Energy Update: Week of December 23

Energy Update - December 23, 2019

Friends,

HAPPY HOLIDAYS!!!   We lit candles last night for first night of Hanukah and then went to Nats Park for Enchant Christmas, which was pretty awesome.  You should try to check it out if you are in DC…

So I think every person in the country probably saw the final Star Wars movie.  Adam, Hannah, Liv and I saw it Sunday.  While it has gotten mixed reviews, I thought it was good.  I definitely enjoyed it and it was a good finish to the long saga. We also saw Bombshell, which I also thought was very good.  John Lithgow was really outstanding as Roger Ailes and Charlize Theron looks almost exactly like Megan Kelly and portrays her well too.

Well, we wrapped up the legislative year with a bang on Thursday.  There was a lot in the legislation beyond the big ticket items like the biodiesel tax Credit and many others, USMCA, and the budget bill which takes spending through September 2020.  

One interesting scheduling note for early 2020.  Those of you following the auto industry know we are usually highlighting the North American International Auto Show in Detroit at the beginning of January…but not this year.  The auto industry has moved the largest auto show in the world to June (wisely if you ask me if you have ever been to Detroit In early January). But you auto buffs should not worry.  The DC Auto Show – America’s auto “policy” show will still kick off on January 22 at the Convention Center.  More in January…

Enjoy your holidays and take that much-needed rest – because it is going to get crazy and you’ll need your seatbelts on…2020 is here.  This year, I am doing a Christmas Energy Haiku for you:

Busy Year Over

Time to review, reflect, change

Energy Forward!

Remember, we will do a 20 issues for 2020 as we start the new decade.  Top 10 on January 6th.  That’s all for today, call with questions.  I will be around throughout the holidays.

Best,

Frank Maisano

(202) 828-5864

C. (202) 997-5932

FRANKLY SPOKEN

“The answer is yes, because the opportunity, the opportunity for those workers to transition to high paying jobs ... is real."

Former Vice President Joe Biden said when asked in Thursday’s Democratic Presidential Debate if he'd be willing to sacrifice oil and gas jobs in order to phase out fossil fuels and shift to a greener economy. Those unequivocal comments are notable, given Biden's play for blue-collar workers that Trump won away in 2016.

ON THE PODCAST

GTM Podcast Puts Vox’s Roberts on Spot – The latest episode of GTM’s Political Climate, our friend Julia Pyper asks Vox’s David Roberts a wide range of questions on American politics and how to save the planet.  As a leading voice in the space, he has helped readers better understand wonky topics like performance-based utility regulation and how batteries can benefit the power grid. He has also waded into covering broader political issues – just for fun.

FUN OPINIONS

Trump Must End America's Ethanol Nightmare – In an opinion piece for NewsMax, columnist Jared Whitley blasts the RFS as a failure. Despite this bad news, there are reasons to believe that the Congress won’t end the RFS. The current legislative battle mainly concerns the use of hardship waivers authorized by the 2005 law to mitigate the damage of the renewable mandate on small refiners that can’t afford offsets or blend their own ethanol. Congress could simply eliminate the RFS mandate entirely. That would undo the economic and environmental damage of our foolish foray into biofuels. But President Trump doesn’t need legislation to gut the RFS. The EPA has enormous regulatory authority to waive statutory targets.

CO State Sen Calls for Energy Storage Credit – A new op-ed from former CO state senator Greg Brophy, highlights the virtues of an energy Storage ITC legislation in Colorado Politics.  The bill, which was introduced by Sen. Cory Gardner, will harness the financing power of a 30% ITC that has already successfully jumpstarted the national solar power industry to include energy storage.  Energy storage is a technology-neutral approach, from which all sources of energy will benefit. An energy storage ITC is a good deal for American jobs and consumers. And it’s a good deal for voters, who want to see their taxes go toward initiatives that will have real and immediate impacts in their local communities.  

