From: Morning Consult
To: Scott Jenkins,
Subject: Morning Consult Energy: Refinery Stocks Fall On Speculation About Crude Export Decision
Date: Thu Jun 26 12:37:58 MDT 2014


By Emily Holden (@emilyhholden)



Today’s Washington Brief:

  • A U.S. decision to allow to companies to export a minimally distilled variety of ultralight oil is a win for shale crude producers but at the expense of refiners, whose stocks fell in trading Wednesday, Houston Chronicle's Jennifer A. Dlouhy reports. The AP says the ruling could help the U.S. become a major oil exporter, while Bloomberg contends it opens a niche market that may permit 3.6 percent of domestic crude to be sold internationally. Washington Examiner's Zack Colman reports that the decision gives hope to supporters of ending the ban on crude oil exports, although Energy Secretary Ernest Moniz downplayed the potential for a major change in policy.

  • The House approved a bill to speed up natural gas exports, and now the debate shifts to the Senate where Energy Chairwoman Mary Landrieu wants to move a similar bill from Colorado Democrat Mark Udall through committee. Landrieu doesn't have a commitment for floor time yet, Colman reports

  • House Speaker John Boehner is threatening to sue President Barack Obama over what he calls an abuse of his executive authority, Reuters reports. Meanwhile, Oversight Chairman Darrell Issa says he might hold EPA chief Gina McCarthy in contempt of Congress for not turning over documents the committee has subpoenaed, E&E reports

Today’s Business Brief:

  • Ethanol and gasoline producers are trying to overturn a 2009 California rule mandating cuts in carbon emissions, and the Supreme Court could determine whether to take up the lawsuit in the next few days, Reuters' Mica Rosenberg reports

  • Sales of oilfield gear could be covered in the next round of sanctions against Russia, Bloomberg reports.  


Today's Chart Review: 


California continues to set daily records for utility scale solar energy

from Energy Information Administration 







Mark Your Calendars (All Times Eastern): 


Thursday: Resources for the Future talk on Risky Business report @ 9 am 

Thursday: House Small Business hearing on downstream challenges for small energy businesses @ 10 am

Thursday: Heritage Foundation talk on EPA water act jurisdiction rule @ Noon 

Thursday: Environmental Law Institute talk on clean water @ Noon 

Thursday: Center for Climate and Energy Solutions talk on using captured carbon for oil recovery @ 2 pm

Thursday: Latino group Google hangout with McCarthy on EPA rules @ 3:30 pm 

Thursday: Business Forward call on Risky Business report @ 4 pm 





1-9: General
10-17: Oil
18: Natural Gas
19-21: Utilities and Infrastructure
22: Coal
23: Nuclear 
24-25: Renewables




26: USA Today 
27: Bloomberg 
28: Reuters 

29: Institute for Energy Research



30: Morning Consult 







1) Record-low number of Dems join GOP on pro-pipelines bill as 'energy week' continues

from E&E by Elana Schor


Seventeen House Democrats yesterday joined all but one Republican in voting to replace the presidential permitting process that Keystone XL has been mired in for years with a faster path to approval of energy infrastructure. The 238-173 vote to approve H.R. 3301, crafted by House Energy and Commerce Chairman Fred Upton (R-Mich.) and Rep. Gene Green (D-Texas), marked a record-low number of Democrats crossing the aisle to support the GOP on measures that would increase the flow of oil and gas between the United States and its North American neighbors. The legislation would not directly approve Keystone XL but carves out a path for the contentious oil sands crude pipeline to win speedy approval even if President Obama rejects its bid to cross the northern border.


2) Energy exec says understanding new EPA rules ‘another level of hell’

from City Wire by Wesley Brown 


A representative of Arkansas' largest electric utility on Wednesday compared the Environmental Protection Agency’s new far-reaching guidelines to reduce carbon emissions in Arkansas to Dante’s journey through hell in the epic Divine Comedy poem. “This (EPA) rule is another level of hell, and I am talking about just trying to understand it,” joked Chuck Barlow, vice president of environmental policy and strategy for New Orleans-based Entergy Corp. Barlow made his humorous yet serious comments at the first meeting between nearly 20 stakeholder groups and state regulators from the Arkansas Department of Environmental Quality and the Arkansas Public Service Commission since the Obama Administration announced the proposed greenhouse gas guidelines on June 2.


