I am excited to announce the official launch of Morning Consult Finance, which will feature the same unmatched coverage of politics, policy and business strategy that hundreds of thousands of readers have come to expect from Morning Consult Health and Morning Consult Energy.
More than 28,000 government and industry executives subscribe to Morning Consult Energy, making it one of the most widely read energy briefings in Washington.
Building on the success of Morning Consult Health and Morning Consult Energy, Morning Consult Finance will also feature will feature morning briefings, weekly polls and features reporting.
Morning Consult Finance will be led by Finance Editor Timothy R. Homan (@timothyrhoman). Timothy has previously worked at The Fiscal Times, Bloomberg News and Congressional Quarterly.
Thank you for your support and interest in the Morning Consult. None of this is possible without our readers. Let us buy you a drink at our next happy hour on June 12th at Capitol Lounge!
Publisher, Morning Consult
By Emily Holden (@emilyhholden)
Today’s Washington Brief:
- The EPA announces its landmark carbon emissions rules at 10:30 a.m. today. Wall Street Journal's Amy Harder reported Sunday that the agency will seek a 30 percent reduction by 2030 from existing power plants based on emissions levels from 2005.
- By bypassing Congress and using his executive powers, President Barack Obama seeks to reclaim international leadership on climate change, New York Times Reports. The new pollution rules will be a cornerstone of the administration's environmental legacy, but they are a political and legal compromise for Obama, and they will provoke a messy fight with states and companies that produce electricity, Associated Press's Dina Cappiello reports.
- The rules complicate tight races for Democrats in coal and oil-rich states, and the White House has turned a blind eye to attacks from within the party, Reuters' Jeff Mason reports. State governments are also divided and wary of the rules, E&E reports. And a recent court decision may jeopardize a tool the states would use to fulfill the proposed requirements, Morning Consult's Emily Holden reports.
- Bloomberg reports the bold action still won't be enough to halt climate change unless the rest of the world follows.
Today’s Business Brief:
- The Energy Department's plan for reordering its approval of natural gas export permits will actually slow the process for most of the two dozen projects awaiting review, Houston Chronicle's Jennifer A. Dlouhy reports.
- An appeals court ruled that the EPA cannot treat pollution sources in one region differently from those in others when determining whether to combine multiple, adjacent sources for permitting, E&E reports.
- The federal government's energy analysts kicked off a series of studies examining the nation's crude oil export ban. The Energy Information Administration released a report that acknowledges limited domestic market use for light crude, Houston Chronicle reports.
Today's Chart Review:
Is Global Warming Real? Most Americans Say Yes
from New York Times by Allison Kopicki
Mark Your Calendars (All Times Eastern):
Monday: EPA roll-out of draft rule for carbon emissions for power plants, live-streamed @ 10:30 am
Monday: Heritage Foundation discussion on Ukraine, Russia and energy @ Noon
Tuesday: Woodrow Wilson Center discussion on territorial dispute in South China Sea @ 9 am
Tuesday: Senate Environment hearing on farming, fishing, forestry, hunting in era of climate change @ 10 am
Tuesday: Brookings Institution discussion on economic consequences of delaying climate policy @ 1:30 pm
Wednesday: Senate Environment hearing on NRC's post-Fukushima actions @ 10 am
Wednesday: Energy Storage Association conference @ Noon
Wednesday: Resources for the Future seminar on the future of insurance @ 12:45 pm
Thursday: Energy Storage Association conference @ 8:30 am
Thursday: Resources for the Future seminar on EPA's greenhouse gas regulations @ 9 am
Thursday: United States Energy Association briefing on geologic carbon storage resources @ 10 am
Thursday: Senate Foreign Relations hearing on Ukraine @ 10 am
Thursday: Solar Energy Industries Association and GTM Research webinar on solar quarterly report @ 1 pm
Friday: Energy Storage Association conference @ 8 am
21-22: Natural Gas
23: Utilities and Infrastructure
OPINIONS, EDITORIALS, PERSPECTIVES
28: Roll Call
29: Houston Chronicle
30: USA Today
31: Electric Reliability Coordinating Council
RESEARCH REPORTS, ISSUE BRIEFS, CASE STUDIES
32: Energy Information Administration
1) EPA Power-Plant Proposal Will Seek 30% Carbon Dioxide Emissions Cut by 2030
from Wall Street Journal by Amy Harder
The Environmental Protection Agency will propose a draft rule on Monday seeking a 30% reduction in carbon-dioxide emissions by 2030 from existing power plants based on emission levels from 2005, according to two people who have been briefed on the rule, setting in motion the main piece of President Barack Obama's climate-change agenda. The rule, scheduled to be completed one year from now, will give flexibility to the states, which must implement the rules and submit compliance plans to EPA by June 2016. States can decide how to meet the reductions, including joining or creating new cap-and-trade programs, deploying more renewable energy or ramping up energy-efficiency technologies. Each state will have different percent reduction standards, and the national average will be 25% by 2020 and 30% by 2030, these people said.