FROG BLOG

Harvard Economic Expert Talks COP-25 – Harvard Kennedy School environmental economics expert Robert Stavins  had a recent piece in The Conversation that says the disappointment of COP-25 is not due to lack of aspirations for future ambition, but to lack of support for global carbon markets.  Stavins says most accounts of the Madrid climate conference are calling it a failure in the face of inspirational calls from youth activists and others for greater ambition. He adds the reality is more complicated based on his 25 years following and analyzing this process together with scholars and government officials from around the world.  Stavins details a number of significant challenges then ends saying if negotiators can keep their eyes on the prize and resist being diverted by demands from activists and interest groups, real success is still possible.

IN THE NEWS

Senate Passes 2020 Budget, Tax Deal – The Senate cleared a domestic spending and tax incentive package in a 71-23 vote, sending the fiscal 2020 legislation to President Trump for his expected signature prior to a Friday midnight deadline.  The tax provisions include the renewal of the biodiesel tax credit through 2022 and extend the wind PTC phase out one more year, among other energy items. 

Ethanol RVOs Released by EPA – EPA released its 2020 ethanol requirements for biofuels in its final Renewable Fuel Standard rule today.  EPA increased 2020 RVOs and promised to use DOE recommendations as the baseline for reallocating the ethanol volumes lost because of exemptions it grants to small refiners.  The proposal largely tracks early plans and in addition to reallocating future gallons, will potentially allow partial exemptions.  Both reallocation and partial exemptions are likely to be challenged

Refiners Coalition Say Challenges Will Ensue – The Fueling American Jobs Coalition said the announcement marks another sad chapter in the history of the Renewable Fuel Standard (RFS). A mandate created 15 years ago to help bolster America’s energy security by propping up new domestic sources of fuel has today been exposed once and for all as nothing more than a subsidy for agribusiness companies—including an increasing number of companies now making foreign biofuel imported to the U.S. for the RFS—to be guarded at all costs by home-state politicians.

“The entire concept of prospectively recovering small refiner exemption (SRE) volumes is based on a false premise. The overwhelming consensus of data, confirmed by this EPA, clearly demonstrates that SREs do not suppress U.S. ethanol production, demand or exports. Year-to-date domestic ethanol blending levels are higher than ever, and the bulk of additional volumes will be satisfied by imports of foreign biofuel rather than U.S. biofuels producers.

“The fundamental flaw of this initiative lies in its remarkable divergence from both the language and intent of the Clean Air Act and the RFS regulatory structure. To be clear, neither the reallocations nor the partial waivers contained in today’s announcement are legal. Both threaten to raise the cost of compliance credits known as RINs (renewable identification numbers), and refineries that have not requested exemptions will find themselves saddled with even higher volume requirements applied without due process. Court challenges will ensue.

Union Workers in Key Political States Will Care – FAJC said it will not go unnoticed that the Administration has broken its promise to protect manufacturing workers in Pennsylvania, Ohio, Texas and across the nation. The RFS will once again be mired in litigation and reasonable politicians on both sides of the aisle will renew lingering questions about the underlying value of this rudderless government mandate. “And just as sure as the sun will rise tomorrow over Iowa, biofuels interests will be back next year to ask for even more.”  FAJC is a coalition of union workers, mom & pop gas station owners, small retailers, and independent American oil refiners fighting for a commonsense fix to the Environmental Protection Agency’s (EPA's) flawed Renewable Fuel Standard (RFS). For additional information, visit www.fuelingusjobs.com.

US Chamber Global energy Institute Study on Impacts of Fracking Ban – Today the US Chamber’s Global Energy Institute unveiled the results of a study that calculates the benefits of hydraulic fracturing for oil and natural gas for our nation. The results show that America’s shale revolution is essential to thousands of jobs and billions of dollars in economic growth. The report comes as Presidential candidates and activist groups have called for a ban on hydraulic fracturing, with several candidates promising a ban if elected.  The study is the next in the Global Energy Institute’s Energy Accountability Series and examines “What If…Hydraulic Fracturing Was Banned.” It includes a national report and a series of state profiles that consider the economic benefits of hydraulic fracturing, the consequences of ending it, and the impact on the U.S. economy and seven specific states (Texas, Colorado, New Mexico, Ohio, Pennsylvania, Michigan and Wisconsin).

