Washington Post – Economy

Democracy Dies in Darkness

White House seeks 72 percent cut to clean energy research, underscoring administration’s preference for fossil fuels

By Chris Mooney, Steven Mufson       January 31, 2018  

Filipinos ride energy efficient electric tricycles during a test drive in Taguig city, south of Manila, Philippines, 12 January 2018. The Department of Energy (DOE) donated 200 units of energy efficient electric tricycles to the affected residents of war-torn Marawi as part of its efforts to help rebuild the city. Photo by FRANCIS R. MALASIG/EPA-EFE/REX/Shutterstock (Malasig/Epa-Efe/Rex/Shutterstock/Malasig/Epa-Efe/Rex/Shutterstock)

The Trump administration is poised to ask Congress for deep budget cuts to the Energy Department’s renewable energy and energy efficiency programs, slashing them by 72 percent overall in fiscal 2019, according to draft budget documents obtained by The Washington Post.

Many of the sharp cuts would likely be restored by Congress, but President Trump’s budget due out in February will mark a starting point for negotiations and offer a statement of intent and policy priorities.

The document underscores the administration’s continued focus on the exploitation of fossil fuel resources — or as Trump put it in his State of the Union address, “beautiful clean coal” — over newer renewable technologies seen as a central solution to the problem of climate change.

The Energy Department had asked the White House for more modest spending reductions for the renewable and efficiency programs, but people familiar with the process, who asked for anonymity to share unfinished budget information, said that the Office of Management and Budget insisted on the deeper cuts.

The cuts would also be deeper than those the Trump administration sought for the current fiscal year, but was unable to implement because of the budget impasse in Congress. The federal government has been operating on a series of continuing resolutions that have maintained existing spending. The current continuing resolution expires Feb. 8.

President Trump applauded his administration’s energy policy at a rally in Pensacola, Fla. on Dec. 8. (The Washington Post)

Spending for the Energy Department’s Office of Energy Efficiency and Renewable Energy is set at a $2.04 billion level for the current fiscal year, which ends Oct. 1. Last year the administration asked for just $636.1 million, a decline of over two-thirds, though Congress did not implement the request. For 2019, the administration’s draft proposal would lower that request even further to $575.5 million.

The document also suggests substantial staff cuts, down from 680 in the enacted 2017 budget to 450 in 2019.

“It shows that we’ve made no inroads in terms of convincing the administration of our value, and if anything, our value based on these numbers has dropped,” said one EERE employee, who spoke on the condition of anonymity to discuss the internal budget information.

The Energy Department did not respond to requests for comment on Wednesday. The White House said in a statement: “We don’t comment on any leaked or pre-decisional documents prior to the release of the official budget.”

It is unclear whether the document represents a final budget proposal or will be subject to last-minute negotiation and revision. The federal budget is due out in February.

One source familiar with the negotiating process, who spoke on the condition of anonymity to freely describe what the person had learned, said that the budget request had been lowered after negotiations with the Office of Management and Budget, and may have been lowered further because of a desire to channel more funding toward nuclear energy, a favored subject for Energy Secretary Rick Perry.

The funding requests represent a double whammy for renewable energy after the administration last week imposed tariffs on imported solar panels.

The tariff action e is likely to decrease the installation volumes of solar energy in coming years, according to industry analysts.

The Office of Energy Efficiency and Renewable Energy is perhaps best known for the solar “SunShot” program, which strives to drive down the price of solar energy.

The large bulk of its funding is deployed on research, most frequently at the National Renewable Energy Laboratory in Golden, Co. The vast majority of the laboratory’s $293 million budget in 2017 came from EERE.

But it’s far from clear the cuts would become a reality.

“”The president suggests a budget, but, under the Constitution, Congress passes appropriations bills,” Sen. Lamar Alexander (R — Tenn.), an influential appropriator on energy issues, said in a statement.

The draft document says the administration will once again ask Congress to abolish the weatherization program, which has trained thousands of workers and helped reduce utility bills for thousands of homeowners. The budget proposal would also eliminate state energy grants.

The budget would ax research in fuel efficient vehicles by 82 percent, bio-energy technologies by 82 percent, advanced manufacturing by 75 percent and solar energy technology by 78 percent.

The proposal would cut funds for electric car technologies and fuel efficient vehicles — at $307 million currently the biggest of the program areas — to $ 56 million in 2019.

Money for bio-energy technologies have gone to research renewable fuels from nonfood sources.

The plan would also chop spending on more efficient building technologies and research into geothermal, hydro and wind power.

