From: Morning Consult
To: Scott Jenkins,
Subject: Morning Consult Energy: White House Greenhouse Gas Rule for Power Plants May Test Federal Laws; Senate Republicans Block Tax Break Extension
Date: Fri May 16 13:24:28 MDT 2014


By Emily Holden (@emilyhholden)



Today’s Washington Brief:

  • The Obama administration is considering cutting greenhouse-gas emissions from power plants by reaching beyond the plants themselves to achieve up to a 25 percent reduction, according to sources familiar with the discussions, Bloomberg reports. The unusual approach could require utilities to expand renewable energy, improve efficiency and encourage customers to use less power, testing federal laws. 

  • The EPA proposed a rule for oil refineries that would require more aggressive measures to reduce toxic emissions from flares, storage tanks and other sources, Houston Chronicle’s Matthew Tresaugue reports

  • Senate Republicans killed an $85 billion extension of expired tax breaks, including for wind power production, biodiesel and cellulosic biofuels, Politico Pro’s Darren Goode reports

Today’s Business Brief:

  • Electric utilities no longer have to collect $750 million per year from customers for a future nuclear waste dump that has never materialized, Los Angeles Times’ Ralph Vartabedian reports.The court-ordered suspension takes effect today.

  • The nation’s electric reliability organization is forecasting smooth sailing this summer, although supplies of coal and natural gas for generation may be tight this winter, SNL’s Esther Whieldon reports.

  • Eleven of the 23 states required by the Cross State Air Pollution Rule to reduce sulfur dioxide emissions already meet their targets for 2014, Andrew Moore at Platts reports


Today's Chart Review: 


AccuWeather Expects Below-Normal Atlantic Hurricane Season

from Natural Gas Intelligence, Weather Underground and NOAA




Mark Your Calendars (All Times Eastern): 


Friday: Environmental Law Institute discussion on Clean Air Act @ 9 am

Friday: Brookings Institution discussion on infrastructure @ 9:20 am 

Friday: Center for Strategic and International Studies discussion on U.S. as energy superpower @ 10 am

Friday: Fuel Cell and Hydrogen Energy Association briefing on resiliency and efficiency @ Noon  




1-7: General
8-14: Oil
15: Natural Gas
16: Utilities and Infrastructure
17-18: Coal
19-21: Nuclear 
22-23: Renewables




24: Los Angeles Times
25: Energy Collective 



26: North American Electric Reliability Corporation
27: CDP
28: American Gas Association 







1) Obama Said to Consider Power-Plant Rule That Tests Law


2) EPA Proposes Changes to Refinery Emission Rules
from Houston Chronicle by Matthew Tresaugue 


The Environmental Protection Agency on Thursday moved to require oil refiners to take more aggressive measures to reduce toxic emissions from flares, storage tanks and other sources. The federal agency said the proposed rules, which update existing standards for refineries, are intended to protect nearby neighborhoods from harmful pollutants. The proposed rules would require refiners for the first time to measure concentrations of cancer-causing benzene at their fence lines and provide the data to the public. The rules also would require refiners to upgrade pollution controls for storage tanks and to ensure that gases are properly destroyed through flaring.


3) NERC Foresees Constrained Gas, Coal Supplies This Summer in Otherwise Rosy Picture

from SNL by Esther Whieldon


The North American Electric Reliability Corp. is forecasting fairly smooth sailing this summer on the electric reliability front, although supplies of coal and natural gas for generation may be tight while companies bulk up their storage and do maintenance work on pipeline systems for the coming winter. The FERC-designated electric reliability organization, or ERO, also has ongoing concerns over how power plant retirements are chipping away at reserve margins in some areas and the U.S. is becoming more reliant on gas-fired generation, it said in its 2014 summer assessment released May 14. The ERO noted that the bulk power system is transforming in many ways. "Each summer, NERC has observed incremental changes in the resource mix, which has trended toward a generation base that is now predominately (i.e., almost 40%) gas-fired generation, an increase of 28% [from] five years ago," it said. "The continued wide-scale retirement of coal, petroleum, nuclear, and other baseload generation is largely being addressed by the addition of gas-fired and variable (e.g., wind, solar) resources."


