By Meghan McCarthy (@MeghanMcCarthy_)
Today’s Washington Brief:
Today’s Business Brief:
- Recent spills from trains carrying oil have increased scrutiny of moving crude on the rails, but a quick fix isn't available, Meghan McCarthy reports for the Morning Consult. Another oil train spill made news this weekend in Colorado, the AP reports.
- Russia increased Ukraine's gas bill as the battle over sovereignty shifts to the economic playing field, the New York Times reports.
Today's Chart Review:
Industrial Electric Customers
from Energy Information Administration
Mark Your Calendars (All Times Eastern):
Monday: ACEEE energy efficiency finance forum @ 8 am
Association of Climate Change Officers Climate Strategies Forum @ 8:30 am
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
14-15: Natural Gas
16: Utilities and Infrastructure
OPINIONS, EDITORIALS, PERSPECTIVES
19-20: Wall Street Journal
21: LA Times
22: New York Times
RESEARCH REPORTS, ISSUE BRIEFS, CASE STUDIES
23: National Bureau of Economic Research
24: Department of Transportation Inspector General
1) US Takes First Step Toward Fracking Disclosure Rules
from Reuters by Valerie Volcovici
The Obama administration announced its first steps on Friday toward possibly tighter regulation of hydraulic fracturing, or fracking, seeking public input on whether companies should be required to disclose the contents of fluids used in the oil and natural gas drilling technique. The U.S. Environmental Protection Agency said it would gather public comment for 90 days on whether to require chemical manufacturers to disclose the contents of fluids they inject into shale seams to release trapped oil or gas. Fracking technology has sparked a boom in U.S. energy production, but critics worry that it is polluting drinking water supplies. The environmental group Earthjustice petitioned the EPA to consider the rules on fracking fluids.
2) Obama Scores Third Court Victory in Air Pollution Fight
from Bloomberg by Sophia Pearson and Jim Efstathiou Jr.
The Obama administration scored a third legal victory in less than a month in its fight to cut air pollution as regulators prepare rules to reduce emissions from power plants. In a unanimous decision, the U.S. Court of Appeals in Washington said the Environmental Protection Agency was within its discretion to tighten standards on fine particulate matter, or soot, from coal power plants, refineries, manufacturers and vehicles. The court struck down a challenge by the National Association of Manufacturers, which said the rule overreached. The administration has now defeated challenges to pollution rules three times since mid-April, as the Supreme Court and the U.S. Court of Appeals tossed aside industry objections and gave the EPA broad leeway to set standards.
3) Obama Makes Wal-Mart an Example to Push Energy Efficiency
from Bloomberg by Angela Greiling Keane
President Barack Obama held up Wal-Mart Stores Inc. (WMT) as an example as he seeks public support for an energy and environment initiative that’s been met with skepticism from business groups and Republicans, who say it will kill jobs. Speaking at one of the company’s outlets today in Mountain View, California, Obama announced a set of plans to promote energy efficiency and solar power use, including upgrading government buildings. Wal-Mart’s commitment to renewable energy shows there are “cost-effective ways to tackle climate change and create new jobs,” he said. “It will be good for the economy long-term. And if we don’t, that will be bad for the economy” because of the impact of global warming.
4) Obama Lays Out Proposals on Cutting Carbon Pollution
from Wall Street Journal by Colleen McCain Nelson
President Barack Obama on Friday trumpeted new executive actions and public- and private-sector commitments aimed at cutting carbon pollution and improving energy efficiency, saying that climate change is real and must be addressed now. In a speech at a Wal-Mart store in Mountain View, Calif., the president laid out a list of clean-energy objectives he can accomplish without Congress's help and touted corporate pledges to expand the deployment of solar power. He lamented the lack of cooperation from lawmakers on clean-energy issues but said he would make sure the federal government does its part. "Unfortunately, Congress has not always been as visionary on these issues as we would like. It can be a little frustrating," said Mr. Obama, who was flanked by an assortment of Wal-Mart clothing and kitchenwares.
5) Is the Senate Doomed to Fail on Energy Policy?
from Washington Examiner by Zack Coleman
As an energy-efficiency bill heads toward collapse in the Senate, lawmakers and analysts are wondering: If the world's greatest deliberative body cannot pass legislation on energy efficiency, what can it pass? And what will it take? … In many ways, what has dogged the bill co-sponsored by Sens. Jeanne Shaheen, D-N.H., and Rob Portman, R-Ohio, for three years is due to sink it again, possibly as soon as Monday. Republicans wanted to load the measure up with energy amendments on key items for their members. Democrats did not find those amendments germane to energy efficiency, so Senate Majority Leader Harry Reid, D-Nev., blocked them. Reid had offered a standalone vote on whether to approve the Keystone XL oil sands pipeline, which he said was as far as he was willing to go. That, too, is now unlikely to occur.
