losing out to, places with hotter oil fields—especially North Dakota. More people left Alaska than settled in the state between 2012 and 2013, while North Dakota added residents, according to state and federal census data. North Dakota surpassed Alaska two years ago as the nation's second-largest oil producer, behind Texas. Because its oil output continues to dwindle, Alaska has now dropped to fourth place, after California, according to the U.S. Energy Information Administration. State officials are now grappling with ways to regain its pride of place.

 

4) Poll: Voters Expect Grid Attack but Hope for Best

from Morning Consult by Emily Holden 

 

Public interest groups and think tanks have for years been sounding the alarm on critical cybersecurity weaknesses that could bring the U.S. electric grid to a grinding halt. Awareness of grid security has crept into the American subconscious as people have seen more and more news reports that read like spy novels—Russian and Chinese hackers with quirky names like “Energetic Bear” and “UglyGorilla” launching malware attacks and gathering sensitive information that could be used in cyber warfare to shut down electric lines or power plants. According to a Morning Consult poll, 75 percent of voters think there’s at least a 50-50 chance that the energy industry will be the target of a major cyber attack within the next few years. But most think the situation is being handled. Almost half—49 percent—think the sector is “somewhat prepared,” and another 10 percent say it is “very prepared.” On the other hand, nearly a third—31 percent—say the industry is “not too prepared” and another 10 percent say it isn’t prepared at all.

 

5) McCarthy Memo on September Agenda Omits Ex-Im Bank

from National Journal by Billy House 

 

House Majority Leader Kevin McCarthy does not make any mention of Congress extending the controversial Export-Import Bank's charter in a memo Friday to House Republicans titled "Initial September outlook."

Rather, McCarthy focuses on three other items which, he says, members might "wish to factor into your district events" over this summer recess—including a package that deals with the Keystone XL pipeline and other energy matters. McCarthy does write that he plans to provide more details of the House's September agenda later this month—and the list of three items in his memo Friday certainly does not appear to be a complete rundown of what the House will do. For example, Speaker John Boehner has already said the House will take up a continuing resolution when it gets back to keep government funded beyond the Oct. 1 start of the new fiscal year. But McCarthy's omission of the Ex-Im Bank is sure to add to the speculation over whether he plans to stick to his claim in June that he intends to let its charter expire this fall.

 

6) Obama Action Group Joins Fight Against Christie's Climate Pact Exit

from Inside Climate News by John H. Chusman Jr. 

 

Environmental activists who have been campaigning for three years to get New Jersey to rejoin a regional cap-and-trade system have a potent new ally: Organizing for Action, President Obama’s grassroots lobbying operation. OFA's role in the New Jersey fight showed up as the state held a hearing on Friday on its controversial exit three years ago from the Regional Greenhouse Gas Initiative, or RGGI, a carbon trading pact. The hearing was called after a state judge ruled earlier this year that Gov. Chris Christie’s unilateral withdrawal had violated the rules of due process. On Friday, members of the New Jersey arm of Obama's lobbying army were busy rounding up participants to attend the hearing and delivering testimony. They were also working the cause on Twitter hand in hand with other advocacy groups urging Christie to reverse himself on the issue.

 

7) EPA Chief: Teach Global Warming in Schools

from National Journal by Ben Geman and Clare Foran 

 

Environmental Protection Agency Administrator Gina McCarthy wants schools to include climate science in their curricula. Irish America magazine scored an interview with McCarthy, who grew up in a Boston area family with Irish roots. In one question, she was asked whether climate change should be part of the educational system. "Very much so," she replied. "I think part of the challenge of explaining climate change is that it requires a level of science and a level of forward thinking and you've got to teach that to kids.

 

8) China, Brazil Seek Publicity Blitz to Steer Climate Talks

12) U.S. Stock-Index Futures Climb as Ukraine Tension Eases

from Bloomberg by Inyoung Hwang

U.S. stock-index futures rose, after the Standard & Poor’s 500 Index posted its biggest gain in five months, amid optimism that tension between Russia and Ukraine will ease, while U.S. jets struck at Islamic State forces. Futures on the S&P 500 (SPX) expiring in September gained 0.4 percent to 1,931.7 at 11:41 a.m. in London. U.S. stocks advanced on Aug. 8, erasing earlier losses, after a report that Russian war planes had finished military exercises near Ukraine’s border. Dow Jones Industrial Average contracts climbed 57 points, or 0.4 percent, to 16,536 today.


