By Meghan McCarthy (@MeghanMcCarthy_)
Today’s Washington Brief:
Energy Secretary Moniz told reporters in Seoul that the US is actively considering relaxing crude oil export restrictions. In-Soo Name at the Wall Street Journal reports.
Reuters' Cezary Podkul and Jeff Mason take a deep dive into the lobbying behind the EPA's proposal to drop the amount of ethanol blended into gasoline. They found the Carlyle Group and Delta Airlines were some of the most effective groups pushing for an ethanol reduction.
- After Republicans blocked an energy efficiency bill in the Senate, the chamber is poised to take up tax extenders legislation today that includes the wind production tax credit.
Today’s Business Brief:
- The New York Times' Clifford Kraus and Ian Austen cover the tough road ahead for oil pipelines running from the east to the west in Canada, even as the U.S. federal government delays a decision on the Keystone XL pipeline.
- Texas holds its first hearings on whether injections from fracking are connected to earthquakes in the region. From Platts by Jim Magill.
Today's Chart Review:
Updated Guidance, Increased Coordination, and Comprehensive Data Could Improve BLM
Mark Your Calendars (All Times Eastern):
Tuesday: ACEEE energy efficiency finance forum @ 8:30 am
Tuesday: Association of Climate Change Officers Climate Strategies Forum @ 8:30 am
Tuesday: Resources for Future forum with Exelon CEO on changes impacting utilities @ 12:45 pm
Tuesday: United States Energy Association discussion on natural gas exports @ 10 am
Tuesday: Senate Energy hearing on nominations @ 10 am
Tuesday: Politico Pro discussion on energy issues in the midterm elections with Hoeven, Manchin @ Noon
Tuesday: Resources for the Future forum on utility changes @ 12:45 pm
Tuesday: Senate Environment hearing on polluted transportation infrastructure stormwater runoff @ 3 pm
Wednesday: Association of Climate Change Officers Climate Strategies Forum @ 8:30 am
Wednesday: Senate Environment hearing on decommissioning nuclear reactors @ 10 am
Wednesday: House Natural Resources hearing on critical habitat designations @ 11 am
Wednesday: Woodrow Wilson Center discussion on demography and climate change @ 3 pm
Wednesday: Institute of World Politics lecture on securing critical infrastructure @ 6 pm
Thursday: Atlantic Council forum on carbon capture and storage @ 8:30 am
Thursday: ICF International forum with Energy Information Administration outlook discussion @ 8 am
Thursday: Stafford Centre annual hurricane symposium in Houston @ 10 am
Thursday: Library of Congress lecture on biological consequences of nuclear disasters @ 11:30 am
Thursday: Woodrow Wilson Center discussion on national security and risks of climate change @ 1 pm
12: Natural Gas
13: Utilities and Infrastructure
OPINIONS, EDITORIALS, PERSPECTIVES
17: Wall Street Journal
18: New York Times
19: Washington Post
RESEARCH REPORTS, ISSUE BRIEFS, CASE STUDIES
20: International Energy Agency
21: Government Accountability Office
1) US Senate Republicans Block Energy Bill, Forfeit Keystone Vote
from Reuters by Thomas Ferraro and Timothy Gardner
U.S. Senate Republicans on Monday blocked an energy-efficiency bill backed by manufacturers and environmentalists, forfeiting a chance to vote on the long-delayed Keystone XL oil pipeline. On a nearly party-line vote of 55-36, President Barack Obama's Democrats fell short of the 60 votes needed to advance the bipartisan energy bill supported by the White House. Senate Majority Leader Harry Reid, a Nevada Democrat, had offered a vote on a separate bill to take the final decision on Keystone out of Obama's hands and give it to Congress if Republicans allowed passage of the energy bill. But Republicans refused. They complained that Reid barred them from offering amendments to the bill, including one that would have reined in emissions-cutting regulations on coal-fired power plants, a top strategy in Obama's fight against climate change.
2) U.S. Considers Relaxing Crude Oil Export Restrictions
from Wall Street Journal by In-Soo Nam
The U.S. is considering relaxing regulations that ban the export of crude oil as domestic production grows and the quality of some of the crude produced in the country isn't suitable for refining locally, U.S. Energy Secretary Ernest Moniz said Tuesday. "The issue of crude oil exports is under consideration…A driver for this consideration is that the nature of the oil we're producing may not be well matched to our current refinery capacity. So, there is a study going on involving multiple agencies. Naturally, the Department of Commerce is that one that has the responsibility for those determination," Mr. Moniz said at a media briefing after a two-day energy conference in Seoul.
