From: Morning Consult
To: Scott Jenkins,
Subject: Morning Consult Energy: Veil of Secrecy Distorting Crude Oil Export Debate
Date: Thu Jun 12 13:22:46 MDT 2014


By Emily Holden (@emilyhholden)



Today’s Washington Brief:

  • Amid talks about lifting the crude oil export ban, Houston Chronicle's Jennifer A. Dlouhy reports that a "veil of secrecy around existing oil exports may safeguard commercial financial transactions at the risk of distorting the debate." 

  • Carbon offsets appear to be off the table in the EPA's proposed rule, SNL's Eric Wolff reports

  • In polling results, Americans by two-to-one would pay more to curb climate change, Bloomberg reports. In Senate battleground coal states, 47 percent of likely voters oppose EPA's draft carbon emissions rule, Politico Pro reports
  • In other EPA news, the agency's proposal to redefine its jurisdiction over the nation's waters is proving unpopular among lawmakers from both parties, The Hill's Benjamin Goad reports


Today’s Business Brief:

  • Colorado's governor is pushing a plan that prohibits localities from banning fracking altogether but allows them to place restrictions on the practice. The proposal is an effort to avoid a fracking shutdown at the polls, but most oil companies are against the proposal, fearing it would embolden fracking opposition across the nation, Wall Street Journal's Russell Gold and Amy Harder report. Meanwhile, Ohio is leading a group of a dozen drilling states to explore a link between fracking and earthquakes, AP reports

  • The Federal Energy Regulatory Commission is appealing a court decision that its order on demand response exceeded its jurisdiction, The Hill reports

  • U.S. natural gas output will set a record this year, according to a report by the Energy Information Administration. Bloomberg reports



Today's Chart Review: 


US Coal Miner Employment Sustains Free Fall Beyond 2nd Year

from SNL by Taylor Kuykendall and Neil Powell






Mark Your Calendars (All Times Eastern): 


Thursday: House Natural Resources hearing on American energy jobs @ 9:30 am 

Thursday: Brookings Institution talk on Japanese energy future @ 10:30 am 

Thursday: Senate Homeland hearing on securing radiological materials @ 10:30 am 

Thursday: Sens. Heitkamp, Barrasso speak at Natural Gas Roundtable luncheon @ Noon 

Thursday: U.S. Energy Association forum on efficiency at National Press Club @ 1 pm 

Thursday: Morning Consult happy hour at Capitol Lounge @ 6 pm

Friday: U.S. Energy Association forum on efficiency at National Press Club @ 7:30 am 





1-15: General
16-20: Oil
21: Natural Gas
22: Utilities and Infrastructure
23-24: Coal
25: Nuclear 



26: Wall Street Journal 
27: National Journal 
28: Washington City Paper 



29: Energy Information Administration 







1) Carbon Offsets Appear to be Off the Menu in EPA's Proposed Greenhouse Gas Rule

from SNL by Eric Wolff 


The U.S. EPA's recently announced carbon dioxide proposal for existing power plants grants states wide latitude in meeting the agency's emission targets, but it appears to take away one long-standing tool: the carbon offset. A carbon offset, in the context of the rule, would be an emission reduction by a business outside the power sector sold to power plant emitters to balance off some of the plant's carbon dioxide pollution. The rule regulating existing power plants released June 2 does not appear to allow states to use them to meet the EPA's targets because offsets do not directly lower emissions from power plants, though the language in the rule is somewhat confusing, observers said. "They're [the EPA] not preventing states from doing offsets. They're just preventing the offsets from counting," said Nathan Richardson, an attorney and researcher at Resources for the Future, a Washington, D.C., think tank.


2) Americans by 2 to 1 Would Pay More to Curb Climate Change

from Bloomberg by Lisa Lerer 


Americans are willing to bear the costs of combating climate change, and most are more likely to support a candidate seeking to address the issue. By an almost two-to-one margin, 62 percent to 33 percent, Americans say they would pay more for energy if it would mean a reduction in pollution from carbon emissions, according to the Bloomberg National Poll. While Republicans were split, with 46 percent willing to pay more and 49 percent opposed to it, 82 percent of Democrats and 60 percent of independents say they’d accept higher bills.