Oil

 

13) Keystone XL could mean more carbon emissions than estimated, study says

from Los Angeles Times by Neela Banerjee

 

Building the Keystone XL pipeline could lead to as much as four times more greenhouse gas emissions than the State Department has estimated for the controversial project, according to a new study published in Nature Climate Change that relies on different calculations about oil consumption.  Emissions of heat-trapping carbon dioxide became central to the Obama administration’s review of a federal permit for Keystone XL, after the president announced in June 2013 that he would let the project proceed only if “it does not significantly exacerbate the problem of carbon pollution.” The study’s authors based their calculation on the premise that increased supplies of petroleum through the pipeline would push down global oil prices marginally, and that would lead to an increase in consumption and thus pollution.

 

14) North Dakota Considers Requiring Treatment of Bakken Crude

from Wall Street Journal by Chester Dawson

 

North Dakota officials are considering requiring energy companies to treat the crude they pump from the Bakken Shale to make it less volatile before it is loaded onto trains. The North Dakota Industrial Commission plans to hold a public hearing in the coming weeks on possible steps to reduce volatility at a well site before oil is stored or transported, said a spokeswoman for North Dakota Gov. Jack Dalrymple. The commission, the state's chief energy regulator, is considering issuing new standards for treating crude as well as monitoring requirements, she said.

 

15) U.S. gasoline prices continue to fall- Lundberg survey

from Reuters by Luciana Lopez 

 

The average price of a gallon of gasoline in the United States fell by six cents in the past two weeks as crude prices have continued a broad decline, according to the Lundberg survey released on Sunday.

Prices fell to an average of $3.52 per gallon for regular grade gasoline, according to the survey conducted Aug. 8. That extends a decline in prices to seven weeks, survey publisher Trilby Lundberg said.

 

16) Putin Praises Exxon Alliance as Arctic Drilling Starts

from Bloomberg by Eduard Gismatullin, Ilya Arkhipov and Stephen Bierman

 

President Vladimir Putin lauded Russia’s “old and reliable partner” Exxon Mobil Corp. (XOM) as he gave the command for the U.S. energy company and ally OAO Rosneft (ROSN) to begin drilling a $700 million Arctic Ocean oil well. Putin, Rosneft Chief Executive officer Igor Sechin and Exxon’s Russia head Glenn Waller, undeterred by the crisis in U.S.-Russian relations, together welcomed the start of the country’s northernmost well. It’s the first step in a quest for new energy resources to help maintain oil production near a post-Soviet high of more than 10 million barrels a day.

 

17) Oil Companies Evacuate Staff From Iraqi Kurdistan

from Wall Street Journal by Sarah Kent 

 

Oil companies have begun evacuating staff and suspending operations at some fields in Iraqi Kurdistan as the U.S. begins airstrikes intended to halt the advance of Sunni extremists toward the region's capital Erbil.

 


Natural Gas

 

18) Stalled Gazprom Antitrust Case May Suggest Unease for Energy Sanctions

from New York Times by James Kanter 

 

Even as Russia and the West keep raising the stakes in their economic sanctions battle, the one commodity that could matter most — Russian natural gas — seems still to be off limits. And that is all the more notable because long before Ukraine erupted as a geopolitical crisis, the European Union was aggressively pressing an antitrust case against the Russian state-controlled gas giant, Gazprom. If Europe has grounds to punish Moscow economically, the Gazprom antitrust case might seem to be a prime opportunity. Gazprom is suspected of inflating prices and imposing unfair restrictions on gas distribution within Europe, which is heavily reliant on Russian natural gas. As recently as last winter, Russia and the European Union’s competition commissioner, Joaquín Almunia, seemed on the verge of settling. But now the case appears to be languishing. 



 

Utilities and Infrastructure

 

19) New 2011 blackout settlement for $12M

from U-T San Diego by Morgan Lee

 

The customer-owned electric utility serving the Imperial Valley will pay a $12 million civil penalty for failure contributing to a regional power outage on Sept. 8, 2011. The Imperial Irrigation District will pay $3 million to the U.S. Treasury and invest an additional $9 million in reliability enhancements to the local electrical grid that go beyond meeting basic standards, under the settlement agreement announced Thursday by the Federal Energy Regulatory Commission. Federal regulators found failures in the day-ahead and real-time contingency plans of the Imperial Irrigation District. The utility also agreed to submit to further compliance monitoring.