3) Ukraine Boosts Russian Gas Imports as Gazprom Deadline Looms
from Bloomberg by Elena Mazneva
Ukraine increased imports of Russian natural gas to fill storage tanks as state-run exporter OAO Gazprom (GAZP) threatened to halt shipments without upfront payments. Ukraine took the most Russian gas since February on May 11, according to the Energy Ministry in Moscow. Imports are running at more than four times their average at the same time last year as Ukraine, prepares for possible disruptions. Gazprom sent Ukraine a bill today for the gas Russia’s neighbor is expected to use in June. Unless some payment is received before June 2, supplies will stop the next day, company spokesman Sergei Kupriyanov said in Moscow today.
4) China Says Vietnam Efforts to Rope in Others on Spat Will Fail
from Reuters by Ben Blanchard
China's foreign ministry said on Monday Vietnam's efforts to garner support over a territorial dispute in the South China Sea would fail, a day after Southeast Asian leaders meeting for a regional summit in Myanmar refrained from criticising Beijing. Tensions rose in the resource-rich South China Sea last week after China positioned a giant oil rig in an area also claimed by Vietnam. Each country accused the other of ramming its ships near the disputed Paracel Islands.
5) U.S. Index Futures Rise After Record Close
from Bloomberg by Corinne Gretler
U.S. stock-index futures advanced, following record levels for equity benchmarks yesterday, as investors awaited a report on retail sales. … Futures on the Standard & Poor’s 500 Index (SPX) expiring next month added 0.2 percent to 1,896.3 at 7:42 a.m. in New York. U.S. stocks climbed yesterday, with the S&P 500 closing at 1,896.65, as Internet and small-cap shares rallied amid a resurgence in deal-making activity. Dow Jones Industrial Average contracts increased 32 points, or 0.2 percent, to 16,687 today.
6) Oil Futures Buoyed by Concerns About Russian Supplies
from Wall Street Journal by Nicole Friedman
Oil futures rose Monday on concerns that the West could impose sanctions on Russia's energy sector in response to the deteriorating situation in Ukraine. Light, sweet crude for June delivery settled up 60 cents, or 0.6%, at $100.59 a barrel on the New York Mercantile Exchange. Brent crude on the ICE futures exchange rose 52 cents, or 0.5%, to $108.41 a barrel, its highest settlement price since May 2.
7) New Projections Show Oil Production Soaring as Rigs Boost Efficiency
from Fuelfix by Simone Sebastian
Oil production will continue to soar in the six major U.S. shale plays, with more barrels pumped per rig, according to federal projections released Monday. Total oil production in the six regions is expected to grow to 4.43 million barrels per day in June, an increase of 75,000 barrels per day compared to May, according to the U.S. Energy Information Administration. The federal agency expects oil rigs will produce an average of 271 barrels per day each, an increase of one barrel over May. The projection reflects the growing efficiency of rigs since the U.S. energy boom began. In June 2007, each rig produced an average of just 116 barrels per day in the most efficient region, the Bakken Shale.
8) Rocky Road for Canadian Oil
from New York Times by Clifford Kraus and Ian Austen
With TransCanada’s Keystone XL pipeline snarled in a regulatory and legal struggle south of the border, Canadian oil companies are proposing many new and expanded pipelines that would connect the oil sands fields with new markets in China and across the world. The planned projects that would snake east and west as well as south, could break the virtual United States monopoly market for Canadian oil exports, and enable oil sands production to climb by more than 25 percent in the next decade even if the Keystone pipeline is ultimately blocked. “The regulatory uncertainty and political decisions in the United States have absolutely increased Canadian resolve to get to global markets for our oil,” said Brian Ferguson, chief executive of Cenovus Energy, one of Canada’s leading oil companies. But there are many hurdles to clear.