3) Poll: EPA Rule Unpopular with Coal-State Voters

from Politico Pro by Darren Goode 


Majorities or pluralities of likely voters in eight 2014 Senate battleground coal states oppose proposed EPA greenhouse gas restrictions for existing power plants and would be less likely to support candidates who side with the rule, according to a new poll released by the National Mining Association. The surveys took the pulse of likely 2014 voters in Arkansas, Colorado, Georgia, Kentucky, Louisiana, Michigan, Montana and North Carolina. Overall, it found that 37.3 percent supported EPA’s June 2 proposal; 47.1 percent opposed it; and 15.6 percent didn’t have an opinion when initially asked about it.


4) Unadvertised Visit from EPA's McCarthy Encourages CEOs

from E&E by Rod Kuckro


What may have been the most important event at the Edison Electric Institute's annual meeting occurred with no fanfare and out of sight of the more than 1,000 attendees early Monday morning, hours before the scheduled program. And it could prove to be a pivotal event as the electric utility industry opens what amounts to a multiyear negotiation with U.S. EPA over how to control greenhouse gas emissions from power plants. It was when EPA Administrator Gina McCarthy met for more than hour with the executive committee of the trade association representing investor-owned utilities behind closed doors to do what industry leaders credit her for doing best: listening.


5) MIT Study Finds Obama's Power Plant Rule More Costly Than Putting a Price on Carbon

from E&E by Evan Lehmann


It turns out that cap and trade might not be so bad after all. New research shows that reducing carbon emissions through regulations like the administration's recent rules on power plants cuts less carbon at a higher price than the embattled climate policy Congress failed to pass in 2010. Cap and trade, or an equivalent carbon tax, would be economically easier on families, fairer to lower-income people and more flexible for emitters, according to a study by the Massachusetts Institute of Technology.

6) Chinese Hints, U.S. Emission Cuts Fall Far Short of Climate Cure

from Reuters by Alister Doyle and Ben Garside 

China's hints that it will cap its soaring greenhouse gas emissions and a U.S. plan to cut emissions in the power sector, while representing a shift, do not add up to a strong cure for global warming by the world's top two emitters. Other nations have hailed Washington and Beijing for a newfound commitment to tackle climate change. Governments are working on a deal, due in Paris in late 2015, to slow rising temperatures to avert more heatwaves, floods and rising seas. Yet after a rush of enthusiasm, there are uncertainties - especially about China.


7) First House Hearing Set on EPA Climate Rule

from The Hill by Laura Barron-Lopez 


A House panel on Wednesday confirmed the first hearing next week over the administration's controversial climate rule limiting carbon pollution from power plants. The House Energy and Commerce subcommittee on Energy and Power scheduled the hearing for June 19, barely two weeks after President Obama unveiled the new standards. It will be the first hearing in Congress on the Environmental Protection Agency (EPA) rules, but likely not the last as Republicans have blasted the administration for waging a "war on coal" they say will kill energy jobs and hurt the economy.


8) In 2016, Republicans Will Have Fracking on Their Side

from National Journal by Clare Foran 


The road to the White House could be paved with oil and gas for a trio of Republican presidential hopefuls.

Texas Gov. Rick Perry, Sen. Ted Cruz, and Louisiana Gov. Bobby Jindal all come from states where fracking has created new jobs in the oil and gas industry. And if any of the Gulf State lawmakers launch a presidential bid, fracking will bolster their economic track record.


9) Proposed Colorado Fracking Deal Proves Hard to Seal

from Wall Street Journal by Russell Gold and Amy Harder 


The governor of Colorado is trying to broker a deal to head off a precedent-setting showdown over fracking at the ballot box in November, but his effort is running into trouble. Negotiations involving new hydraulic-fracturing rules are foundering in large part because the energy industry is split over the proposal by Gov. John Hickenlooper, a Democrat. His plan, which would need approval by the Legislature, would give communities the explicit power to write their own rules on such issues as how close drilling rigs can be to houses. But it would prohibit local governments from banning fracking outright...