20) Utilities struggle to control appetites in energy-hungry marijuana industry

from E&E by David Ferris

 

Kurt Nielsen is on a strange assignment, especially for a public employee. As the manager of the Lighting Design Lab, which is a spinoff of Seattle's power company, he has been tasked with finding energy-efficient lights for the growing of marijuana. Most of the country's legal cannabis farming, in Washington and Colorado, is happening indoors and under scorching-hot lights. Washington state has issued licenses for the cultivation of 1.2 million square feet of cannabis "canopy," as it's called, since voters approved its production and sale for recreational purposes two years ago. But neither state has given much thought to where the energy will come from. Nielsen has been looking for a while now and declared that the efficiency quest is "a wild goose hunt."

 

21) Despite utility buy, biodigester growth lags in Michigan

from Midwest Energy News by Andy Balaskovitz 

 

Late last month, Michigan’s largest investor-owned utility announced long-term agreements to purchase renewable energy from anaerobic digesters on four farms across the state. While the agreements will equal a collective 2.6 megawatts of renewable capacity, biogas experts and advocates say the announcement is not indicative of a burgeoning industry here. Indeed, since Michigan’s first digester launched in 2006, only six are in operation today, according to the state.

 

 

Nuclear

 

22) EPA rule not such a boon for nuclear after all -- utilities

from E&E by Jean Chemnick

 

U.S. EPA's greenhouse gas proposal for existing power plants doesn't do enough to boost nuclear energy, advocates for the industry say. Two months after EPA unveiled the proposal -- and just over two months before the end of the public comment period -- companies that have invested billions of dollars in the United States' primary source of zero-carbon baseload energy say they are still reviewing the draft. But while the industry has yet to reach a consensus position, some utilities say they are discouraged by the way the June 2 proposal treats new nuclear projects that are coming online or attempts to help existing facilities overcome the economic factors that threaten them with retirement. The agency has proposed tougher state carbon intensity targets for states that host nuclear in the hopes of encouraging them to provide incentives for the industry, but some advocates say it hasn't rewarded states for past nuclear investment.

 

 

Renewables

 

23) IRS Relaxes Renewable Energy Project Tax Credit Rule

from Wall Street Journal by Ted Mann 

 

The Internal Revenue Service lowered a threshold for renewable-energy projects to qualify for federal tax credits, potentially providing a boon to developers and investors in the wind-power industry who had been uncertain how heavily they could rely on them for financing. In guidance released Friday, the IRS and the Treasury Department said renewable-energy projects could qualify for a pair of tax credits if they had incurred at least 3% of the total project cost before the beginning of 2014, down from the previous threshold of 5%. Credits would be proportionally reduced in value below the 5% threshold, the IRS said.

 

24) Rules prevent solar panels in many states with abundant sunlight

from Los Angeles Times by Evan Halper

 

Few places in the country are so warm and bright as Mary Wilkerson's property on the beach near St. Petersburg, Fla., a city once noted in the Guinness Book of World Records for a 768-day stretch of sunny days. But while Florida advertises itself as the Sunshine State, power company executives and regulators have worked successfully to keep most Floridians from using that sunshine to generate their own power.

Wilkerson discovered the paradox when she set out to harness sunlight into electricity for the vintage cottages she rents out at Indian Rocks Beach. She would have had an easier time installing solar panels, she found, if she had put the homes on a flatbed and transported them to chilly Massachusetts.

 

25) China Adds Australia-Sized Solar Capacity in Energy Push

from Bloomberg

 

China, the world’s biggest carbon emitter, accelerated solar power installations in the first half, adding enough capacity in the period to equal Australia’s entire supply of power from sunlight at the end of last year.

China added 3.3 gigawatts of solar capacity in the six months ended June 30, double last year’s additions, the National Energy Administration said today in a statement. 

 

26) Wyoming board gives key OK for Carbon County wind farm

from Star-Tribune by Benjamin Storrow 

 

The largest proposed onshore wind farm in the United States cleared a key regulatory hurdle after state regulators voted unanimously to approve the nearly $5 billion project.  The Industrial Siting Council voted 7-0 to approve Power Company of Wyoming's proposal to build up to 1,000 turbines in Carbon County. The council is responsible for permitting large-scale industrial projects in Wyoming. 

 

27) Australia's renewable energy industry grinds to a halt

from Sydney Morning Herald by Peter Hannam 

 

Australia’s investment in renewable energy all but dried up in the first half of 2014 amid uncertainty fuelled by the government’s latest review of the mandatory target, according to Bloomberg New Energy Finance. In the six months to June, just $40 million was invested in large-scale renewable energy, such as wind farms, the lowest level since the first half of 2001, according to Kobad Bhavnagri, head of BNEF's Australian unit. The investment tally compared with $2.691 billion in 2013, the second largest annual inflow of funds to the clean energy sector behind the peak year of 2010.

