From: Morning Consult
To: Scott Jenkins,
Subject: Morning Consult Energy: EPA Water Intake Rules Relieve Utilities, Disappoint Environmentalists
Date: Tue May 20 12:45:12 MDT 2014


By Emily Holden (@emilyhholden)



Today’s Washington Brief:

  • The EPA released water intake rules that require companies to reduce the number of fish killed in the cooling systems of older power plants and factories but do not require them to use less fresh water or install specific technologies. The rules relieved the utility industry but disappointed environmental groups, Wall Street Journal's Alicia Mundy reports.

  • Norman Bay, the White House nominee to chair the Federal Energy Regulatory Commission, will face tough questions from Republicans on the Senate Energy panel today, E&E's Hannah Northey reports.
  • Pennsylvania Democrats voting on a gubernatorial primary ballot today will be choosing between four candidates campaigning to impose some sort of severance tax on the state's surging natural gas industry, Politico Pro's Talia Buford reports


Today’s Business Brief:


Today's Chart Review: 


Why China is Driving a Hard Bargain with Russia Over Gas

from Wall Street Journal by Wayne Ma






Mark Your Calendars (All Times Eastern): 


Tuesday: Distributed Solar Forum @ 8 am 

Tuesday: Energy Efficiency Global Forum with Moniz @ 8 am

Tuesday: National Town Meeting on Demand Response and Smart Grid @ 8:30 am

Tuesday: Platts 3rd Annual North American Refined Products conference in Houston @ 9:45 am
Tuesday: House Natural Resources hearing on energy and manufacturing jobs @ 10 am 
Tuesday: Senate Energy hearing on FERC nominees LaFleur and Bay @ 10:15 am

Tuesday: The Hill forum on advanced vehicle infrastructure @ Noon 
Tuesday: Environmental Law Institute and National Invasive Species Council webinar @ Noon 
Tuesday: Environmental Law Institute webinar on methane leackage from fracking @ Noon 
Tuesday: House Natural Resources hearing on oil and gas activities in wildlife refuges @ 2 pm
Tuesday: House Transportation hearing on pipeline safety @ 2 pm
Tuesday: House Veterans' Affairs Committee hearing on energy jobs for veterans @ 2 pm
Wednesday: Energy Efficiency Global Forum with Moniz @ 8:30 am

Wednesday: Distributed Solar Forum @ 8:30 am

Wednesday: National Town Meeting on Demand Response and Smart Grid @ 8:30 am

Wednesday: Platts 3rd Annual North American Refined Products conference in Houston @ 10 am 
Wednesday: House Homeland Security hearing on cyber threats @ 10 am

Thursday: Distributed Solar Forum @ 8:30 am 
Thursday: AEI book release, panel on conservative reform with McConnell, Cantor @ 9 am
Thursday: Center for Climate and Energy Solutions conversation on carbon pricing @ 9:30 am 




1-12: General
13-14: Oil
15-16: Natural Gas
17-20: Utilities and Infrastructure
21: Nuclear 
22-23: Renewables




24: Los Angeles Times
25: Houston Chronicle 
26: Wall Street Journal 



27: Federal Energy Regulatory Commission
28: Energy Information Administration
29: American Public Power Association
30: Government Accountability Office 






1) U.S. Energy Firms Among Alleged Targets in China Hacking Charges
from Houston Chronicle by Eric Tucker (AP)


The United States has brought first-of-its kind cyber-espionage charges against five Chinese military officials accused of hacking into U.S. companies to gain trade secrets. According to the indictment, hackers targeted the U.S. nuclear power, metals and solar products industries and are accused of stealing trade secrets and economic espionage. The alleged victims are Alcoa World Alumina, Westinghouse Electric Co., Allegheny Technologies, U.S. Steel Corp., United Steelworkers Union, and SolarWorld, Attorney General Eric Holder said Monday. The charges have been described as unprecedented and dramatize a long-time Obama administration goal to prosecute state-sponsored cyber threats.