The renewable and efficiency programs represent about seven percent of the Energy Department’s overall budget. The majority of the department’s budget goes to maintaining the nation’s nuclear weapons stockpile and cleaning up sites contaminated by federal nuclear programs.

Chris Mooney reports on science and the environment.

Steven Mufson covers energy and other financial matters. Since joining The Post, he has covered the White House, China, economic policy and diplomacy.

The Hill

EPA delays Obama water rule

By Timothy Cama     January 31, 2018

© Greg Nash

The Environmental Protection Agency (EPA) is pushing back by two years an Obama administration rule redefining the federal government’s power over small waterways.

The Trump administration is working to repeal the rule, dubbed the Clean Water Rule or Waters of the United States (WOTUS), and formally proposed to do so last year.

But earlier this month, the Supreme Court overturned a federal appeals court’s action halting the rule, so it could take effect soon.

EPA head Scott Pruitt said the Wednesday action is meant to stop the Clean Water Rule from taking effect due to the Supreme Court’s action.

“Today, EPA is taking action to reduce confusion and provide certainty to America’s farmers and ranchers,” Pruitt said in a statement.

“The 2015 WOTUS rule developed by the Obama administration will not be applicable for the next two years, while we work through the process of providing long-term regulatory certainty across all 50 states about what waters are subject to federal regulation.”

The EPA is taking the action alongside the Army Corps of Engineers, which also has responsibility for enforcing the Clean Water Act.

The Natural Resources Defense Council said the delay puts significant water supplies at risk, and said it would sue to stop the delay.

“EPA Administrator Scott Pruitt is racing the clock to deny protections for our public health and safety. It’s grossly irresponsible, and illegal — and we’ll challenge it in court,” said Jon Devine, the group’s senior attorney.

The original 2015 rule was designed to clarify federal agencies’ authority and give them the power to regulate small waterways such as ponds, headwaters and wetlands for pollution prevention. It should have taken effect in 2015, but various courts halted it.

Republicans and many business groups fought the rule tooth and nail, saying it gave the federal government power over wide swaths of land.

Its repeal has been a top priority for President Trump, and he signed an order to repeal it shortly after taking office.

Pruitt is also working to develop a new rule to replace the Obama rule’s definitions once it is fully repealed. The replacement rule would likely give the federal government power over a significantly smaller area.

Chicago Tribune

Toxic waste from coal ash pits leaching into Illinois’ only National Scenic River

Toxic coal ash waste can be seen leaking into the Middle Fork of the Vermilion River. (Prairie Rivers Network)

Michael Hawthorne, Contract Reporter      January 31, 2018

Seven years after Dynegy Inc. scrapped one of the last coal plants in downstate Illinois, environmental groups are accusing the company of failing to prevent toxic waste stored nearby from seeping into the state’s only National Scenic River.

Citing problems documented in the Houston-based company’s own internal reports, the nonprofit Prairie Rivers Network announced Wednesday that it plans to file suit, accusing Dynegy of repeatedly violating the federal Clean Water Act. The group said it decided to take more aggressive action because federal and state regulators have failed to address longstanding problems at the shuttered plant near Oakwood, about 25 miles east of Urbana.

Pictures taken by the group show orange- and purple-hued muck leaching from the banks of the Middle Fork of the Vermilion River as it meanders past the former Vermilion Power Station, a coal-fired facility built in the mid-1950s by Illinois Power and later purchased by Dynegy.

“These illegal discharges could not be more obvious,” said Jenny Cassel, an attorney for Earthjustice, a nonprofit environmental law organization representing the Prairie Rivers Network.

Before Dynegy closed the plant in 2011, the two companies deposited more than 3.3 million cubic yards of coal ash into pits next to the river — enough to fill the Empire State Building nearly 2½ times. Testing by Dynegy and the Prairie Rivers Network shows the multicolored waste oozing into the water contains dangerous levels of heavy metals found in coal ash, including arsenic, chromium, iron, lead and manganese.

“This toxic waste needs to be cleaned up,” said Andrew Rehn, water resources engineer for the network, based in Champaign. “We want to make sure that Dynegy can’t just walk away from its responsibility. We all have a right to a clean Vermilion River.”

Chicago Tribune Graphics

What’s left of the old power plant rises above the river about a mile downstream from a launch that draws thousands of paddlers, kayakers and tubers to the area every year. It also is along a 17-mile stretch of the river protected in 1989 under the federal National Wild and Scenic Rivers Act, a designation based in part on the dozens of endangered and threatened species in the river and surrounding woods.