3) Boehner says to file lawsuit over Obama executive actions

from Reuters by David Lawder 


U.S. House Speaker John Boehner said on Wednesday he is planning to file a lawsuit alleging that President Barack Obama has abused his executive authority by implementing policies without congressional approval.

Boehner told reporters the suit was aimed at protecting the rights of Congress under the constitution and said Obama was ignoring the laws that it passes. 


4) Issa threatens McCarthy with contempt

from E&E by Robin Bravender and Manuel Quiñones


House Oversight and Government Reform Chairman Darrell Issa threatened to hold U.S. EPA chief Gina McCarthy in contempt of Congress today over subpoenaed documents that he says her agency is withholding...Last November, Issa issued a subpoena for documents pertaining to a host of Republican-led probes into the agency, including documents and communications between EPA and the White House referring to congressional requests for information. Issa has accused the White House of interfering with his panel's investigations into EPA's activities.


5) Manchin, Whitehouse hold climate colloquy

from Politico Pro by Darren Goode 


Sens. Sheldon Whitehouse and Joe Manchin sought common ground Wednesday — at least among Democrats — on the existence of climate change and what to do about it. Among the possible solutions they raised: tapping the tax code to modernize coal power plants. The differences between Whitehouse, a Rhode Island liberal who gives weekly floor speeches on climate change, and Manchin, a West Virginia moderate and champion of coal, were at times on full display. But for the better part of their 27-minute colloquy on the Senate floor, they discussed how Congress can look to break the gridlock.


6) Colorado city rejects fracking moratorium

from Houston Chronicle (AP) 


The Colorado municipality of Loveland has rejected a fracking moratorium that would have made it the sixth community to limit or ban hydraulic fracturing. The two-year moratorium failed by about 1,000 votes, out of about 23,000 ballots cast.


7) Officials shut drilling waste well after second quake

from Houston Chronicle (AP)


Colorado regulators have ordered the shutdown of an oil and gas wastewater disposal well east of Greeley after seismologists detected two earthquakes in the area in less than a month. The Greeley Tribune reports the Colorado Oil and Gas Conservation Commission directed High Sierra Water Services to stop injecting water into the well after a team of University of Colorado seismologists recorded a 2.6-magnitute earthquake Monday afternoon. The team began monitoring the region after a 3.4-magnitude earthquake May 31.


8) Obama Calls Climate-Change Skeptics ‘Fringe’ Element


President Barack Obama derided climate-change skeptics as a “fringe” element as he highlighted his record on the environment and cutting greenhouse gas emissions before a conservation group.

Obama yesterday indirectly criticized congressional Republicans, who he said view climate change as “a liberal plot.”


9) U.S. Stock-Index Futures Are Little Changed Before Data




10) US export decision deals blow to some Gulf Coast refiners, processers

from Houston Chronicle by Jennifer A. Dlouhy 


The Commerce Department’s decision to allow two Texas companies to export a minimally distilled variety of ultralight oil is a win for Eagle Ford Shale crude producers, at the expense of refiners and companies planning to build processing plants along the Gulf Coast. The agency effectively declared those types of ultralight oil — called condensates — are a petroleum product free for export as long as they have been run through a distillation tower. The ruling is likely to change the economics of some of the Gulf Coast’s more expensive processing plants...Refiners, too, were feeling some pain in trading early Wednesday, on expectations that any move to ease the export of condensate — whether straight from the field or lightly distilled — could lift the price for domestic crude they now buy at a steep discount. Stock prices for San Antonio-based Valero Energy Corp. and Tesoro Corp. and a host of other refiners fell in trading Wednesday. Valero shares were down 9.6 percent to $50.62 midday and Tesoro had fallen 5.5 percent to $57.52. Phillips 66 was trading down 4.6 percent at $81.03, Marathon Petroleum Corp. was down 7.4 percent to $80.05 and HollyFrontier Corp. was down 8.3 percent to $44.90.