The report finds the United States is benefiting greatly from the shale energy revolution. If hydraulic fracturing is banned in America, the report finds:

  • More than 19 million jobs would be lost by 2025.
  • $3.7 trillion in American household income would be lost from 2021-2025.
  • $7.1 trillion to the U.S. economy would be lost and $1.9 trillion less in tax revenue would be collected by the federal, state, and local governments over the same period.

House Science Moves Bipartisan Clean Energy Package – The House Science, Space & Technology Committee for advancing several bipartisan clean energy innovation bills including the Advanced Geothermal Research and Development Act, the Better Energy Storage Technology (BEST) Act, and the Grid Modernization Research and Development Act. Last week, Ranking Member Frank Lucas (R-OK) and Chairwoman Eddie Bernice Johnson (D-TX) introduced H.R. 5374 the Advanced Geothermal Research and Development Act which focuses advanced geothermal research, development, and demonstration efforts at the Department of Energy (DOE) on key challenges that could unlock gigawatts of new baseload clean energy. ClearPath Action, the U.S. Chamber of Commerce Global Energy Institute, Geothermal Resources Council and other groups sent a letter to House leadership supporting the Advanced Geothermal Research and Development Act. Read the letter here. 

DOE GeoVision – DOE’s recently published GeoVision report indicated there is enough geothermal resource potential in the United States alone to meet half of the nation’s electricity needs. Read more about the DOE announcement here

IER Releases Energy Primer – The Institute for Energy Research (IER) released its fourth edition of Hard Facts: An Energy Primer. The report provides an in-depth analysis of America's energy resources and its significance to the economy. Like in previous editions, IER aims to ground policy conversations with facts and counter misconceptions about our domestic energy resources. As outlined in the introduction of the latest edition of Hard Facts, nothing is more fundamental to unlocking human creativity and our full potential than the availability of affordable and reliable energy. Energy heats our homes, fuels our transportation, and powers the technology that contributes to our overall well-being. To put it simply, affordable energy enriches our lives and those of our loved ones, neighbors, friends, and fellow citizens by allowing us to do more. Hard Facts: An Energy Primer is a genuine reference tool for the news reporter, the policymaker, and everyday citizens. Key takeaways include:

  • At the end of 2017, the U.S. had slightly more than 39.1 billion barrels of proved crude oil reserves—84 percent higher than 10 years ago.
  • U.S. oil production in 2018 averaged almost 11 million barrels per day, with production in November and December hitting almost 12 million barrels per day. Oil production in 2018 was 1.6 million barrels per day higher than in 2017 (a 17 percent increase).
  • In the past decade, U.S. companies have drilled 114,000 wells in the Permian Basin of Texas alone; many of them are profitable at crude oil prices as low as $30 a barrel.
  • The renewable energy sector, including hydro, was responsible for 17 percent of the net electricity generated in the U.S. in 2018.
  • In 2018, the U.S. produced an average of 101.3 billion cubic feet of natural gas per day, the highest volume on record.
  • In 2018, U.S. coal exports rose for the second consecutive year to 116 million short tons.
  • In 2018, the U.S. nuclear power fleet generated its highest capacity factor ever at 92.6 percent.
  • In 2018, the renewable energy industry experienced an unexpected flattening of growth as renewables added about the same net capacity worldwide in 2018 as they did in 2017.

Murkowski Adds New Comms Director – Senate Energy Chair Lisa Murkowski announced recent additions to her staff on the Senate Energy and Natural Resources Committee.  Grace Jang joins as communications director, while Chris Griffin and Alexander Jackstadt be sign on as a staff assistant. In addition, Tonya Parish has been promoted to press secretary.

CSIS Releases Joint Report on Critical Minerals – On Friday, CSIS releases its report on critical minerals and the role of U.S. Mining in a low-carbon future.  The report is a product of a joint effort by CSIS and the Blue Green Alliance, who brought together a group of engaged stakeholders from the mining, labor, environmental, and think tank communities for a workshop to begin the process of building consensus on a path forward for a critical minerals strategy. The report summarizes this productive and inclusive conversation in this area, though the workshop only scratched the surface. Key issues include demand growth, US falling behind others, recycling and early stages of policy development.

