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INDUSTRY DIVISIONS ARE UNSPOKEN BACKDROP TO EPA METHANE HEARING: The Environmental Protection Agency will get an earful today on its plans to scrap oil and gas methane regulation, and the typical battle lines will emerge — industry groups supportive and a large cohort of environmentalists opposing.
What’s simmering under the surface, though, are tensions within the industry over what the EPA’s regulatory role should be.
Oil industry and environmental groups testify today in Dallas on an EPA proposal that would eliminate direct regulation of methane from the oil and gas sector. Methane, the main component in natural gas, is a greenhouse gas that warms the atmosphere dozens of times faster than carbon dioxide.
The EPA’s proposal adopts in part an argument long pushed by the American Petroleum Institute, the major oil and gas lobby. The EPA already regulates another pollutant — volatile organic compounds, or VOCs — from oil and gas equipment, and those controls also capture methane, the oil group says. Therefore, the Obama administration’s 2016 rule controlling methane from new oil and gas drilling was redundant and burdensome, API argued.
Matthew Todd, API’s senior policy advisor, will reiterate that stance in testimony today.
“The continued regulation of volatile organic compounds is equally effective in reducing methane emissions and industry’s innovation combined with technological advancements will continue to lower emissions,” he said, according to testimony provided to Abby.
But not everyone in API agrees: Todd’s testimony doesn’t allude to any disagreements, but several oil majors — including Shell, BP, and ExxonMobil — have raised concerns with the EPA’s proposal. Those companies have called for the EPA to keep regulating methane directly, just at a level less strict than the Obama controls.
Environmental groups won’t parade those industry divisions in front of the EPA today, focusing instead on the regulation, but they’re well aware of them. The Environmental Defense Fund, for example, has worked closely with oil and gas companies, including Shell, to research and develop methane-cutting technology.
How much is the oil and gas industry emitting? The question has long sparked a vigorous argument between the industry and environmentalists — and that fight is on full display at the EPA hearing.
Todd said the industry is “laser-focused” on methane cuts and touted the oil and gas industry’s voluntary efforts, including a partnership of more than a dozen companies that API oversees focused on methane reductions.
But environmentalists told the EPA that oil and gas methane emissions have been historically and dramatically underestimated.
Rosalie Winn, an attorney with EDF, pointed in her testimony to research published last year showing oil and gas emissions were 60% higher than the EPA’s own estimates — totaling more than 13 million metric tons of methane per year.
“In essence, EPA’s proposed deregulation of methane would add the annual equivalent greenhouse gas emissions of 100 coal-fired power plants, or 85 million cars, at a time when reductions in climate changing pollutions are urgently needed,” Sarah Smith, director of Clean Air Task Force’s super pollutants program, said in testimony provided to Abby.
Welcome to Daily on Energy, written by Washington Examiner Energy and Environment Writers Josh Siegel (@SiegelScribe) and Abby Smith (@AbbySmithDC). Email [email protected] or [email protected] for tips, suggestions, calendar items, and anything else. If a friend sent this to you and you’d like to sign up, click here. If signing up doesn’t work, shoot us an email, and we’ll add you to our list.
RINGING THE ALARM ON SPR: The U.S. barely escaped disaster from last month’s attack on Saudi Arabia’s oil facilities and won’t be so lucky next time unless it invests in the Strategic Petroleum Reserve.
Senators, Trump officials, and oil analysts delivered that warning at a hearing Thursday, criticizing Congress’ habit of raiding from the U.S.’ emergency oil stockpile to fill unrelated budget gaps. Congress has mandated just under a third of the SPR to be sold over the next decade, with over 200 million barrels of oil on the chopping block.
“The fact we did not need to tap the SPR after the Saudi outage does not in any way discount the value of having that as an option,” said Energy and Natural Resources chairwoman Sen. Lisa Murkowski. “We had that in reserve and that was critical. It could have been much worse. It could very well have been economically cataclysmic.”
Oil prices have calmed after the attack caused the largest single day price hike in decades, and that likely won’t change even with continued hostility in the Middle East, because of sagging demand for oil from the slowing economy.
“Slowing economic growth continues to put downward pressure on oil prices which will outweigh concerns about supply security,” said Linda Capuano, administrator of the Energy Information Administration.
But: Recovery won’t be so easy if another attack occurred, enhancing the value of the SPR, said Jason Bordoff, director of Columbia University’s Center on Global Energy Policy.
“Regional tensions continue to flair and there will be a thinner buffer of spare capacity next time,” he said.
Steve Winberg, an Energy Department assistant secretary, said the Trump administration does not expect to release oil from the SPR in the near future. But he argued that a strong SPR is a “disincentive to any actor looking to disrupt the world’s supply of crude oil and is a moderating factor to keep prices from rising higher than they would otherwise.”