2) Obama’s Boldest Move on Carbon Comes with Perils
from Houston Chronicle by Dina Cappiello (AP)
The new pollution rule the Obama administration announces Monday will be a cornerstone of President Barack Obama’s environmental legacy and arguably the most significant U.S. environmental regulation in decades. But it’s not one the White House wanted. As with other issues, the regulation to limit the pollution blamed for global warming from power plants is a compromise for Obama, who again finds himself caught between his aspirations and what is politically and legally possible. It will provoke a messy and drawn-out fight with states and companies that produce electricity, and may not be settled until the eve of the next presidential election in 2016, or beyond.
3) Using Executive Powers, Obama Begins His Last Big Push on Climate Policy
from New York Times by Peter Baker and Coral Davenport
All but giving up on Congress, President Obama has spent the year foraging for issues he could tackle on his own, and largely coming up with minor executive orders. But on Monday, he will unveil a plan to take on climate change that may be his last, most sweeping effort to remake America in his remaining time in office. The far-reaching regulations will for the first time force power plants in the United States to curb the carbon emissions that scientists say have been damaging the planet. By using authority already embedded in law, Mr. Obama does not need Congress — so, in this era of gridlock, he has a chance to transform the nation’s energy sector and, at the same time, his presidency.
4) Trying to Reclaim Leadership on Climate Change
from New York Times by Justin Gillis and Henry Fountain
At the end of his first year in office, President Obama flew to Copenhagen and made a big promise: that the United States would cut its greenhouse gas emissions substantially by 2020 — a bold and risky pledge that hinged on a balky Congress to make it possible. His efforts became bogged down within months, and Mr. Obama’s pledge to the rest of the world soon looked like a pipe dream. On Monday, Mr. Obama is planning to bypass Congress and take one of the biggest steps any American president has ever taken on climate change, proposing new rules to cut emissions at power plants. Yet, by itself, the president’s plan will barely nudge the global emissions that scientists say are threatening the welfare of future generations.
5) White House Turns Blind Eye on Democrats Who Oppose Climate Rules
from Reuters by Jeff Mason
Democrats in Republican-leaning states have a simple strategy for dealing with President Barack Obama's upcoming power plant restrictions before the mid-term elections: Fight them, with the White House's blessing...With control of the U.S. Senate up for grabs in the November congressional elections, Democrats' hopes of maintaining their majority could rest on the very races where the new energy rules are deeply unpopular. So, the White House is turning a blind eye to attacks from within the party, despite the importance of the regulations to Obama's agenda and post-presidential legacy.