4) Mexico’s Energy Reform Could Take a Bite Out of U.S. Shale-Gas Sellers, EIA Chief Says

from Houston Chronicle by Collin Eaton 


A top U.S. energy official said Thursday he’d like to get together with Mexican authorities and pour over natural gas production forecasts to understand how much Mexico’s energy reform may set back U.S. shale-gas sellers. Mexico’s sweeping policy changes are expected to boost the country’s oil and gas output by drawing contract bids from international oil companies and forming joint ventures between the state-run Pemex and private firms. “The U.S. is a pretty large exporter of natural gas to Mexico right now,” said Adam Sieminski, administrator of the Energy Information Administration, during the ninth annual Mayer Brown Global Energy Conference in Houston. “If shale gas, conventional gas or deep-water gas were developed in Mexico, then that would alter our forecast for how much shale gas the U.S. would be selling to Mexico."


5) CSAPR SO2 Targets for 2014 Already Met by 11 US states: Bentek Analysis

from Platts by Andrew Moore 


Some 11 of the 23 US states required by the Cross State Air Pollution Rule to reduce sulfur dioxide emissions already meet their final 2014 targets, and another four will be compliant by 2017 due to coal-fired plant retirements, analysis released Thursday by Platts unit Bentek Energy shows. While the US Supreme Court ruled in April in favor of the US Environmental Protection Agency's CSAPR rule, the emissions trading scheme remains in limbo until further legal questions are decided by a lower court. In addition, the EPA has stated it is reviewing the decision, that CSAPR's predecessor -- the Clean Air Interstate Rule -- remains in effect, and that no immediate action is expected.


6) U.S. Warns China Its Actions in Sea Disputes Are Straining Relations
from Reuters by Matt Spetalnick 


China's "provocative" actions in maritime disputes with its neighbors are straining ties with the United States, raising questions over how the world's two biggest economies can work together, a senior U.S. official said. The strong comments from Washington on Thursday come after deadly anti-China riots broke out in Vietnam in response to China towing an oil rig into a part of the South China Sea claimed by both Hanoi and Beijing. "This is raising some fundamental questions for us about China's long-term strategic intentions," the U.S. official told Reuters, speaking on condition of anonymity. He said Beijing's move appeared to fit a "pattern" of advancing territorial claims through coercion and intimidation.


7) U.S. Stock-Index Futures Decline Before Housing Report




8) First Responders Gear Up As More Trains Carrying Crude Oil Travel Through Their Communities

from Washington Examiner by Zack Colman 


One train each month used to travel through Scappoose, a town 20 miles northwest of here, a few years ago. In March, 14 trains did so, largely owing to a boom in U.S. oil production. Soon it will be 24 and, not long after that, possibly the mid-30s. For those keeping score, that's more than a 3,000 percent increase. In a region that's known more for the natural resources that grow above its soil than under it, that kind of number-counting is presenting challenges while also illuminating the scope of the changing U.S. energy landscape. "We've had more meetings with the railroad in the last year than in the 40 years of my career," Scappoose Fire Chief Mike Greisen told the Washington Examiner.