In 2012, Dynegy was cited by the Illinois Environmental Protection Agency for water pollution violations at the site. The case is still open.

“We remain focused on working with state and federal regulatory agencies to provide long-term protection of the storage areas at Vermilion, the Middle Fork of the Vermilion River and groundwater resources,” the company said in a statement.

The company has suggested it could solve the problem in Vermilion County by capping the waste pits to prevent rain and snowmelt from washing coal ash into the water. But in November, Dynegy sent state regulators a report that estimated the normal flow of the Middle Fork is eroding the river banks by up to 3 feet a year, making it more likely the toxic slurry will be exposed below the proposed caps.

Because the power plant has been closed for so long, the ash pits are exempt from federal regulations enacted by the Obama administration in 2015. Opposition from Dynegy and other energy companies prompted the Trump administration last year to reconsider the safeguards; a separate proposal in Illinois also has been sidetracked.

The environmental groups plan to sue Dynegy under a provision of the Clean Water Act that allows citizens to challenge companies about water pollution violations but requires a 60-day notice.

mhawthorne@chicagotribune.com     Twitter @scribeguy

EcoWatch

Despite Trump’s Remark, There Is No War On Coal and It’s Definitely Not Clean

Lorraine Chow      January 31, 2018

President Donald Trump’s line, “We have ended the war on beautiful, clean coal” drew some of the biggest claps and cheers from Republican lawmakers at last night’s State of the Union address.

Energy Sec. Rick Perry, who wants to bail out uncompetitive coal plants, quickly bopped up with a standing ovation. Interior Sec. Ryan Zinke, who wants to open federal lands to mining, stood up shortly after.

You can watch their enthusiastic reaction here:

But there are a few problems with their boss’ remark. First, there is no war on coal. Market forces, the country’s glut of cheap natural gas, increased energy efficiency and renewable energy have all contributed to the coal industry’s decline.

While the Trump administration has aggressively pushed for fossil fuels and has rolled back a number of regulations, including the Clean Power Plan, to prop up domestic energy, the policies haven’t revived the coal sector. Vox noted that “mining jobs have crashed from a high of 800,000 workers in the 1920s to about 76,000 today.” Additionally, U.S. coal consumption fell by 2.4 percent in 2017—the lowest level in nearly four decades.

Secondly, there’s no such thing as clean coal. Coal is one of the world’s most polluting fossil fuels and its combustion is a major contributor to air pollution and climate change.

The Associated Press fact-checked Trump’s statement, and wrote:

“According to the Energy Department, more than 83 percent of all major air pollutants—sulfur dioxide, carbon dioxide, toxic mercury and dangerous soot particles—from power plants are from coal, even though coal makes up only 43 percent of the power generation. Power plants are the No. 1 source of those pollutants.’

Vox pointed out that Trump may simply be confusing “clean coal” with mines that wash or pretreat coal. Or perhaps the president is referring to carbon capture and storage, which collects and stores carbon from coal-powered plants’ emissions.

But the process is not only costly and more expensive than installing natural gas, wind or solar systems—many governments are also abandoning the trials that are needed to make it work. Meanwhile, Energy Sec. Perry’s most recent budget proposal slashed the clean-coal budget from more than $200 million to only $35 million.

Trump’s head-scratching comment was succinctly summarized by the New York Times’ columnist Nicolas Kristof:

“Trump says he has ended ‘the war on clean coal.’ I’d make three points: 1. Coal employment is in long-term secular decline. 2. Newspaper industry has lost more jobs in recent years than coal has. 3. Solar power employs 5 times as many people as coal—and it’s the future.”

RELATED ARTICLES AROUND THE WEB

• Trump and Rick Perry’s Coal Bailout Is Dead – The Atlantic ›
• Mine closing wipes out many of Trump’s coal job gains – Jan. 10, 2018 ›

Christian Science Monitor – Environment

Oklahoma, America’s No. 2 wind producer, sours on the industry

A massive state budget crisis, along with powerful oil and gas interests, has led the state to phase out key tax incentives for wind.

Christa Case Bryant/The Christian Science Monitor

Christa Case Bryant, Staff writer     January 30, 2018

Garber, Oklahoma. First the wind came sweeping down the plain, then the dollars, and now the controversy.

With ever more spiky wind turbines cropping up across its open lands, Oklahoma has just become the No. 2 state in the country for wind energy production, the American Wind Energy Association announced Tuesday. That has been a boon for local communities, but it has also come at a price for the state, which pays tens of millions of dollars a year in subsidies for wind companies. As the industry grows, so does the price tag for wind incentives.