2) EPA Issues Rules to Protect Fish in Plant Cooling System

from Wall Street Journal by Alicia Mundy 


The Environmental Protection Agency on Monday issued long-delayed rules requiring companies to reduce the number of fish that are killed in the cooling systems of older power plants and factories, but stopped short of requiring them to use less water from rivers, lakes and oceans or to install specific new cooling technologies. Many power plants rely on water from adjacent waterways to cool their turbines. As large underwater pipes pull in the water, fish, larvae and shellfish are crushed against screens at the plants or sucked into equipment. Under the EPA rules, companies must implement steps to decrease the amount of fish killed, and can choose one of seven options for meeting "best technology available" requirements for reducing deaths of fish populations. The rules relieved the utility industry, but disappointed environmental groups who had been pushing for EPA regulations for years.


3) Pundits Weigh Risks, Benefits of Obama Himself Rolling Out Power Plant Rule

from E&E by Jean Chemnick


President Obama himself plans to roll out his administration's proposal next month for curbing greenhouse gases from existing power plants, U.S. EPA Administrator Gina McCarthy said today. The EPA chief confirmed in a Google+ hangout on the president’s climate agenda that Obama “indicated his intent” to announce the proposal himself -- something that she said showed his commitment to it. Greens say some direct involvement from the president would guarantee the proposal gets the attention it needs to win public support and counter opposition messaging by industry groups that the rules will drive up energy costs and damage grid reliability.


4) Oilfield Deaths Spur Safety Agency to Study Fracking


8) Shell Says Fossil Fuel Reserves Won't Be 'Stranded' By Climate Regulation

from Reuters by Michael Szabo


Royal Dutch Shell has dismissed the possibility that its proven oil or gas reserves will become unusable as a result of climate change regulation, saying fossil fuels will play a key role in global energy to 2050 and beyond. Environmental campaigners, activist investor groups and some lawmakers have warned that financial markets could be overvaluing companies with large fossil fuel assets, such as Shell, thereby creating a "carbon bubble" and putting at risk trillions of dollars in pension funds. Shell, however, played down such claims last week in a letter it said was in response to shareholder inquiries on the issue of "stranded" assets, referring to large investments in fossil fuel reserves that could become unprofitable if governments pass laws to curb runaway growth in greenhouse gas emissions in an attempt to reduce the impact of climate change.


9) Chesapeake Chasing ‘All-But-Forgotten’ Shale Assets

from Houston Chronicle by Collin Eaton 


Just a month after BP decided to take a $521 million hit to abandon its plans for the Utica Shale, Chesapeake Energy last week called the region its “newest world-class asset.” It was the second surprising determination that Chesapeake executives made this year on where the company could find its biggest future growth drivers. The first out-of-the-blue call came in February, when the Oklahoma City-based oil and gas producer told investors it would march back into the gas-rich Haynesville Shale in northwestern Louisiana, East Texas and southwestern Arkansas. The Utica, an Ohio shale play that operators originally believed would yield large bounties of pure oil, turned out to have much bigger deposits of natural gas and natural gas liquids. Chesapeake and others “whiffed” on the Utica a few years ago, but now the company believes it’s going to be “a big growth driver,” said Jason Wangler, an analyst with Wunderlich Securities in Houston.


10) Drones Give Energy Companies High Hopes for Safer Work

from Houston Chronicle by Ryan Holeywell


In the Alaskan tundra, inspecting a pipeline isn’t easy. Most pipelines don’t follow what few roads are there, so trucks often aren’t an option. And using low-flying airplanes can be unsafe to pilots in snowy, windy weather. Now, though, the emergence of sophisticated, pilotless aircraft is presenting energy companies with another possibility for keeping an eye on operations in the Arctic and other harsh environments where they often work. Unmanned aerial vehicles flying over pipelines while outfitted with special sensors could detect leaks quickly. And that’s not the only potential application. Energy companies are testing drones to inspect hard-to-reach spaces like refinery flare stacks, offshore platforms and even wind turbine blades in an effort to save time and boost worker safety.