11) Ruling could help US become major oil exporter

from AP by Jonathan Fahey and Dina Cappiello


Companies are taking advantage of new ways to export oil from the U.S. despite government restrictions, and in the process helping the U.S. become an ever bigger exporter of petroleum on the world stage. The Obama Administration has opened the door to more exports - without changing policy - by allowing some light oils to be defined as petroleum products like gasoline or diesel, which are not subject to export restrictions.


12) U.S. Crude Oil Ruling Seen Opening Niche Export Markets


14) Iraq Says Oil Exports to Surge as ISIL Violence Away From Output


15) U.S. Oilfield Gear Sales to Russia May Face Restrictions

Natural Gas


18) House approves speeding up natural gas exports

from Washington Examiner by Zack Colman


The House passed legislation Wednesday expediting liquefied natural gas exports to nations that lack free-trade agreements with the United States, the latest development in a months-long Capitol Hill debate about whether to send the energy resource abroad. Rep. Cory Gardner's bill passed 266-150, with 46 Democrats joining Republicans and two GOP lawmakers opposing the measure. The legislation would require the Energy Department to rule on applications within 30 days after developers complete a National Environmental Policy Act review...The debate now shifts to the Senate, where Sen. Mark Udall, D-Colo., facing a challenge from Gardner for his Senate seat, is sponsoring similar legislation. His bill would require DOE decisions within 45 days. Sen. Mary Landrieu, D-La., held a hearing on the legislation last week in the Energy and Natural Resources Committee, which she heads. She said she wants to move the bill through committee and is talking to Majority Leader Harry Reid, D-Nev., about floor time, but there's no commitment yet.



Utilities and Infrastructure


19) Reid Says FERC Nominees to Get Vote When Senate Returns From July 4 Recess

from Bloomberg BNA by Ari Natter


The Senate will vote on Federal Energy Regulatory Commission nominees Cheryl LaFleur and Norman Bay when the Senate returns from its Fourth of July recess, Senate Majority Leader Harry Reid (D-Nev.) told Bloomberg BNA. “We are going to try get them done, probably not this time, but [the] next week we come back,” Reid said in a brief interview. Under a compromise agreement reached earlier this month between the White House and Senate leaders, FERC Acting Chairman LaFleur will continue to lead the commission for nine months, following Senate confirmation of her nomination to a second term.


20) FERC ruling called setback for New England ratepayers

from New Haven Register by Luther Turmelle 


A consumer advocacy group says a recent ruling by federal energy regulators will mean New England ratepayers will get their electricity at a higher cost than they would have under a ruling made by an administrative law judge. The Federal Energy Regulatory Commission’s 3-1 vote Friday gave preliminary approval to provide transmission line owners in the region with a return on equity of 10.57 percent, the National Consumer Law Center and Public Citizen said Tuesday. Return on equity determines how much profit the companies can make. FERC’s ruling overturned a 2013 decision made by an administrative law judge with the agency that set the return on equity at 9.7 percent.


21) Florida Power and Light seeks OK to invest in natural gas drilling

from Palm Beach Post by Jeff Ostrowski


In a move that could cut Florida Power & Light’s energy costs by $107 million over three decades, the state’s largest utility wants to drill for natural gas in Oklahoma. FPL on Wednesday asked the Florida Public Service Commission for permission to invest $68 million to drill wells in the Woodford Shale region. By producing its own energy for part of its electricity demand in Florida, FPL would cut out the oilpatch middlemen — and gain more control over the price it pays for natural gas, a commodity it buys in bulk to create electricity.




22) Rahall’s test: Can a West Virginia Democrat survive EPA’s coal rules?

from Politico Pro by Erica Martinson 


The state, where an imprisoned felon ran a close second to Obama in the 2012 primary, was always going to provide challenging turf for Democrats this November, but EPA raised the stakes this month by proposing a greenhouse gas rule that could sharply reduce the nation’s reliance on coal. The rule has offered Republicans a wedge issue in House and Senate races across the country, including the Kentucky contest, where Senate Minority Leader Mitch McConnell is facing Democratic challenger Alison Lundergan Grimes. Perhaps more than any other candidate on the ballot, Rahall faces a test: Can red-state Democrats separate themselves from a president so deeply unpopular back home?