6) Russia Ratchets Up Ukraine’s Gas Bills in Shift to an Economic Battlefield
from New York Times by Steven Erlanger
Gazprom, the natural gas giant 50.01 percent owned by the Russian government, keeps ratcheting up the bill for Ukraine, increasing the economic pressure on Kiev in tandem with military pressure along Ukraine’s eastern border. What Gazprom executives now say Ukraine owes them comes to more than $22 billion. In early March, Gazprom put the bill at less than $2 billion. How Gazprom now calculates its charges explains a lot about the way the company is used by the Kremlin for political purposes. Behind the payment demands was a warning that Gazprom would cut off gas supplies to Ukraine, which it has done at least twice before, in 2006 and 2009, over political and financial disputes. And behind that warning is one to European countries that largely depend on Russian gas supplies moving through Ukraine.
7) Pro-Russian Separatists Declare Victory in East Ukraine Vote
from Wall Street Journal by James Marson, Philip Shishkin and Alan Cullison
Pro-Russian separatists in eastern Ukraine declared victory in a secession referendum Sunday, ratcheting up tensions between the West and Moscow, which by recognizing the results could push the country toward a breakup. Ukraine called the vote illegal and riddled with irregularities, and part of a wider campaign by Moscow to punish Kiev for pursuing closer relations with Europe. … The U.S. and European allies have stressed the importance of Ukraine's coming presidential elections, and the State Department warned Moscow that "if it continues to destabilize eastern Ukraine and disrupt this month's presidential election, we will move quickly to impose greater costs on Russia."
8) In the Deep, China Can Now Go It Alone
from Wall Street Journal by Simon Hall
China honed the skills it is now trying to deploy in disputed waters off Vietnam by working with or buying companies that had mastered deep-water technology. It also spent heavily on developing its own sophisticated offshore equipment, of which the rig at the heart of the China-Vietnam standoff is a crown jewel, illustrating that China can now largely go it alone—developing oil or gas reserves far under water without relying heavily on foreign partners. … In the past, China offered foreign companies the right to explore in the South China Sea as it lacked the equipment and skills to do this, but insisted that if projects went into commercial development then Cnooc—China's main offshore oil company—would take a majority stake.
9) U.S. Index Futures Advance After Dow Increases to Record
from Bloomberg by Jonathan Morgan
U.S. stock-index futures climbed, indicating the Dow Jones Industrial Average will extend an all-time high. Futures on the Dow expiring next month rose 54 points, or 0.3 percent, to 16,581 at 12:22 p.m. in London after the gauge climbed to a record 16,583.34 last week. Standard & Poor’s 500 Index (SPX) contracts added 0.4 percent to 1,880.5 today.
10) Train Accidents Bring New Scrutiny, But Fixes Likely Slow
from Morning Consult by Meghan McCarthy
The train derailment in Lynchburg, Virginia that spilled 30,000 gallons of oil into the James River earlier this month is the latest in a string of accidents that have increased scrutiny on the practice of shipping oil by rail.
The Department of Transportation sent the White House a package of rules regulating the transport of oil within hours of the accident, where they are still awaiting approval. That puts another tough political calculation in the White House’s court when it comes to balancing the need to transport oil and environmental safety. And with the railroads just coming out of a historically tough winter and facing some unprecedented problems, it won’t be an easy and fast fix. The oil produced from fracking needs to go somewhere, and it likely won’t wait for an entire fleet of rail cars to get updated.
11) Colorado Oil Train Spill Put at 5,600 Gallons
from KJCT8 by Associated Press
The Union Pacific Railroad says 6,500 gallons of oil spilled when a train derailed in northern Colorado on Friday. A railroad spokeswoman said cleanup operations were still underway Saturday. State officials say the spill was contained to a ditch and didn't reach the nearby South Platte River. The railroad says the contaminated soil will be removed and replaced with clean soil. Six of the 100 cars in a crude oil train derailed west of LaSalle, about 45 miles north of Denver. One car leaked.