MARK YOUR CALENDARS: President Trump will headline next week’s Shale Insight conference in Pittsburgh, the Marcellus Shale Coalition announced Wednesday. His Oct. 23 remarks will be the second time he’s headlined the event, but his first as president.
“With President Trump’s leadership, America’s energy revolution is driving environmental progress and providing benefits, including a manufacturing rebirth, that are making our nation stronger and more secure,” David Spigelmyer, the coalition’s president, said in a statement.
A trip down memory lane: Trump, during his remarks to the conference in 2016, touted his plan if elected to “refocus” the EPA and open up fossil fuel production on federal lands.
“I will refocus the EPA on its core mission of ensuring clean air, and clean, safe drinking water for all Americans,” Trump said then. “My environmental agenda will be guided by true specialists in conservation, not those with radical political agendas.”
FLIPPING THE BIRD: A federal judge gave the proverbial you-know-what Wednesday to the Trump administration’s plan to weaken protections of the threatened chicken-sized Sage Grouse.
Judge B. Lynn Winmill of the U.S. District Court for the District of Idaho granted a preliminary injunction ruling that the administration failed to analyze how sage grouse would be harmed under a plan issued in March that would allow for drilling and mining activities amongst the bird’s habitat.
“It is likely that these actions will cause further declines of the sage grouse under the weakened protections,” Winmill wrote in his decision.
If Obama did it…: The Interior Department’s Bureau of Land Management sought to revise a previous sage grouse plan issued in 2015 by the Obama administration with the support of western states. The Obama administration decided not to list the bird as endangered — a more significant step — but protected large chunks of habitat from oil and gas drilling. The range of the grouse extends across 270,000 square miles in parts of 11 states in the western United States. The bird’s population once numbered in the millions but fell to a few hundred thousand in recent decades.
‘ACE’ IN THE HOLE? Not likely, but a vote this afternoon will put senators on record on the EPA’s efforts to weaken the Obama-era Clean Power Plan.
Senators are voting on a Congressional Review Act resolution brought by Democractic leader and New York Senator Chuck Schumer to scrap the EPA’s Affordable Clean Energy, or ACE, rule. That rule replaces the Clean Power Plan, which set first-time limits on power plants’ carbon, with much narrower standards.
Whose vote to watch: Moderate Republicans like Maine Senator Susan Collins and energy-state Democrats like West Virginia Senator Joe Manchin.
DON’T BANK ON SAUDI ARAMCO IPO: Green groups from the U.S., U.K., and the Netherlands are warning some of the world’s biggest banks against underwriting the IPO of Saudi Aramco, Saudi Arabia’s state-owned oil giant, saying it would undermine efforts to combat climate change, making it impossible for the world to achieve the goals of the Paris agreement.
“Such drastic cuts will not be possible if banks like yours keep increasing the capital they are facilitating for the fossil fuel industry, and in particular for companies like Aramco that are planning to expand their production” wrote Rainforest Action Network, Friends of the Earth, Sierra Club, 350.org, and other groups in a letter Thursday to the CEOs of Bank of America, Citigroup, Goldman Sachs, JPMorgan Chase, and more.
Saudi Arabia is seeking to diversify away from oil, but the groups say the banks’ capital would help Saudi Aramco expand other fossil fuel-related activities, such as refining, gas production, and petrochemicals investment.
LEAVING AN RFS LEGACY: Retiring House Republicans John Shimkus of Illinois and Bill Flores of Texas won’t let go of their long-sought goal to reform the contested Renewable Fuel Standard, making one last stab before leaving Congress.
Shimkus, representing a corn-growing district, and Flores, an oil and gas supporter, teamed up Wednesday to introduce the 21st Century Transportation Fuels Act, which would replace the RFS with an octane standard. The most significant part of the bill is the requirement, beginning with the 2023 model year, that all new cars and light trucks are designed to run on high-octane fuels.
“Nobody is happy with the way the RFS is being administered,” Shimkus told Josh. “There’s a better way. Transitioning from the RFS to an octane standard as proposed in our bill would drastically reduce uncertainty for biofuel producers and oil refiners alike. And by better aligning federal fuel and vehicle policies, both consumers and automakers stand to benefit as well.”
The Rundown
New York Times Energy companies burn off vast amounts of natural gas. That’s bad for the climate.
Wall Street Journal Rick Perry called Rudy Giuliani at Trump’s direction on Ukraine concerns
Chicago Tribune Exelon Utilities CEO Anne Pramaggiore abruptly retires amid federal probe into Illinois lobbying
Wall Street Journal US, Saudis heighten security defenses after attacks on oil industry
Los Angeles Times Southern California Edison considers power shut-offs ahead of high winds
Calendar
TUESDAY | OCTOBER 22
10 a.m. 366 Dirksen. The Senate’s Energy and Natural Resources Committee will hold a hearing to examine international efforts to increase energy efficiency and opportunities to advance energy efficiency in the United States.