9) Chevron First Major Oil Producer Seeking Pemex Partnerships
from Bloomberg by Adam Williams
Chevron Corp., the world’s third-largest energy company by market value, became the first major international oil producer to reveal partnership plans with state-run Petroleos Mexicanos since Mexico signed landmark legislation to reopen its doors to foreign producers. Chevron, which operates several rigs on the U.S. side of the Gulf of Mexico, is in talks with Mexico City-based Pemex for exploration opportunities in deepwater, shallow water or shale, Ali Moshiri, Chevron’s president of Latin America and Africa, said today during a conference in Mexico City. Chevron produces more crude in the U.S. section of the Gulf of Mexico than anyone except Royal Dutch Shell Plc and BP Plc, according to the U.S. Interior Department.
10) House Panel Seeks Briefing on DOE’s Oil Reserve
from The Hill by Timothy Cama
House Energy and Commerce Committee leaders sent a letter Monday to Energy Secretary Ernest Moniz, asking him and his staff to brief them on recent developments with the Strategic Petroleum Reserve (SPR). The reserve was created in Texas and Louisiana during the 1970s energy crisis and can hold 727 million barrels of crude oil, which can be released or sold when needed. Some recent decisions by the Department of Energy (DOE) in its management of the reserve have top Republican lawmakers on the committee asking for more information. The DOE announced a test sale of reserve oil in March, the first time it has done such a sale since 1990. It planned to sell 5 million barrels of oil over a 30-day period.
11) Oil Man George Kaiser Proposes Increase in Oklahoma Oil-and-Gas Tax
from Wall Street Journal by Daniel Gilbert
Oklahoma oil man George Kaiser is breaking with fellow energy executives in asking the state to raise taxes on oil companies, including his own. "Oklahoma is in desperate financial circumstances," says the billionaire philanthropist, who controls closely held Kaiser-Francis Oil Co. A higher tax on oil-and-gas production could help the state pay for education and much needed infrastructure improvements, he says in a prepared statement. Raising the production tax "doesn't move the needle in the decision to drill." Many of Mr. Kaiser's competitors beg to differ.
12) Texas Holds First Hearing on Suspected Injection-Earthquake Link
from Platts by Jim Magill
Texas lawmakers on Monday for the first time began to address whether oil and gas activity is connected to a recent spate of minor earthquake activity in the Barnett Shale region of North Texas. In a hearing in Austin, members of the Texas House Energy Resources Subcommittee on Seismic Activity heard testimony from representatives of the Texas Railroad Commission and the oil and gas industry, geoscientists, two North Texas mayors and others. The hearing was preliminary as the legislature, which meets every two years, will not be back in session until January. Much of the testimony surrounded the suspected correlation between saltwater disposal wells used by oil and gas drillers to dispose of wastewater from drilling and hydraulic fracturing and an increase in seismic activity in a part of the country unused to such occurrences.
Utilities and Infrastructure
13) US FERC Largely Approves PJM’s Changes to Demand Response Program
from Platts by Bobby McMahon
PJM Interconnection has largely received Federal Energy Regulatory Commission approval for a raft of changes the grid operator said will result in the more efficient and flexible use of demand response, rejecting challenges from a host of market participants to various aspects of the proposal. FERC's order approving the proposed changes "improves the operational value of demand response, supports long-term resource adequacy and treats demand response comparable to generators," PJM spokesman Ray Dotter said Monday.
14) The World Needs More Clean Coal, or We’re Screwed
from Time by Bryan Walsh
The growth of renewable energy has gotten a lot of attention recently — and with good reason. … But as a new report from the International Energy Agency (IEA) makes clear, the numbers simply don’t back those dreams up. The global increase in coal-fired power generation has been bigger than that of all non-fossil fuel sources combined. And that’s not a recent change — coal has been outpacing non-fossil sources for 20 years, and coal now supplies about 40% of the world’s electricity needs. Six out of ten coal plants built over the past decade use the least efficient combustion technology, which means they emit even more pollution and carbon emissions then they should.
15) NRC Orders New Earthquake Risk Analyses at 21 Nuclear Plants
from Nuclear Street
The Nuclear Regulatory Commission on Friday released a preliminary list of nuclear plants that will require detailed seismic analyses as part of the agency's response to the Fukushima Daiichi accidents in Japan. The NRC said it has prioritized analyses at 21 plants in the central and eastern U.S. based on updated earthquake hazard information. The agency made a point to note, though, that all have significant safety margins beyond current assumptions about their sites' potential seismic activity. "We’re confident the plants are safe to continue operating. If a plant’s new hazard exceeds the original design, the plant has to do a detailed analysis to determine any changes in accident risk from a quake. Plants must also do shorter-term work to see if they should enhance key safety equipment," Eric Leeds, director of the NRC’s Office of Nuclear Reactor Regulation, said in a release.