ON THE SCHEDULE THIS WEEK

Hanukkah – In 2019, Hanukkah began at sundown on last night and lasts until sundown on Monday, December 30th.

Christmas – Wednesday

IN THE FUTURE

Science Conference Set – The National Council on Science and the Environment (NCSE) holds its 2020 Annual Conference on January 6-9 at the Omni Shoreham in Washington, D.C.  The event includes more than 800 leaders from the sciences, education, government, policy, business, and civil society to foster a dialogue across these sectors on environmental policy- and decision-making with the use of science. The Annual Conference program includes presentations by leading experts and sessions that spotlights new research, innovation, and the power of collaboration through partnering. Attendees will join meaningful conversations, network with peers, and make vital connections.

API Sets State of American Energy – API hosts its annual State of Energy on Tuesday January 7th at the Anthem.  

Platts Gas Storage Conference Set – Platts hosts its 18th annual Gas Storage Outlook Conference on January 7th and 8th in Houston at the Royal Sonesta Hotel.  The event will examine the full range of complex issues surrounding the use, operation, and development of gas storage in today’s evolving environment.

CSIS Hosts Conversation on European NatGas issues – CSIS hosts a conversation with the author, Thane Gustafson on Wednesday, January 8th at 9:30 a.m. to discuss the Europe-Russia relationship.  The issue has always had a political and geopolitical dimension, ever since the Soviet Union first supplied gas to Western Europe in the late 1960s. “Yet to boil down the subject of Russian-European gas relations to geopolitics is to miss a large part of the story,” writes Thane Gustafson, a professor of government at Georgetown University and a Senior Director at IHS Markit, in his new book The Bridge: Natural Gas in a Redivided Europe (Harvard University Press, 2020). He continues to say: “The gas revolution in Europe has deep roots, which originated quite independently of Russia, and are only distantly related to geopolitics.”

State of American Business Event Set – The U.S. Chamber of Commerce holds the 21st annual State of American Business event on Thursday January 9, 2020 at 10:00 a.m., where they will explore the most important trends, opportunities, and challenges facing the business community in the coming year - and beyond.

House Transpo Panel Look s at Water Recourses Legislation – The House Transportation Committee’s Water Resources and Environment panel holds a hearing on proposals for a Water Resources Development Act of 2020 at 10:00 a.m.

GTM Hosts Analysts to Talk Solar, Grid – Greentech Media hosts a webinar on Thursday January 9th at 1:00 p.m. that will cover the most compelling research findings from 2019 across three Wood Mackenzie coverage areas – solar, storage and the grid edge. A panel of Wood Mackenzie analysts will discuss what changes 2019 brought to cleantech across four categories: Technology (from solar inverter innovation to battery chemistry), manufacturing (supply chains for solar, batteries and grid tech), investment and financing (including M&A and corporate activity), and deployment.

Forum to Focus on Global Policy, Energy Challenges – On Thursday January 9th at 5:30 p.m., CSIS and Texas Christian University host the next installment of the Schieffer Series, “2020 Challenges Ahead.” CSIS experts Kathleen Hicks, Stephanie Segal and Sarah Ladislaw will join Beverly Kirk, Director of CSIS’s Smart Women Smart Power Initiative and Bob Schieffer to discuss a range of issues to look out for in 2020. Panelists will cover challenges ranging from the manifestations of U.S.-China tensions and Brexit to the United States’ withdrawal from global engagement and leadership, climate change and domestic stability. 

House Energy to Look at HFCs – The House Energy & Commerce Committee will hold a hearing on January 14th on HFC legislation.  Already the senate has introduced legislation that has 34 bipartisan cosponsors (17 Rs/17 Ds).  The hearing will likely mean that House legislation is probably imminent early in January.   More on this in our first 2020 Update. 