11) BLM Opens Wyoming Drilling Review Amid Sage Grouse Concerns

from Natural Gas Intelligence by Richard Nemec

The federal Bureau of Land Management (BLM) has begun the environmental review process for a major proposed multi-year oil/natural gas drilling project in east-central Wyoming that could force federal authorities to adjust their current species and habitat protection requirements. BLM is taking comments through June 30. BLM on Thursday published a notice of intent to prepare a draft environmental impact statement (EIS) on a proposal from five exploration and production (E&P) companies to drill up to 5,000 oil/gas wells during a 10-year period. BLM would serve as the lead agency along with the U.S. Forest Service’s (USFS) Douglas Ranger District. The alert in the Federal Register acknowledged that the extensive plans by a combination of units of Anadarko Petroleum Corp., Chesapeake Energy Corp., RKI E&P LLC, Samson Resources and SM Energy may require amendments to the BLM’s Casper Resource Management Plan and the USFS’ Thunder Basin National Grasslands Land and Resource Management Plan. BLM said that "impacts are expected to exceed analysis thresholds set within the current planning documents."


12) U.S. Stock-Index Futures Little Changed Before Earnings




13) Gunmen Storm Libya Parliament as Violence Grips Oil Producer

Natural Gas


15) Pennsylvania Dems Choosing Among Four Gas-Tax Advocates Tuesday

from Politico Pro by Talia Buford


Pennsylvania Democrats will be voting on natural gas when they go to the polls Tuesday, even if they don’t really mean to. The Democrats on the gubernatorial primary ballot all support imposing some sort of severance tax on the state’s surging natural gas industry, with some or all of the money going toward one of the top issues among voters: education. The front-runner is Tom Wolf, the former state revenue chief who has taken a big lead in polls in recent months. He’s up against Philadelphia-area Rep. Allyson Schwartz, former White House Council on Environmental Quality Chairwoman Katie McGinty and state Treasurer Rob McCord.


16) Why China is Driving a Hard Bargain with Russia Over Gas

from Wall Street Journal by Wayne Ma


Russian President Vladimir Putin’s state visit to China this week has fueled speculation that both sides will finally reach a deal to supply Russian natural gas to China after a decade of wrangling. There are plenty of reasons Beijing and Moscow will finally see eye to eye. But an analysis of the situation shows they still have plenty of room to disagree. China and Russia have signed non-binding agreements before — most notably in 2009and in 2013 — where they ironed out details that included the construction of a pipeline to ship 38 billion cubic meters of gas annually to China from fields in eastern Siberia. However, neither side has ever agreed on pricing. xAnalysts say Beijing and Moscow have never been closer to a deal.



Utilities and Infrastructure


17) FERC Staff: Market Expects Higher Power Prices This Summer

from SNL by Glen Boshart


"Electric and natural gas market conditions this summer will reflect exceptional gas burn and storage withdrawals this winter, and the anticipation of a warmer-than-normal summer for much of the country," FERC staff said in presenting its annual summer energy market and reliability assessment during the agency's May 15 open meeting. In particular, staff noted that higher electricity forward prices reflect increases in natural gas forwards, and while futures are not a forecast of prices, "this signals market expectations for higher prices this summer." The good news, according to staff, is that forecast reserve margins are adequate across the country and that the possibility of a summer El Nino weather event may moderate temperatures and associated market impacts.

18) U.S. EPA's CO2 Emissions Rules Will be Difficult for RTOs: Study

from Platts by Andrew Moore 


Without the statutory ability to create a market-based mechanism to regulate carbon dioxide emissions from existing power plants, the US Environmental Protection Agency will likely issue state guidelines that could spell trouble for states that belong to regional transmission organizations, a consultant said Monday. Cliff Hamal, a managing director at Navigant Economics in Washington, DC, said that because "inside the fence" attempts to reduce CO2 emissions at power plants would be prohibitively expensive and drive up electricity costs, the EPA is looking at system-wide rules, such as mandates based on states' existing emissions profiles. But given the fact that electricity markets are different in each state, and that some states include unregulated merchant providers, it will be difficult to drive down emissions without a market-based approach, Hamal said.


19) Schneiderman Wants Utilities to Prepare for Climate Change

from Capital New York by Scott Waldman 


New York Attorney General Eric Schneiderman will propose legislation requiring the state's electric and gas utilities to prepare for climate change to prevent widespread power outages. The utilities would first have to assess their vulnerability to climate change, then document how they are mitigating those areas to protect infrastructure. Under the legislation, utilities would file a “Climate Change Impact Statement” to the state Public Service Commission that would be subject to public review and comment. Schneiderman is expected to unveil the proposal at an event tonight for the League of Conservation Voters, at Chelsea Piers in Manhattan.