9) Beyond Keystone XL, More Pipelines with More Problems

from E&E by Elana Schor


Among the new conclusions the Obama administration added to the 1,000-plus pages of its final Keystone XL environmental review, one particular sentence carried a subtle but unmistakable air of portent. Observing that limited transportation options have depressed the price of heavy Canadian crude in recent years, the administration outlined several projects that America's neighbor to the north has pursued to open up new export markets for its ample oil sands fuel resources. Then, after repeating a warning from its draft KXL review about "significant opposition" to those pipelines, the State Department bureaucratically underlined the thought. "Nonetheless, all of the proposed pipeline projects within Canada have faced stringent political opposition and substantial regulatory uncertainty," State wrote. As the federal review of KXL drags through its fifth year, the contours of the lobbying battle over the pipeline are little-changed since a 2011 White House sit-in first pulled it from obscurity to totemic status for a resurgent environmental movement. But even in the growing shadow of their famous cousin, other pipelines proposed to boost oil sands crude are inching along more slowly than first anticipated and facing resistance on multiple fronts.


10) Offshore Industry Prepares for Hurricane Season

from Houston Chronicle by Ryan Holeywell


Meteorologists are predicting a mild hurricane season, but oil and gas companies with offshore operations are preparing carefully nonetheless. ImpactWeather, a Houston-based private weather forecaster that serves the industry, predicts nine named storms in the Atlantic this season, including four hurricanes. AccuWeather, another private weather provider, projects 10 named storms and five hurricanes. The National Oceanic and Atmospheric Administration makes its forecast next week. Chris Hebert, ImpactWeather’s lead hurricane forecaster, said while those broad seasonal forecasts generate headlines, they don’t matter much to the oil and gas industry. “For the most part, for the private industry, the forecast is a curiosity,” Hebert said. “There’s nothing different they do. It just takes that one hurricane coming into the Gulf,” he said, to do serious damage.


11) U.S. Senate Panel Backs Transport Bill to Maintain Funding

from Reuters by Eric Beech 


A U.S. Senate committee passed a six-year transportation bill on Thursday that would keep federal spending on highways and mass transit at current levels but does not tackle the looming shortfall in the Highway Trust Fund...Other committees in the Senate and House of Representatives are working on ways to pump money into the trust fund, which pays for about 45 percent of what U.S. states spend on roads and bridges and is forecast to run out of money by the end of August...Transportation Secretary Anthony Foxx warned this week that 700,000 jobs could be lost if Congress lets the trust fund run dry, which would hamper efforts to rebuild America's crumbling infrastructure. The gas tax that supports the fund hasn't been raised since 1993 and covers only about $35 billion a year of the approximately $53 billion in annual federal highway and mass transit spending. Since 2008, Congress has transferred about $54 billion from general tax revenues to the fund, which was intended to be self-sustaining. With Americans driving less and using more fuel efficient vehicles, the fund hasn't kept pace with spending.


12) Expert: White House Likely to Lift Oil Export Ban

from Houston Chronicle by Vicki Vaughan

The White House “will favor” lifting the nation’s 40-year-old ban on exporting oil, a leading energy expert said Wednesday at a symposium in San Antonio. Amy Myers Jaffe, executive director of energy and sustainability at the University of California, Davis, said she expects the administration to lift the ban on oil exports as a way to shield itself from criticism as it delays making a decision on the Keystone pipeline. “It’s not in our interest to hold our oil and gas inside our borders,” Jaffe said during the symposium, sponsored by locally based South Texas Money Management. “If we don’t export oil and gas from the United States, (it) is going to flow to Canada or Mexico as it’s already doing — and they’re going to export their oil and gas, and it’s going to be the same thing.” That’s because the nation has a free trade agreement with Canada and Mexico, she added, and “we’re not thinking about turning it off.”

13) Iowa GOP Plank Calls for Raising the Gas Tax

from Des Moines Register by Jennifer Jacobs


A call for a gas tax increase is one of the proposed new planks in the Republican Party of Iowa's platform - a stance that would represent a major shift if it's adopted next month. The current state platform says: "We oppose any increase in fuel taxes." The Des Moines Register obtained a copy of the proposed new one, which says: "We support a fuel tax increase solely allocated to the Rural Road Fund." The proposal likely reflects Iowa Gov. Terry Branstad's influence in a GOP power struggle within Iowa. The tentative state platform was crafted by the 16 Republican activists elected to the state platform committee. They met on May 10 to review the planks submitted from the four districts. The document faces a vote at the state convention on June 14. State transportation officials have warned that Iowa has been falling behind by about $215 million annually to meet the most critical needs on Iowa's road system.