 

 

OPINIONS, EDITORIALS, PERSPECTIVES

 

28) Colorado's Frack-Free Movement Sacrificed for Democrats Facing Re-election

from Inside Climate News by Zahra Hiriji 

 

Backed by a wall of suited supporters, Democratic Gov. John Hickenlooper proudly announced Monday that it was game-over for two popular anti-fracking state ballot initiatives. Among the supporters was Pete Maysmith, executive director of the green group Conservation Colorado. But notably absent from the Denver press conference, however, was the rest of the green scene—members of the state's dozens of environmental grassroots groups. Many had helped collect far more than the 86,105 signatures required to get the two fracking measures on the ballot by the Aug. 4 deadline. On Monday, they waited in their homes and offices to hear the good news—that the signatures numbering more than 250,000 combined–had officially been submitted. Instead, they heard that their long fight was suddenly over.  For many, it was a slap in the face. 

 

29) The oil drill

from Houston Chronicle 

 

Oil and gas engineers often have to cut through miles of solid rock to reach their goal, but the promise of fossil fuels can drive politicians to break through even harder barriers. In both Mexico and Colorado this past week, seemingly intractable political disputes about oil and gas reached impressive resolutions through healthy debate and compromise. It is a reminder that energy politics isn't a wedge issue - it is a drill, which can penetrate political boundaries.

 

30) Kinder Morgan Eats Its Own; Will Other MLPs Follow Its Lead?

from Forbes by Loren Steffy 

 

The law of large numbers finally caught up with Kinder Morgan KMI +2.12%. The company said it plans to combine its disparate partnerships into a single company that will enable the biggest pipeline company in North America to continue growing. The deal, for $44 billion in cash and stock and the assumption of $27 billion in debt, will be the biggest energy industry merger since Exxon bought Mobil in 1999, according to Bloomberg. Houston-based Kinder Morgan operates the largest pipeline and storage network in the U.S., with 80,000 miles of pipelines and 180 storage facilities.

 

31) FERC's energy scheme must be dismantled

from Poughkeepsie Journal 

 

In the long-running fight against the nonsensical, detrimental strategy that has caused electric rates to rise in the area, critics should concede one — and just one — point. There are other options to dealing with the energy-supply issue that should have been pursued much earlier. Yet that concession in no way absolves the Federal Energy Regulatory Commission of its abhorrent decision to create a "new capacity zone," causing electric rates to spike in hopes of luring more power plant construction in the area, mostly to fill New York City's needs.

 

32) The silent transportation revolution

from The Hill by former Sen. Pete Domenici, R-N.M., Kathryn Clay and Raymond L. Orbach

 

While electric vehicles have captured news headlines, a second revolution has been quietly gaining traction in the U.S. transportation sector. Over the last five years, more than $450 million of private sector capital has been invested in natural gas fueling infrastructure. In fact, a technological breakthrough has enabled the development of both fuel storage enhancements and lighter stronger tanks that promise to increase range, reduce vehicle weight, and lower vehicle cost. Add historically-low natural gas prices to the mix, and these developments now position vehicles powered from natural gas to gain great market share within the transportation sector.

 

RESEARCH REPORTS, ISSUE BRIEFS, CASE STUDIES

 

33) Impact of the Keystone XL pipeline on global oil markets and greenhouse gas emissions

from Nature

 

Climate policy and analysis often focus on energy production and consumption, but seldom consider how energy transportation infrastructure shapes energy systems. US President Obama has recently brought these issues to the fore, stating that he would only approve the Keystone XL pipeline, connecting Canadian oil sands with US refineries and ports, if it ‘does not significantly exacerbate the problem of carbon pollution. Here, we apply a simple model to understand the implications of the pipeline for greenhouse gas emissions as a function of any resulting increase in oil sands production. We find that for every barrel of increased production, global oil consumption would increase 0.6 barrels owing to the incremental decrease in global oil prices. As a result, and depending on the extent to which the pipeline leads to greater oil sands production, the net annual impact of Keystone XL could range from virtually none to 110 million tons CO2 equivalent annually. This spread is four times wider than found by the US State Department (1–27 million tons CO2e), who did not account for global oil market effects. The approach used here, common in lifecycle analysis, could also be applied to other pending fossil fuel extraction and supply infrastructure.