20) Southern Co. CEO Mulls Entry Into New Markets

from E&E by Rod Kuckro

Southern Co. CEO Tom Fanning sees new business opportunities in what he likes to term "so-called organized markets" for electricity as well as the global licensing of the technology his company is deploying to gasify lignite coal and capture its carbon dioxide emissions. In a wide-ranging interview with EnergyWire last week, Fanning also spoke about Southern's strategy regarding solar power, the continuing role coal could play in electricity generation and cybersecurity. He further touted his company's part in promoting economic development throughout its utility service territories in Alabama, Florida, Georgia and Mississippi that serve 4.4 million customers. Southern once was thought of as a predominantly coal generator -- it accounted for 70 percent of generation in 2008. Today, of Southern's nearly 46,000 megawatts of capacity, just 36 percent of electricity is generated from coal, while 45 percent is natural gas, 17 percent is nuclear and 2 percent hydroelectric.




21) Brash Startup Hits Accelerator in Market for Small Reactors

from E&E by Hannah Northey

One company's loss might be another's gain in the topsy-turvy business of small modular reactors.

On the losing side at the moment is construction behemoth Babcock & Wilcox Co., which is slashing funding and possibly laying off hundreds of workers in Lynchburg, Va., after failing to find a majority investor in its Generation mPower small modular reactor. Charlotte, N.C.-based B&W has said it will spend up to $15 million on its Generation mPower small modular reactor beginning in the third quarter of this year, down from $80 million last year. The company also said it will be in discussions for the next two months with the Department of Energy about cost-share funds. At that time, workers who received layoff warnings will find out if they have a job in Lynchburg. B&W's decision is seen by some as a setback for small modular reactors (SMR) -- technology that the Obama administration has heralded as the evolution of the U.S. nuclear industry. 





22) EPA Mulls Ethanol Change as Industry Profits Soar

from Houston Chronicle (AP)


Just as ethanol producers have been seeing the industry’s most profitable months ever, the federal government is considering whether to lower the amount of the corn-based fuel that must be blended into gasoline. That could be a serious blow to a biofuels industry that saw booms and busts connected to corn and petroleum prices before a renewable fuel standard approved by Congress in 2007 acted as a stabilizing factor. The law, designed to reduce the nation’s reliance on foreign oil and cut automobile emissions, increased the amount of ethanol required to be used each year, setting the standard at 14.4 billion gallons of corn-based ethanol for this year. In November, however, the EPA proposed the first rollback since the standard was enacted, to 13 billion gallons.


23) Modi to Use Solar to Bring Power to Every Home by 2019





24) Trains and Crude Oil Are Too Often an Accident Waiting to Happen

from Los Angeles Times by Jayni Foley Hein


The fiery derailment in Virginia recently of a train transporting oil was the latest in a series of alarming accidents involving oil transport in North America in the last year. In 2013, more oil spilled from U.S. trains than in the previous four decades combined — and that doesn't include a Canadian spill that incinerated the downtown core of Lac-Megantic in Quebec last year, killing 47. We can expect such serious accidents to continue if immediate changes are not made. Nationally, the transport of oil by rail is on a steep upward trajectory, largely due to fracking in North Dakota and to drilling in Canada's Alberta tar sands. And much of the oil being transported is especially dangerous, containing high levels of extremely volatile and combustible vapors. In recent testimony before Congress, the rail industry made clear that many of the cars carrying this type of crude are not equipped to do so safely. California is in the cross hairs of this dangerous situation.


25) Climate Change is Real

from Houston Chronicle


The recent report on climate change from the U.N.-chartered Intergovernmental Panel on Climate Change is a sober reminder that what we as individuals happen to "believe" about global warming - unless we happen to be climate scientists - has absolutely no bearing on whether the phenomenon is a vast hoax perpetrated by 99 percent of the scientific community or a looming crisis that, as the report underscores, will affect everybody on this planet. Skepticism on most issues is, indeed, healthy, but in any number of areas, whether it's relying on M.D. Anderson for cancer treatment or a Texas A&M-trained civil engineering fund to erect bridges and skyscrapers, we have to trust the experts. So it is with measuring and assessing the evidence of climate disruption. As conservative columnist Michael Gerson pointed out in the Washington Post recently, "Our intuitions are useless here." The report from the scientists, economists and other experts on the IPCC panel is about as sobering as it can get. The panel warned that the planet is indeed warming, that humans are primarily responsible and that we are not anywhere near prepared for the dire consequences.