14) Pipeline Leak Spews Oil Onto Los Angeles Street

from Wall Street Journal by Alexandra Berzon and Alison Sider


A pipeline leak in an industrial area here spewed as much as 20,000 gallons of crude oil into a street and a strip club early Thursday morning, closing nearby businesses and emitting a sharp odor. When responding to the incident, firefighters were confronted with a 20- to 50-foot stream of oil spraying against the side of an adults-only establishment called the Gentlemen's Club, said Los Angeles Fire Department spokesman Capt. Jaime Moore. "What appeared to be a lake of crude oil" had accumulated on the street outside the building, according to Capt. Moore, stretching a half-mile long and at some points measuring 2 1/2 feet deep.

The fire department initially estimated that about 50,000 gallons of oil had spilled, but later lowered its estimate to 10,000 gallons.

Natural Gas


15) Dominion LNG Export Project Clears U.S. Environmental Review


Utilities and Infrastructure


16) Operators Seek Technology Fixes for Power Mix's Metamorphosis

from E&E by Peter Behr


...What will the United States do, as its distributed energy systems with rooftop solar generation continue to expand? The issue, said Michael Howard, CEO of the Electric Power Research Institute, illustrates an emerging challenge for the grid as older coal-fired generators and some nuclear plants are replaced by distributed energy sources. Until this decade, grid planners and operators could predictably prepare for a set of power services that were essential for the grid's reliable operation. They ranged from frequency controls, including those that Germany must install, to voltage support and "reactive" power that generators or grid devices alternatively supply to the system and recover to bolster transmission flows. Most commonly, the big baseload generating plants, coal and nuclear, provided these essential "ancillary" and support services, sometimes simply absorbing the cost. Baseload plants, with their inertial strength from large, spinning turbines, were mechanically ideal for these support roles. But changes in the grid's structure mean those essential services can no longer be taken for granted, Howard said. 





17) Coal Miner Dies in Illinois, Is Third Industry Fatality This Week

from Wall Street Journal by Kris Maher 


A coal miner in southern Illinois was killed Wednesday, the third industry fatality this week in the U.S., federal officials said. The federal Mine Safety and Health Administration said the worker was crushed against the wall of the mine while helping to move a roof bolting machine. The machines are used to drive steel bolts several feet long into the roofs of coal mines, typically shale or sandstone, to anchor the overhead rock. The fatality is the sixth in the U.S. coal mining industry this year, compared with 20 in all of 2013.


18) Turkish Police Fight Protesters After Deadly Mine Accident





19) Tiny Nuclear Waste Fee Added Up to Billions

from Los Angeles Times by Ralph Vartabedian 


A charge for electricity that millions of Americans didn't even know they pay will suddenly disappear Friday, after the Energy Department this week quietly notified utilities across the country that it was suspending its fees for a future nuclear waste dump. The Energy Department has been collecting $750 million from electricity bills every year for such a dump since 1983, putting it into a trust fund that now contains $31 billion.

The court-ordered suspension may be a modest victory for consumers, but it reflects the government's failure over the last 40 years to get rid of what is now nearly 70,000 metric tons of highly radioactive spent fuel, accumulating at 100 nuclear reactors across the nation.


20) Uranium Slides as Banks Reduce Outlook Amid Japan Delays


Delays in restarting Japan’s nuclear reactors are prolonging a uranium supply glut that’s driven prices to an eight-year low, making banks from UBS AG to Credit Suisse Group AG less bullish on the fuel. Uranium dropped to $29 a pound on May 2, the lowest since June 2005 and extending this year’s drop to 16 percent, according to TradeTech, a Denver, Colorado-based consultant to the nuclear industry. UBS reduced its 2014 forecast by 9 percent last month as Credit Suisse cut its projection by 7 percent. Kansai Electric Power Co. (9503) and other utilities are taking longer than expected to restart reactors that closed after the Fukushima disaster in March 2011 as Japan’s nuclear regulator seeks more safety checks. While producers from Australia to Africa shut mines as prices retreated to unprofitable levels,Raymond James Ltd. is among those who say supply will still outstrip demand this year.