Energy Economists Host Growth Economist to Talk Ethanol – The US Energy Economists host their January lunch on Friday January 17th at The National Union Building.  Chris Bliley, vice president of regulatory affairs at trade association Growth Energy, will talk to us at lunch about the evolving picture for ethanol at lunch and the state of the Renewable Fuels Standard, specifically Renewable Volume Obligations, Renewable Identification Numbers and the small refinery exemption. He will also talk about E15 blending, E10 in Mexico and other ethanol production drivers.

Washington Auto Show Policy Days Set – On January 21st and 22nd, the Washington Auto Show holds its annual policy days just prior to the launch on the 2020 auto show.  As the “Public Policy Show” on the auto show circuit, the 10-day public show is preceded by two Public Policy Preview Days of special events and announcements for officials in government, industry and the media.  This year, Mobility Talks will focus on a policy discussion talk on Smart Cities and Urban Mobility with a significant discussion on autonomous vehicles.  SAFE’s Robbie Diamond will be featured on the plenary panel on Wednesday January 22nd. 

CSIS Looks at Deep Decarbonization – On Thursday January 23rd at 10:00 a.m., CSIS launches its Climate Solutions Series, a year-long initiative which will bring together a wide range of audiences over six sessions to examine global pathways to net-zero greenhouse gas emissions in different sectors of the economy.  The first session will look at various pathways to net-zero emissions, ranging from a significant reduction in fossil fuel consumption and major behavior changes with little reliance on “negative emissions,” to smaller structural changes with a heavy reliance on technologies to reduce carbon from point sources and the atmosphere. The event will feature a presentation on these various pathways, followed by a facilitated discussion featuring perspectives from national, state, and city government officials.

USEA Annual Energy Forum Set – The US Energy Assn holds its annual State of the Energy Industry Forum on Thursday January 23rd at 10:00 a.m. at the National Pres Club.  USEA begins each calendar year with its widely- recognized State of the Energy Industry Forum.  The Forum brings together distinguished leaders from the most influential energy trade associations to share their outlook and to discuss dynamic issues facing the energy industry in the new year.

SEJ Launches 2020 Journalists Guide –The Society of Environmental Journalists will hold its annual Policy roundtable and release its 2020 Journalists’ Guide to Energy and Environment on January 24th in a forum at the National Geographic Society In Washington.   More on this in the new year…

Super Bowl LIV – Sunday February 2nd

Iowa caucuses – Monday February 3rd

State of the Union – Tuesday February 4th

International HVACR Conference Set – The International Air-Conditioning, Heating, Refrigerating Expo is set for February 3rd to 5th in Orlando.  The AHR Expo is the world’s largest HVACR event, attracting the most comprehensive gathering of industry professionals from around the globe each year. The Show provides a unique forum where manufacturers of all sizes and specialties, whether a major industry brand or innovative start-up, can come together to share ideas and showcase the future of HVACR technology under one roof.

Forum to Look at CCS – The Atlantic Council holds a forum on Tuesday February 3rd at 3:00 p.m. to look at the global status of CCS technologies.  This event explores the current status of carbon capture and storage, the next generation of CCS projects, policies, and technologies taking shape around the world, and the important role they play in global decarbonization.

State Energy Officials Look at Policy Issues – The National Association of State Energy Officials 2020 Energy Policy Outlook Conference and Innovation Summit will be held on February 5th to 7th at the Fairmont Hotel in Washington, DC.  The conference will examine the key policies and initiatives needed to drive modernization and resilience across our energy infrastructure – grid, pipelines, buildings and transportation.

National Ethanol Conference ready for Houston – The National Ethanol Conference is set for February 10-12 in Houston at the Marriott Marquis.  The forum focuses on marketing, legislative and regulatory issues facing the ethanol industry.


Sustainable Energy Factbook Forum Set – BloombergNEF and the Business Council for Sustainable Energy (BCSE) will be releasing the 2020 Sustainable Energy in America Factbook in Washington, DC, on February 13th.  In its eighth year, the Factbook provides new industry information and trends for the U.S. energy economy, with an in-depth look at the energy efficiency, natural gas and renewable energy sectors as well as emerging areas such as digitalization, micro-grids, offshore wind, hydrogen and renewable natural gas.