26) Why Electric and Natural-Gas Cars Will Gain Traction

from Wall Street Journal by Ariel Cohen


The natural gas abundance allows us to run fleets of trucks, buses, delivery vehicles like FedEx and even taxicabs. In turn, less gasoline is needed, including from Venezuela and the Middle East, but more U.S.-produced gas is powering our cars and trucks. Technology is also a limiting factor in extending the range, and diminishing the price, of a battery-powered car. Today Tesla Model S is approaching 300 miles with its heavy, most powerful battery lithium-iron. Better storage capacity is a must. Ten years from now at least the trendy and the affluent would boast their all-electric Google cars, wondering how have they lived before without them. After all, they will allow driving driverless along Los Angeles’ Route 5 while checking online portfolios and Facebook. And electric cars will be a blessing to over-polluted cities like Beijing. Sure, there will be also a status-symbol sex appeal to an electric Google car, and Larry David would shamelessly advertise it on the 2024 season of “Curb Your Enthusiasm.” Yet, such cars will be a blessing to many millions of the elderly and the disabled, if they can afford them.





27) Summer 2014 Energy Market Reliability Assessment

from Federal Energy Regulatory Commission


Electric and natural gas market conditions this summer will reflect exceptional gas burn and storage withdrawals this winter, and the anticipation of a warmer-than-normal summer for much of the country. The possibility of a summer El Nino may moderate temperatures and associated market impacts. CAISO markets face a deep drought, while market expansions in SPP and MISO enter their first summer period of operation. 


28) Permian Basin Drives First-Quarter Growth in Oil-Directed Horizontal Drilling Rigs

from Energy Information Administration 


The Permian Basin, a long time oil- and natural gas-producing region in West Texas and southeastern New Mexico, has seen a significant increase in horizontal oil-directed drilling activity over the past five months. This trend began at the start of 2013, and accelerated from the week ending on December 27, 2013, to the week ending on May 9, 2014. During this time, the number of horizontal, oil-directed rigs in the Permian Basin rose by 63 rigs, 50% of the total increase in the United States. This growth was heavily concentrated in counties in the Permian Basin containing formations with high production potential.


29) Markets Matter: Expect a Bumpy Ride on the Road to Reduced CO2 Emissions

from American Public Power Association by Navigant's Cliff Hamal 

First, the guidelines to be issued in coming weeks by the EPA concerning CO2 emissions from existing elextric generators are not expected to include the kind of nation-wide program that could send consistent and predictable price signals needed for market efficiency, because of statuory limitations on EPA's authority. Instead, EPA guidelines are expected to rely on the states to develop rules intended to shift generation away from high-emitting sources and reduce consumption. A system of such state-by-state rules will inevitably be less efficient than a unified approach. Second, the electricity markets in a large portion of the country currently operate with significant limitations that will impede the ability of the EPA to address CO2 emission reductions. The current problems are most apparent in regional electricity markets that rely on capacity markets to incent new investment. Those capacity markets are already floundering over  existing challenges and will be severely stressed by the added complexity of maintaining reliability while shifting to a lower CO2 emission portfolio. 


30) Better Direction and Management of Voluntary Recommendations Could Enhance U.S. Arctic Council Participation

from Government Accountability Office 


Six key federal agencies hold leadership roles in the Arctic Council and other agencies participate through the Council's working groups and task forces. The U.S. Department of State (State) leads this participation and collaborates with the five other key agencies that lead the delegations to Council working groups—the Environmental Protection Agency, National Nuclear Security Agency, National Oceanic and Atmospheric Administration, U.S. Fish and Wildlife Service, and U.S. Global Change Research Program—as well as other federal agencies with Arctic interests. In collaborating on Council work, the agencies face challenges by not having a clear direction or specific resources for their work. For example, key agency officials said that the agencies do not have a strategy that guides and aligns their Council work. Without a clear direction or specific resources for the collaborative effort, the agencies face challenges prioritizing the work, delivering unified messages to other Arctic States, and consistently participating in the Council.