6) Inside the White House's Last-Minute Blitz for Global-Warming Rule Support
from National Journal by Ben Geman, Alex Seitz-Wald and James Oliphant
In a string of private meetings, high-level White House aides are seeking broad political support for upcoming climate-change regulations, reaching out to constituencies that go beyond the traditional environmental and public health groups that advocate for pollution controls. John Podesta, who is a top adviser to President Obama, and White House climate aide Dan Utech have been leading the outreach effort, the White House confirmed. Podesta and Melissa Rogers, who heads the Office of Faith-Based and Neighborhood Partnerships, met with representatives from religious environmental groups Tuesday about the draft Environmental Protection Agency rules, according to a source familiar with the meeting.
7) Obama's Dirty, Coal-Loving Past
from New Republic by Alex MacGillis
First thing next week, the Obama administration will announce major new restrictions on carbon emissions from existing coal-fired power plants, which will likely be the biggest step this country has taken to address climate change and almost certainly be the most consequential act of his second term. The opposition is already painting this as a radical move by a died-in-the-wool tree-hugger. In fact, what both Obama’s allies and critics often overlook is that not that long ago, Obama was on the other side of the coal issue—far on the other side.
8) States Divided, Wary as Rule Release Draws Near
from E&E by Jean Chemnick
The planned release Monday of U.S. EPA's proposal for slashing heat-trapping emissions from existing power plants will shine a spotlight on how states will meet its mandate. It's going to be complicated.There's no single starting line. Where a state begins will depend on its politics and power supply. And every one of them is concerned that the coming rule won't fully protect its interests. Opponents of the rule this week said it could hamstring some states.
9) Regulations 101 -- a Primer on EPA's Upcoming Power Plant Rule
from E&E by Tiffany Stecker
President Obama's highly anticipated power plant rules have come a long way from a relatively low-profile legal settlement in 2010. Obama is set to unveil a proposed rule that for the first time will limit greenhouse gas emissions from the country's power plants. He officially directed EPA to craft regulations to control greenhouse gases in his Climate Action Plan last year, but the effort to curb the largest chunk of CO2 emissions in the country has been mounting for years. In late 2010, EPA agreed to craft performance standards for new and existing power plants and refineries in a legal settlement with environmental groups and select states and cities.
10) Obama's Non-Climate Climate Pitch
from National Journal by Ben Geman
President Obama offered a small detail Saturday about the big EPA draft regulation coming Monday to cut carbon emissions from power plants. "In just the first year that these standards go into effect, up to 100,000 asthma attacks and 2,100 heart attacks will be avoided – and those numbers will go up from there," Obama said in his weekly address. But those immediate health benefits that regulators are forecasting have nothing to do with lowering carbon emissions that contribute to global warming.
11) Court Ruling Could Complicate Meeting EPA Rules
from Morning Consult by Emily Holden
The Obama administration is poised to unveil landmark environmental regulations this week to substantially slash carbon emissions. But experts say recent legal uncertainty over how the federal government can incentivize big power users to consume less energy could slow the growth of technologies states might use to meet the forthcoming rules. In May the D.C. Court of Appeals threw out an order from the Federal Energy Regulatory Commission that required participants in the energy-saving “demand response” programs to get paid the same rate as electricity producers...Experts say the case could be in the courts for years. That could discourage growth in the nascent demand response and smart grid industry—which policymakers have hoped could be a key tool for cutting carbon emissions. Grid planners are already relying on demand response to balance electricity needs and keep prices from rising substantially in times of high demand as more and more coal-fired power plants are shutting down.
12) A Good Reminder that Energy Forecasts Are Often Wildly Wrong
from Vox by Brad Plumer
The White House has a new report touting the recent boom in US fossil-fuel production. This is an old story — though one the Obama administration seems eager to emphasize before it announces sweeping new regulations on coal power plants on June 2. This chart, however, was quite striking. Ever since 2006, oil imports have been far, far lower than actual forecasts.