12) Fed Government Failed to Inspect Higher Risk Oil Wells
from Denver Post by Hope Yen (AP)
The government has failed to inspect thousands of oil and gas wells it considers potentially high risks for water contamination and other environmental damage, congressional investigators say. The report, obtained by The Associated Press before its public release, highlights substantial gaps in oversight by the agency that manages oil and gas development on federal and Indian lands. Investigators said weak control by the Interior Department's Bureau of Land Management resulted from policies based on outdated science and from incomplete monitoring data.
13) Big Oil’s New Toy: Robotic Solar Surfboards, Prowling the Ocean
from Wall Street Journal by Alison Slider
Energy companies drilling in deep water from the U.S. Gulf of Mexico to offshore Angola in West Africa are deploying surfboard-like drones—powered by solar panels and propelled by wave action—as their latest weapon against offshore problems like oil spills. Oil-field service company Schlumberger showcased the Wave Glider this week at the Offshore Technology Conference in Houston. The devices have powerful sensors that can detect oil leaks seeping into the ocean and remotely monitor pipelines and other equipment thousands of feet below the water line, beaming data back to operation centers by satellite.
14) Report Raps Federal Agency for Lapses in Pipeline Safety
from Wall Street Journal by Cassandra Sweet
The federal agency that oversees the nation's natural-gas pipelines has been doing a poor job of ensuring that states enforce safety rules, the inspector general for the Transportation Department said Friday. Lapses at the U.S. Pipeline and Hazardous Materials Safety Administration, or PHMSA, have resulted in "undetected safety weaknesses" in state oversight programs, the inspector general said. The agency, which is part of the Transportation Department, delegates most pipeline inspections to state agencies.
15) Consolidation in U.K. Shale-Gas Sector Under Way
from Wall Street Journal by Selina Williams
The U.K. may not have produced a cubic foot of commercially viable shale gas yet. But consolidation in the sector is already under way. U.K. onshore oil-and-gas producer IGas Energy said Friday it has agreed to acquire Australia's Dart Energy PLC in an all-share deal valued at £117.1 million ($197.38 million). The deal will create the U.K.'s largest shale-gas explorer by acreage under license… The consolidation of the two shale minnows, though tiny by global energy industry standards, reflects the growing interest in the U.K.'s fledgling shale-gas sector. The country could have 26 trillion cubic feet of shale-gas deposits, the U.S. Energy Information Administration has estimated.
Utilities and Infrastructure
16) Judge Open to DOE’s Case Against FERC in Fine Dispute
from Politico Pro by Darius Dixon
A federal court panel Friday seemed receptive to Energy Department arguments that FERC can’t approve fines against federal agencies for violating reliability requirements. Although the three-judge panel on the D.C. Circuit Court of Appeals didn’t seem all that impressed with the shifting arguments of Justice Department lawyer Henry Whitaker, it was FERC’s attorney, Lona Perry, who gave answers that raised a few eyebrows. The case, Southwestern Power Admin., et al v. FERC, centers on FERC’s approval of a $19,500 fine against DOE’s Southwestern Power Administration in 2012. But even if the fine were $1, DOE still would have dragged the independent agency into court. The Interior Department, which joined the lawsuit against FERC, would have too.
17) German Government Denies in Talks on Public Body to Decommission Nuclear Plants
from Reuters by Michael Nienaber
The German government denied on Monday it was in talks with utilities about handing over responsibility for decommissioning the country's nuclear power plants to a new public taxpayer-backed foundation. "There are no talks and no agreements on establishing such a foundation," Steffen Seibert, Chancellor Angela Merkel's spokesman, said at a news conference after industry sources told Reuters that the task should be put into public hands. A spokesman for Environment Minister Barbara Hendricks told the news conference it was the full responsibility of the utilities to safely decommission and dismantle the country's nine nuclear power plants still on the grid.
18) Throwing Light on Value at SolarCity
from Wall Street Journal by Liam Denning
Think of a number. Then double it. Maybe triple it if you are having a good day. Valuing SolarCity isn't quite that arbitrary. But the assumptions underlying how much the solar-leasing firm is worth are so open to debate that the exact stock price looks about as solid as sunlight. The result is the stock's wild ride this year, rising 55% to a peak in February, only to drop by almost half by last Wednesday, before first-quarter results gave it a 12% boost the next day. Overlooking continued losses, investors cheered sales growth and raised targets.