21) Iran Slow to Answer Nuclear Questions

from Wall Street Journal by Laurence Norman 


Western officials are voicing concerns that slow progress in Iran's discussions with the United Nations atomic agency could harm negotiations on a comprehensive nuclear deal. Thursday marked a deadline for Iran to provide detailed information on its past work on detonators that the International Atomic Energy Agency says could be used to explode a nuclear weapon. Tehran has provided some information but the agency still has a series of outstanding questions, according to people familiar with the talks. Iran, which denies its nuclear program is anything but peaceful, also hasn't agreed to a new list of issues about its past nuclear work that the IAEA wants it to address over the next three months, these people say. Iranian foreign ministry officials didn't respond to requests for comment.





22) Extenders Bill With Renewable Credit Fails in Senate

from Politico Pro by Darren Goode 


Senate Republicans killed a massive $85 billion extension of expired tax breaks that included a renewable electricity production tax credit because of the ongoing dispute with Senate Majority Leader Harry Reid over offering amendments. In a 53-40 vote, the Senate fell short of the 60 votes needed on a procedural move to officially bring up for debate the bipartisan measure that had been widely supported in the Finance Committee. Every Republican but Mark Kirk of Illinois opposed the measure, which was a necessary precursor to another vote early next week on a motion by Reid to limit overall debate and block amendments.


23) Climate Change Poses Threat to Northwest Electricity

from Washington Examiner by Zack Colman 


The snowpack along the Columbia River Basin isn't what it used to be, and that's creating problems for the Bonneville Power Administration. "Average hasn't really been average," Michael Hansen, a Bonneville Power Administration (BPA) spokesman, said of the federal utility's water levels during an interview at the administration's Portland office. Hydropower is a major presence in the Northwest, as is BPA, which provides one-third of the region with electricity. The Energy Department has big plans for hydropower. Energy Secretary Ernest Moniz announced last month that the agency identified 65 gigawatts of undeveloped potential and that it hopes to double U.S. hydropower capacity by 2030. But hydropower is looking different than it ever has because of climate change. Warmer weather has shifted the peak runoff period for BPA a month earlier, from April through August to March through July. Snowpacks are lighter. Rainfall is heavier. Water levels will be lower year round, even as temperatures rise.





24) Op-Ed Memo to Stanford: Don't Attack Coal, Attack Carbon — with a Tax

from Los Angeles Times by Frank A. Wolak 


Last week, Stanford's Board of Trustees announced that the university would not directly invest funds from its endowment in coal mining companies. Even the strongest advocates of this action acknowledge that it is a symbolic gesture with little direct effect on the coal industry or global greenhouse gas emissions. But if a university administration wants to take symbolic (or real) action on climate change, is coal divestment a wise choice? Casting climate change mitigation as a moral crusade rather than a difficult public policy challenge is problematic. Casting climate change mitigation as a moral crusade rather than a difficult public policy challenge is problematic. Mining and burning coal indeed lead to serious environmental impacts. Some of these can already be dealt with cost-effectively; others cannot — at least not yet. But unlike past targets of divestment — such as apartheid in South Africa and, arguably, tobacco companies — coal also produces something of great value, in the form of energy and energy-derived products that we all benefit from...There is wide agreement that the most cost-effective way to reduce the carbon content of the energy services we consume is to set a price for greenhouse gas emissions.