13) Court Rejects EPA Guidance on Aggregate 'Major Source' Permitting
from E&E by Jeremy P. Jacobs
An appeals court vacated a U.S. EPA guidance on determining whether to combine multiple, adjacent air pollution sources for permitting. The U.S. Court of Appeals for the District of Columbia Circuit held EPA cannot treat pollution sources in one region differently from those in others because of an adversarial court ruling. At issue is EPA's response to a 2012 6th U.S. Circuit Court of Appeals ruling in Summit Petroleum Corp. v. EPA. The court held that EPA couldn't aggregate certain pollution sources -- in that case, natural gas wells and a refinery -- that were not geographically adjacent into a single stationary source for permitting under the Clean Air Act.
14) Environmental Groups Focus on Change by Strengthening Their Political Operations
from New York Times by Michael Wines
When the police arrested seven students at Washington University in St. Louis recently after a crowd of protesters sought to crash a board of trustees meeting, leaders of the environmental movement were thrilled. The students were demanding the resignation of one of the board’s members: Gregory H. Boyce, the chairman of Peabody Energy Corporation, the nation’s largest coal company and one of the most ardent corporate opponents of efforts to address global warming. They also represented the face of a new activism that the nation’s largest environmental groups are encouraging to revive a climate-change movement that seemed stalled not so long ago. Like their student confederates, the so-called big green groups are mounting their own climate-change campaign this spring, and it looks nothing like the failed efforts of the recent past.
15) U.S. Stock-Index Futures Little Changed Before ISM Report
16) Feds Launch Oil Export Studies
from Houston Chronicle by Jennifer A. Dlouhy
The federal government’s top energy analysts have kicked off their examination of issues surrounding the nation’s crude export ban, releasing a paper that examines the limited opportunities for offloading the light, sweet oil increasingly flowing out of U.S. wells. The Energy Information Administration’s new report acknowledges the limited domestic market use for some varieties of U.S. crude, a major factor driving the current debate over selling the oil overseas. It also highlights the wide rainbow of domestic crude production covered under the catch-all term “oil,” reflecting products with widely varying densities and sulfur contents. The report forecasts domestic production for 11 different varieties of crude oil.
17) Oil-Producer IPOs Surging This Year
from Houston Chronicle by Collin Eaton
Small U.S. oil producers are hitting public markets at a rapid rate as great expectations for shale drilling beckon Wall Street investors, a Houston investment banker said Friday. So far, four exploration and production companies that pump oil in U.S. basins have gone public this year, adding to last year’s four IPOs in the sector. And there are at least three more to coming in the next few weeks, said Ira Green, a managing director and head of capital markets at Houston-based Simmons & Co. “We’ve seen a lot of it in the Permian Basin” in West Texas, Green said. “They’re big consumers of capital.”
18) BP Adjusts Approach to Hurricane Season in Gulf
from Houston Chronicle by Collin Eaton
A new batch of small, unpredictable storms in the Gulf of Mexico flummoxed forecast models last year, prompting BP to better prepare for abrupt bad weather during this summer’s hurricane season, which begins Sunday...The smaller storms are harder to track and predict than big hurricanes, and it’s almost impossible to say whether they will dissipate quickly or survive for longer periods of time. BP, the largest acreage holder in the Gulf with 620 leases, was forced to respond to three of the an estimated 70 sudden storms that hit the Atlantic Coast last year. Its 10 rigs in the Gulf sit about 60 miles to 130 miles off the U.S. coast and drill to depths between 4,500 feet to 7,000 feet of water.
19) Keystone XL: The County-by-County Rundown
from US News and World Report by Alan Neuhauser
Of the 27 counties that lie in the path of the controversial Keystone XL pipeline extension, just one stands in opposition to the project: Holt County, Nebraska, population 11,551. The county, a rural Connecticut-sized swath that spans the rolling Sandhills of northern Nebraska, has a reputation for being fiercely independent – home to what’s known as “Prairie Populism” – and the proposed $5.4 billion, 1,200-mile-long pipeline from western Canada to the Midwest has raised a host of environmental worries.