23) Tepco Faces Down Protest to Press Ahead With Atomic Restarts





24) Opponents of renewable energy law ask for U.S. Supreme Court hearing

from Reuters by Mica Rosenberg 


Fuel producers are urging the U.S. Supreme Court to hear a challenge to California's landmark low carbon fuel standard, the first of a series of cases seeking to roll back state renewable energy laws around the country. The court could decide in the next few days whether to take up a lawsuit brought by a coalition of ethanol and gasoline producers trying to overturn a 2009 California rule mandating cuts to carbon emissions. The measure, created by an executive order from former Governor Arnold Schwarzenegger, calculates emissions throughout the lifecycle of a fuel by including pollution from production and transportation as well as ultimate use.


25) NextEra's renewable assets enable formation of high-yield spinoff

from E&E by Rod Kuckro


The latest wrinkle in the transformation of the electric utility business model is playing out on Wall Street this week as investors weigh the initial public offering of NextEra Energy Partners LP, a "yieldco" that is designed like master limited partnerships in the oil and natural gas industry to deliver predictable, long-term income to investors. The new company will be majority owned by Juno Beach, Fla.-based NextEra Energy Inc. and would be the first one -- and maybe the only one -- to be created by a utility holding company. NextEra launched the IPO on June 19, and the stock is expected to be priced tomorrow.



A message from Southern Company:


By developing the full portfolio of energy resources – new nuclear, 21st century coal, natural gas, renewables and energy efficiency – Southern Company is diversifying our energy resources for the benefit of customers. By limiting dependence on any one fuel source, we mitigate risk and deliver customer value, now and in the future. To learn more about Southern Company’s development of the full portfolio of energy resources visit our website and follow us on Twitter.





26) Boehner: House Republicans for responsible energy

from USA Today by John Boehner 


One thing I learned running a small business is that you have to play to your strengths. Our economy has its challenges, but America is at the forefront of an energy boom. We have more combined oil, coal and natural gas resources than any other nation on Earth. That's why, every day, Republicans are working on a true all-of-the-above energy agenda that will help lower costs, create jobs, strengthen our allies and make us a nation of builders again.


27) Let's Talk About Climate Change: Ritholtz Chart

from Bloomberg by Barry Ritholtz


Measurements of global temperatures are consistently rising, especially over the last half century. As the World Meteorological Organization points out: “13 of the 14 warmest years on record have all occurred in the 21st century.” Which brings us to this chart:




You might be wondering: What do increased temperatures have to do with rainfall?

As it turns out, a lot.


28) It's time to separate myths from reality in LNG

from Reuters by Clyde Russell 


The gap between perception and myth in liquefied natural gas (LNG) is widening, with both buyers and suppliers appearing to subscribe to views that bear limited resemblance to reality. This dynamic was very much in evidence at this week's Australian Gas Export Outlook (AGEO) conference in Brisbane, where buyers appeared confident that a wave of new projects around the world would leave them spoilt for choice of supply, and at lower prices.


29) Moratorium on Coal Plant Closures Essential

from Institute for Energy Research


Recent events in New England and elsewhere in the U.S. have demonstrated that policies which hurt the U.S. coal fleet are placing the reliability, affordability, and security of America’s electric supply system at risk: 

• These policies will significantly increase wholesale electric rates – and could increase them by as much as 80 percent – according to Dr. Julio Friedmann, Assistant Secretary for Clean Coal at the U.S. Department of Energy (DOE).1 

• The increases will be especially harmful in certain states – such as Indiana, Iowa, Michigan, Missouri, Ohio, West Virginia, and Wyoming (Figure EX-1).

• Severe economic hardship will be imposed on people who can least afford it – low income families, minorities, children, and the elderly. 



A message from Southern Company:


What’s the best recipe for clean, safe, reliable and affordable energy? A diverse mix of resources and Southern Company is developing the full portfolio through energy innovation. Electricity enhances the quality of life for all Americans so we are doing more, managing nearly $2 billion a year in research and development. Learn more about our innovative approach to energy on our website and follow us on Twitter.





30) Americans Grade the Government Averagely on Energy Cost Affordability

from Morning Consult 


Among the parties, the plurality gave the government an average ‘C’ on keeping energy costs affordable. The Democrats’ grading is skewed right, meaning they were more likely to grade the government higher. Conversely, the Republicans’ grading is skewed left and trended more towards lower grades.