25) Money for Nothing?

from The Energy Collective by Severin Borenstein


Since the beginning of electricity grids, demand has fluctuated and supply has been made to follow along. But for decades, economists and some grid engineers have dreamed of having demand play a more active role in balancing the system.  With increasing use of intermittent renewable energy resources, now is the time to make that demand-response dream come true.  But we can only get there if we get past a common misconception in the world of electricity policy: Paying customers to reduce their demand – such as through the common Peak-Time Rebates (PTR) — is not the same as time-varying electricity prices.  PTR is a very inefficient alternative to charging time-varying rates that reflect the true time-varying cost of electricity. Despite the flaws, PTR programs, and their close cousin aimed at businesses — demand bidding programs — are growing.  In California, PG&E, Southern California Edison, and San Diego Gas & Electric have demand bidding.  PTRs are in Maryland, in New Orleans, in Ohio, and many other parts of the country. What’s wrong with paying for demand reduction?  Where to start. No, I mean that literally, where to start? What’s the baseline level from which you start paying for reduction?  In nearly all programs, baselines are based on the customer’s consumption in the recent past, usually on other high-demand days. But such “endogenous” baseline setting distorts incentives for conservation. 




26) 2014 Summer Reliability Assessment

from North American Electric Reliability Corporation


The 2014 Summer Reliability Assessment shows that peak demand forecasts are flat compared to last year, which also results in sufficient reserve margins needed to maintain BPS reliability. However, NERC continues to monitor the overall changes to the BPS’s resource mix and the operating characteristics of different types of resources. For example, in New England, a large natural gas-fired generation portfolio has created challenges in ensuring that natural gas can be supplied and transported to all generators that are needed to maintain electric reliability. Much of the focus on electric and gas interdependencies targets conditions during the winter season when the availability of natural gas for electric generators competes with the high demands of residential heating. However, the summer season presents a separate set of concerns regarding gas availability. Specifically, natural gas storage facilities are refilled during the summer season while several pipelines and pipeline compressor stations are also undergoing maintenance.


27) Major Public Companies Describe Climate-Related Risks and Costs

from CDP


Findings show that S&P 500 companies assess physical risks from climate change to be increasing in urgency, with physical disruptions and cost impacts already being felt:

  • 45% of risks were described by companies as current or predicted to fall within the next 1-5 years in 2013, up from 26% in 2011.
  • 50% of the risks disclosed were described as more likely than not to virtually certain in 2013, up from 34% in 2011.
  • 68% of the disclosed physical risks were direct to operations in 2013, up from 51% in 2011.


28) Natural Gas Market Indicators Report

from American Gas Association 


NYMEX futures for June 2014 natural gas retreated after the Energy Information Administration’s May 8 underground storage report, which came in with slightly higher net injections than many analysts expected. Prompt month pricing is now in the $4.40s, while WTI and Brent crude still dance about $8 apart at about $102 and $110 per barrel, respectively. Weather – a new report from the National Oceanic and Atmospheric Administration’s (NOAA) Climate Prediction Center has issued an El Niño watch, indicating that the chance of an event has increased for the remainder of the year and now exceeds 65 percent during this summer. El Niño is an anomalous event occurring about every two to seven years and is characterized by warmer sea surface temperatures in the Pacific Ocean that potentially lead to, among other things, more precipitation in the US southwest and cooler temperatures in the southeast. Working Gas in Underground Storage – the Energy Information Administration projects domestic storage injections this year of about 90 Bcf per week (nearly 13 Bcf per day) on average, leading to working gas inventories that may be 3.4 Tcf when the winter heating season begins in November 2014. This comes from their latest “Short-Term Energy Outlook” published in early May. Meanwhile, inventories in storage now total 1,085 Bcf for the week ending May 2 following an injection of 74 Bcf. For the first time in seven weeks stocks are above 1 Tcf. The weekly storage report for the week ending May 9 shows volumes in storage at 1,160 Bcf following an injection of 105 Bcf, bringing inventories to 40.5 percent below the five-year average.