20) 'Value Over Volume' is Analysts' Mantra for Future Oil and Gas Investments
from E&E by Saqib Rahim
It's never been rocket science what investors want to see from their oil and gas companies: oil and gas production. That means fresh barrels and Btus, quarter in, quarter out. It means gathering reserves -- finding new resources to show they can keep it up for years or decades...Oil and gas will be increasingly expensive to extract. Some reserves will be extremely carbon-intensive. Meanwhile, dangling above the industry will be a sword of Damocles: the potential for a tough climate policy that reshapes the economics of the business. "The market needs to think again about whether an obsession with volume and reserve replacement is the right metric going forward," said James Leaton, research director at Carbon Tracker Initiative.
21) Winners and Losers in Feds’ New Gas Export Review Plan
from Houston Chronicle by Jennifer A. Dlouhy
The Obama administration’s plan for shaking up the way it vets proposals to export natural gas had the curious effect of winning praise from both a fierce critic and a fan of those foreign sales. The Energy Department was able to unite export foe Sen. Ed Markey, D-Mass., and advocate Sen. Mark Udall, D-Colo., by devising a new approach that appears to accelerate the review process overall, even though it extends the time benefits to just a few well-heeled players. For most of the two dozen projects still waiting for liquefied natural gas export licenses from the Energy Department, the end result is more delay.
22) Cove Point Natural Gas Export Facility Gets State OK
from Baltimore Sun by Timothy B. Wheeler
A proposed natural gas export facility in Southern Maryland moved closer to reality Friday, but state regulators ordered the terminal's owner to include more safety and environmental protections for the controversial project, and to donate $48 million to promote clean energy in the state and to help low-income Marylanders pay their power bills. The Maryland Public Service Commission authorized Dominion, an energy company based in Richmond, Va., to build a 130-megawatt generating station at its existing Lusby import terminal. The plant would provide the power needed to compress natural gas into a superchilled liquid for loading onto tankers docked in the Chesapeake Bay. But the state regulatory body imposed 179 conditions on its approval, covering items that include air and water quality, traffic, noise and forest conservation at the site.
Utilities and Infrastructure
23) MISO Could Face Rolling Blackouts by Summer 2016, FERC's Moeller Says
from SNL by Peter Marrin
With FERC Order 745 vacated, a new FERC chairman set to be confirmed this year and tighter federal environmental regulations scheduled to roll out in the coming years, the energy industry could be in for a "rough ride" and "living on the edge" in the next five to six years, according to FERC Commissioner Philip Moeller. Looking specifically at Midcontinent Independent System Operator Inc., which already projects tightening reserve margins, the rough ride could be particularly bumpy. "This is not meant to sound too alarmist, but it's not out of the realm of possibility. … If we have a hot summer in 2016, we could have rolling blackouts in MISO by 2016," Moeller said May 30 at the Northeast Power and Natural Gas Markets Conference in New York City.
24) Obama's Step Forward on Carbon Undone by China’s Steps Back
from Bloomberg by Mark Drajem and Jim Efstathiou Jr.
President Barack Obama is set to take his boldest step to halt the rise of the oceans and stop the warming of the planet. It won’t be enough unless the rest of the world follows. Trimming carbon emissions from U.S. power plants by 25 percent in coming decades, as Obama is said to be proposing, would be more than overwhelmed by increases in China and India where coal-fired power plants are springing up and new cars are rolling out of showrooms.
25) Top Coal-Power Operator Expects Plant Closures on Obama Plan
from Houston Chronicle by Mark Chediak (Bloomberg)
American Electric Power Co., the top U.S. coal-burning power plant operator, expects to be challenged and shut some of its largest units if the Obama administration proposes a 25 percent greenhouse-emission cut. The company would likely have to retire plants that can’t be relied on to deliver electricity if the U.S. Environmental Protection Agency requires such steep reductions by 2030 in proposed rules to be unveiled June 2, Chief Executive Officer Nick Akins said Wednesday in an interview.