16) How ‘Big Corn’ Lost the Ethanol Battle to Philadelphia Refiners
from Reuters by Cezary Podkul and Jeff Mason
Six months ago the U.S. oil industry scored a surprise win against farm groups when the Obama administration proposed slashing the amount of ethanol refiners must blend into gasoline, a move that could save them billions of dollars. Stunned by the reversal, producers of the corn-based biofuel and their supporters are now fighting back ahead of a June deadline for the Environmental Protection Agency (EPA) to make a final decision on the cut. The clash has been portrayed as a battle between "Big Oil" and "Big Corn," two powerful and deep-pocketed lobbies. But a Reuters review of public records and interviews with lawmakers, lobbyists and executives reveals a more complex picture.
OPINIONS, EDITORIALS, PERSPECTIVES
17) Exposing the EPA
from Wall Street Journal by Editorial Board
A basic precept of American democracy is that petitioners before their government receive a full and fair hearing. The Obama Environmental Protection Agency is in urgent need of that remedial civics lesson. The EPA inspector general's office last week announced it will investigate the agency's February decision to commence a pre-emptive veto of the Pebble Mine project, a jobs-rich proposal to develop America's largest U.S. copper and gold mine in southwest Alaska. EPA Administrator Gina McCarthy says her decision to strike down Pebble before it received a hearing shouldn't worry other developers because Pebble is a "unique" threat. She needs to say this because the truth might chill billions of dollars in investment in the U.S.
18) Smarter Electricity in New York
from New York Times by Editorial Board
In one of the most promising moves in the energy sector in years, New York State is proposing a way to get a head start on, and perhaps help lead, a revolution in the world of electricity generation. Starting this week, the main players in the state’s complex electricity business will be asked to comment on a new report from the state’s Public Service Commission that envisions more efficient and climate-friendly ways to produce electricity. “Business as usual just doesn’t cut it anymore,” said Audrey Zibelman, the commission’s chairwoman. By the end of the year, she said, the commission hopes to produce new “rules of the road for utilities.”
19) Marco Rubio Makes a Wrong Turns on Climate Change
from Washington Post by Editorial Board
Sen. Marco Rubio (Fla.), whom many presume to be a contender for the 2016 Republican presidential nomination, said two things Sunday about climate change. Only one could fit into a presidential campaign worth taking seriously. “Our climate is always changing,” he said on ABC News’s “This Week.” “I do not believe that human activity is causing these dramatic changes to our climate the way these scientists are portraying it,” he went on to say, “and I do not believe that the laws that they propose we pass will do anything about it, except it will destroy our economy.” In previous interviews, at least Mr. Rubio acknowledged that “a significant scientific consensus” attributes measured global warming to human activity before he lodged various criticisms.
RESEARCH REPORTS, ISSUE BRIEFS, CASE STUDIES
20) The Electrified Future: Sustainable, Secure Systems
from International Energy Agency
Electricity is increasingly at the core of global energy system, but much like the IEA saw with oil security upon its founding 40 years ago, the warning is clear: only a strategic approach to develop an economic, secure and clean electricity system can meet surging demand and limit carbon emissions. Electricity has many advantages in a low-carbon future: it emits no carbon dioxide (CO2) at the site where it is consumed; it can power large and small machines; and end-users need not stockpile it. But it is hardly carbon-free, contributing more than 13 giga tonnes of CO2 emissions in 2011.
21) Updated Guidance, Increased Coordination, and Comprehensive Data Could Improve BLM
Federal and state agencies in states that GAO reviewed have taken or initiated some actions to change rules, in part, as a response to certain technological advances that have led to more than a 5-fold increase in annual production of domestic onshore oil and gas from shale and tight sandstone formations from 2007 through 2012 (see figure). For example, the Bureau of Land Management (BLM)—the key agency responsible for managing and overseeing oil and gas development on federal and Indian lands—proposed a new rule in 2012 to regulate hydraulic fracturing. In addition, in 2013, Texas updated its rules for well integrity by establishing new casing and cementing standards.