OPINIONS, EDITORIALS, PERSPECTIVES
19) Obama's Climate Bomb
from Wall Street Journal by Editorial Board
Supervising the Earth's climate—or at least believing humanity can achieve such miracles—may be the only political project grandiose enough for President Obama. So it shouldn't surprise that after reforming health care and raising taxes, the White House is now getting the global-warming band back together, though it is still merely playing the old classics of unscientific panic. On Wednesday the White House released the quadrennial National Climate Assessment, an 829-page report. The theme is that "this is not some distant problem of the future. This is a problem that is affecting Americans right now," as Mr. Obama told lovable weather personality Al Roker. His "Today Show" interview was one of eight hits with television meteorologists to promote the report, part of a coordinated political campaign to scare Americans into supporting his anticarbon tax-and-regulation agenda. The report is designed to dramatize the supposed immediacy of climate change by concentrating on droughts, floods, heat waves, torrential rains, wildfires, polar-vortex winters and other indicia of the end of days. Everybody "gets" the weather.
20) The Dubious Benefits of Further Ozone Reductions
from Wall Street Journal by Julie Goodman and Sonia Sax
Over the past several decades the U.S. has achieved remarkable success in reducing air pollution. According to the Environmental Protection Agency, the country has reduced six common air pollutants by 72% since 1970. These reductions are credited with achieving meaningful public-health benefits, from improved respiratory health to increased life expectancy. Yet with this success we now face a critical question: Will further decreases in air pollution to levels that approach those that occur naturally necessarily result in additional public-health benefits? This question gets to the heart of the EPA's current evaluation of whether the existing National Ambient Air Quality Standard for ozone is sufficient to protect public health.
21) The GOP Does the Climate Change Dance
from LA Times by Doyle McManus
Last week, the White House issued a new and alarming edition of its national report on climate change. How did leading Republicans respond? Sen. Mitch McConnell (R-Ky.), the GOP's leader in the Senate, scoffed at President Obama for "talking about the weather," dismissing the issue as a hobbyhorse of "liberal elites … who leave a giant carbon footprint and then lecture everybody else about low-flow toilets."… Perhaps this counts as progress. They weren't calling climate change a hoax, as many conservatives once did (and some still do).
22) The Toxic Brew in Our Yards
from New York Times by Diane Lewis
In much of the country, it’s time to go outside, clean up the ravages of winter and start planting. Many of us will be using chemicals like glyphosate, carbaryl, malathion and 2,4-D. But they can end up in drinking water, and in some cases these compounds or their breakdown products are linked to an increased risk for cancer and hormonal disruption. Some of those chemicals are also used by farmworkers, and there is a growing recognition that they can be hazardous. The Environmental Protection Agency is proposing regulations that will limit farmworkers’ exposure to dangerous pesticides and is accepting comments on these changes through June 17. These new rules are meant to reduce the incidence of diseases associated with pesticide exposure, including non-Hodgkin’s lymphoma, prostate cancer, Parkinson’s disease and lung cancer.
RESEARCH REPORTS, ISSUE BRIEFS, CASE STUDIES
23) When Does Electricity Distort Costs? Lessons from Fuel Procurement in U.S. Electricity Generation
from NBER by Steve Cicala
This paper evaluates changes in fuel procurement practices by coal- and gas-fired power plants in the United States following state-level legislation that ended cost-of-service regulation of electricity generation. I find that deregulated plants substantially reduce the price paid for coal (but not gas), and tend to employ less capital-intensive sulfur abatement techniques relative to matched plants that were not subject to any regulatory change. Deregulation also led to a shift toward more productive coal mines. I show how these results lend support to theories of asymmetric information, capital bias, and regulatory capture as important sources of regulatory distortion.
24) PHMSA’s State Pipeline Safety Program Lacks Effective Management and Oversight
from Department of Transportation Office of Inspector General
The Nation’s network of approximately 2.5 million miles of pipelines moves millions of gallons of hazardous liquids and 55 billion cubic feet of natural gas every day. DOT’s Pipeline and Hazardous Materials Safety Administration (PHMSA) authorizes States to oversee and enforce operators’ compliance with Federal pipeline safety regulations through its State Pipeline Safety Program. PHMSA also allocates grants to State programs. In September 2010, an intra-State natural gas pipeline exploded in San Bruno, CA, resulting in eight fatalities, injuries, and destroyed homes. In its investigation of the explosion, the National Transportation Safety Board found weaknesses in PHMSA’s oversight of State programs, and recommended that DOT assess the effectiveness of PHMSA’s oversight of intra‑State pipeline safety and whether State programs use Federal grants effectively. Accordingly, we assessed PHMSA’s (1) policies and procedures for managing its State Pipeline Safety Program, including guidelines to participating States, and (2) oversight of State pipeline safety programs.