10) Drilling States Explore Earthquake Issue

from Houston Chronicle (AP) 


Ohio is leading a group of drilling states working with seismology experts from energy companies, government agencies and universities across the U.S. on how best to detect and regulate human-induced earthquakes. The initiative follows Ohio’s discovery in April of a probable link between the drilling practice called hydraulic fracturing and five small tremors in eastern Ohio, a first in the Northeast.


11) EPA’s Water Rule Takes Bipartisan Beating

from The Hill by Benjamin Goad


The Environmental Protection Agency’s (EPA) proposal to redefine the scope of its authority over the nation’s waters drew a barrage of criticism Wednesday from House lawmakers accusing the agency on trampling on the rights of states and landowners. Deputy EPA Administrator Robert Perciasepe maintained the agecy's draft “Waters of the United States” rule unveiled earlier this year merely clarifies decades-old regulations governing which bodies of water fall under federal jurisdiction and permitting requirements. But some Democrats on the House Transportation Committee expressed strong reservations about the plan, and Republicans decried it as a blatant power grab.


12) Drug Gangs Attacking With Tanks Block Mexican Shale Boom


14) Ukraine and Russia Still Far Apart on Gas Deal

from New York Times by Andrew Higgins 


Russia and Ukraine failed on Wednesday to end an acrimonious standoff over the price of natural gas supplied by the Russian energy giant Gazprom, dashing hopes that the election of a new Ukrainian president might ease a dispute that has long poisoned relations between Moscow and Kiev. The failure to reach a deal also raised concern in Europe that its own supplies of energy from Russia could be interrupted.


15) U.S. Stock Futures Are Little Changed Before Retail Sales


U.S. stock-index futures were little changed, following a two-day decline in the Standard & Poor’s 500 Index, as investors awaited data on retail sales and jobless claims to gauge the health of the world’s largest economy...Futures on the S&P 500 (SPX) expiring in June climbed less than 0.1 percent to 1,944.5 at 6:50 a.m. in New York. Dow Jones Industrial Average contracts added 5 points, less than 0.1 percent, to 16,860. Futures on the Nasdaq 100 Index also rose less than 0.1 percent.





16) Laws Limit Crude Exports, and Information About Them

from Houston Chronicle by Jennifer A. Dlouhy 


At least one company has asked the government for permission to send crude overseas, but whether and when the public will know about the government's verdict on Continental Resources' bid depends largely on an obscure agency and a process shrouded in secrecy. The Commerce Department's Bureau of Industry and Security has the task of processing applications to export crude, but federal law bars it from providing detailed information on any resulting licenses or cargo-by-cargo transactions that can be commercially sensitive. Even aggregated data about existing transactions generally becomes available much later - usually under Freedom of Information Act requests - and does not identify export license holders.



17) California Warns of Oil-by-Rail While Keeping Data Secret


18) Canada Tries Turning Up Heat on Obama as Keystone Stalled


20) Unnamed Gulf State, not Louisiana, Blocking Approval of $627 Million in BP Oil Spill Restoration Work

from Times-Picayune by Mark Schleifstein 


One of five Gulf Coast states that serve as trustees in assessing natural resource damages in the aftermath of the BP Deepwater Horizon oil spill is blocking the release of $627 million that BP has set aside for a third phase of early restoration projects, according to a senior Louisiana official. "We have hit a snag in finalizing the Phase III Early Restoration Plan," said Kyle Graham, executive director of the state Coastal Protection and Restoration Authority, who acts as the state's trustee in negotiations over how to spend damage assessment money, in a statement. 


Natural Gas


21) US Natural Gas Output Will Set a Record This Year

from Houston Chronicle (Bloomberg)


U.S. natural gas output will reach 73 billion cubic feet a day for the first time this year as new pipelines tap into shale supplies stranded in the Marcellus formation in the Northeast, a new government report showed.

Marketed gas output in the lower 48 states will increase 4 percent from 2013, setting a record for the fourth straight year, according to the U.S. Energy Information Administration’s Short-Term Energy Outlook, released Tuesday in Washington.