26) Coal Versus Poverty in Kosovo Tests World Bank Clean-Air Pledge
27) Projects Seek to Turn Pavement into Alternative Energy Sources
from NBC News by Paula E. Eisenstein
Step onto the pavement on a hot day and you might get a sense of the energy that Scott and Julie Brusaw hope to tap into. The Idaho couple are thinking up a way to pave the country's roadways with solar cells, rather than asphalt or concrete. The so-called Solar Roadways are an edgy idea that the entrepreneurs said could replace much of the need for traditional sources of generating electricity in the U.S., including coal-fired power plants. And they aren't the only ones who see the potential for roadways to become alternative energy sources.
OPINIONS, EDITORIALS, PERSPECTIVES
28) Obama Will Approve Keystone, for Hillary's Sake
from Roll Call by Paul Bedsloe
The failure of the Senate earlier this month to consider an energy bill likely puts to rest, at least for this year, the prospect of Congressional action mandating approval the Keystone XL pipeline. But President Barack Obama should hardly feel he’s dodged a bullet. Repeated delays in making a decision on Keystone have freshened criticism from both left and right that the president is indecisive to a fault. At this point it seems clear, however, that Obama will be compelled by political expediency to delay the Keystone decision still further, until after the mid-term elections.
29) A Natural Gas Deal
from Houston Chronicle
A world that runs on natural gas is a world that runs on Houston. So while there is an understandable concern about the recently announced 30-year, $400 million gas trade deal between Russia and China, the impact on our Energy Capital of the World is more nuanced. After more than a half-century of strained relations, any deal of this size between Russia and China is sure to raise a few eyebrows - particularly a deal that weakens Russia's reliance on European gas sales and also reduces China's dependence on the U.S. Navy to protect gas tankers on the high seas. If this plan comes to fruition, it could mean a Vladimir Putin far more willing to take risks in Eastern Europe, and a rising China that doesn't worry about throwing its weight around the Pacific Rim at the expense of its democratic neighbors.
30) President Plays Politics with Climate Change
from USA Today by Jim Inhofe
Cap-and-trade proposals have been explicitly rejected in Congress no fewer than four times over the last 15 years, but President Obama and his administration will be announcing Monday his plans to charge full steam ahead, leaving the American majority behind. President Obama's announcement will likely rehash the normal fear-tactic talking points about the theory of man-made climate change. Then he will shift his tone and use rosy words to share about his aggressive new Environmental Protection Agency proposal that will force existing power plants to regulate carbon emissions and will set the stage for states to create cap-and-trade systems in order to regulate these plants. What's not so rosy are the numbers.
31) ERCC Answers Seven Questions You Should Have About EPA's Proposed Rule on Carbon Emissions from Existing Power Plants
from Electric Reliability Coordinating Council
Question One: EPA says they have listened carefully to views expressed by the regulated community, the states, and public interest groups and have produced a highly flexible proposal. Will that be enough to make a good rule? Answer: Flexibility needs to be demonstrated in practice, not just in promises, and it is definitely in the eye of the beholder. However, EPA can be a little inconsistent when it comes to flexibility in implementing rules or working with states.
RESEARCH REPORTS, ISSUE BRIEFS, CASE STUDIES
32) U.S. Crude Oil Production Forecast- Analysis of Crude Types
from Energy Information Administration
U.S. Energy Information Administration (EIA) data, which reflect combined production of crude oil and lease condensate, show a rise from 5.7 million barrels per day (bbl/d) in 2011 to 7.4 million bbl/d in 2013...This paper provides a short-term forecast of domestic production by crude type, supplementing the overall production forecast provided in STEO. Forecasts of production by crude type matter for several reasons. First, U.S. crude streams vary widely in quality. Second, the economics surrounding various options for the domestic use of additional domestic oil production are directly dependent on crude quality characteristics. Third, actual or potential export values also vary significantly with quality characteristics.