Utilities and Infrastructure


22) FERC to Appeal Ruling on Energy Saving Incentives

from The Hill by Timothy Cama 


The Federal Energy Regulatory Commission (FERC) is appealing a ruling that last month struck down its program to incentivize electricity users to save energy during peak periods.

The program, also known as demand response, sought to require electric utilities to pay end users to cut their consumption when demand rises. Such a program can reduce energy use while potentially eliminating the need for new infrastructure and power plants.





23) US Coal Miner Employment Sustains Free Fall Beyond 2nd Year

from SNL by Taylor Kuykendall and Neil Powell


A free fall in U.S. coal mining employment that began after a near-term peak in the final quarter of 2011 has extended into 2014, with first-quarter employment dropping by more than 5,700 jobs, or a decline of about 7.0%, compared to the same quarter a year ago. An SNL Energy analysis of average coal employment data from the U.S. Mine Safety and Health Administration shows the average number of employees in the one-year period ended March 31 fell about 8.3% year over year to 79,658 employees. 


24) McConnell Backers Pummel Grimes Over Coal Omission

from Politico Pro by Erica Martinson 


Kentucky Democratic Senate candidate Alison Grimes’s sin of omission at a Capitol Hill fundraiser last week won’t be quickly forgotten — or forgiven, according to supporters of Senate Minority Leader Mitch McConnell. After insisting she’d use a big-money fundraiser with Senate Majority Leader Harry Reid last week to promote Kentucky coal, Grimes didn’t even mention the word in her speech, according to an audio recording of the affair obtained by POLITICO. McConnell’s campaign painted this as a “we told you so moment,” depicting Grimes as soft when facing D.C. Democrats, rather than the fierce warrior for coal that the state wants to send to Washington to battle President Barack Obama’s Environmental Protection Agency.





25) Q&A:  Former U.S. Trade Representative Talks Nuclear

from Washington Examiner by Zack Colman 


Until the beginning of 2013, Ron Kirk was the United States' chief salesman abroad as the U.S. Trade Representative, which takes the lead on trade negotiations and exports. Nowadays, he's promoting nuclear power, with an eye toward drumming up domestic support while looking at overseas opportunities. He is now co-chairman of the CASEnergy Coalition, a group of environmental organizations, medical professionals, academics and industry groups that promote nuclear power as a way to provide bulk electricity and address climate change.





26) Dreaming the Impossible Green Dream

from Wall Street Journal by Robert Bryce 


Over the past three decades, according to the BP Review, global electricity demand has been growing by about 450 terawatt-hours a year. And the International Energy Agency expects power demand will continue growing by about that pace for the next two decades. What would be required if we relied on solar energy to keep up with expected growth in electricity demand? 


27) Cantor's Downfall Won't Push the GOP Rightward on Climate Change–There's No More Room

from National Journal by Ben Geman 


Eric Cantor's loss to tea-party insurgent Dave Brat could doom immigration reform and fuel the next battle over raising the debt ceiling. But when it comes to climate-change policy, emboldening the GOP's conservative wing won't push the House rightward much—if at all. That's because there's little room to move any further in that direction.


28) When Will Windmills Make Financial Sense?

from Washington City Paper by Cecil Adams 


The carbon cost of wind power is well known—low carbon emissions is one of wind’s main advantages. (Renewability, naturally, is the other.) Wind’s cost-effectiveness from a financial standpoint is likewise no mystery, but the story is less upbeat, particularly in light of the natural gas boom due to fracking. It’s not game over for wind power; all fossil fuels including gas will run out eventually. But wind has a steep hill to climb.





29) Short-Term Energy Outlook

from Energy Information Administration 

  • During the April-through-September summer driving season this year, regular gasoline retail prices are forecast to average $3.62/gallon (gal), 4 cents higher than last year.
  • EIA estimates that U.S. total crude oil production averaged almost 8.4 million barrels/day (bbl/d) in May, the highest monthly average production since March 1988. 
  • Natural gas working inventories on May 30 totaled 1.50 trillion cubic feet (Tcf), 0.74 Tcf (33%) below the level at the same time a year ago and 0.90 Tcf (37%) below the previous five-year average (2009-13).