Now a new project – Wind Catcher, which is slated to be one of the largest wind farms in America – is facing stiff resistance and could be scrapped altogether.

The Wind Catcher case comes amid a pushback on wind incentives, galvanized by a state budget crisis and influential oil and gas interests. In the past year, Oklahoma has ended two key incentives that even wind proponents admitted were in some ways “too generous.”

“I’m hopeful that the current balance that we’ve struck between local taxation and making sure that we’re not penalizing a new technology – I’m hopeful that that balance stays in place,” says state Sen. AJ Griffin (R) of Guthrie, who says she encourages investment in wind “without giving away the farm.”

But some are pushing not only to remove all subsidies, but to levy a new tax on wind.

 Think you know the odd effects of global climate change? Take our quiz.

One of America’s largest wind farms

Under the whirring of turbines in Oklahoma’s Garfield County, Craig Schlichting hauls rock, agricultural lime, and grain for a living.

He’s not particularly keen on wind, but with the agricultural economy flagging, he sees the industry’s positive effect on his community of Garber, Okla. There’s a new blacktop road being laid down, and a smart new school building a mile away. Then there’s the wind companies’ payments to those with turbines on their land.

“It’s scuttlebutt, but the guys who have them say [the wind companies] pay $10,000 per year,” says Mr. Schlichting, standing in well-worn striped overalls. “In a poor state, it’s good money.”

The money coming into the county through such landowner payments is equivalent of the paying 194 employees at the county average wage – which would put it among the top-10 companies in the area, says Brent Kisling, executive director of the Enid Regional Development Alliance in Garfield County.

Now Enid stands to benefit from the $4.5 billion Wind Catcher project, which includes plans to build a 350-mile transmission line that would pass through the area, bringing supply-chain jobs, says Mr. Kisling.

Public Service Company of Oklahoma (PSO), which is investing $1.3 billion in the project, says Wind Catcher will save Oklahoma electric customers an estimated $2 billion over 25 years. That would be a relief for many in a state where summer electric bills often run $400 or more a month.

But there’s a problem.

$2 billion in savings? AG doesn’t think so.

PSO skipped a required competitive bidding process for building the transmission line. That was intentional: It wanted to finish the project before a federal tax credit expires at the end of 2020, says spokesman Stan Whiteford. Now it needs an exemption from the Oklahoma Corporation Commission (OCC), which regulates public utilities.

PSO is asking the state to approve a rate hike to help finance its investment, and says that the added cost to consumers will be quickly canceled out by the savings of wind power. The OCC held hearings this month over whether to approve the exemption and the rate hike. A decision is expected in early spring.

One of the strongest opponents to the project is Attorney General Mike Hunter, whose job is to protect Oklahoma consumers.

However, Mr. Hunter disputes PSO’s savings estimate. He has experience with public utility cases, having previously worked for OCC, and says the Wind Catcher project is likely to cost consumers around $320 million.

He also underscores that PSO did not follow state rules, plain and simple, and must be opposed on that basis.

“My responsibility is to the ratepayers of the state of Oklahoma and that responsibility is a statutory responsibility, it’s consistent with my oath of office, and the case that we’re putting on is based on careful investigation, thoughtful review of evidence, and the law,” Hunter tells the Monitor. “And that is my sole motivation in this matter.”

What makes a level playing field?

Pro-wind critics argue that the opposition to Wind Catcher – and the wind industry in general – is being driven by influential oil and gas magnates like Harold Hamm, an ally of President Trump and former Oklahoma attorney general Scott Pruitt.

“Certainly everybody in Oklahoma knows there’s been a Harold Hamm vs. wind fight for several years,” says Jeff Clark, head of the Texas-based Wind Coalition. “He’s not intervening so Wind Catcher gets built more competitively. He’s intervening because he wants to kill Wind Catcher.”

Mr. Hamm’s office did not respond to multiple requests for comment. But he has argued that wind subsidies are no longer necessary in light of a federal tax credit extension for wind, and says the subsidies primarily benefit out-of-state companies whose power often goes to out-of-state customers.

Jonathan Small, president of the Oklahoma Council for Public Affairs in Oklahoma City and an early member of The Windfall Coalition spearheaded by Hamm, says it’s more about free-market economics than favoritism.

“I think the vast majority of lawmakers and citizens would say it has more to do with lack of a level playing field than not liking wind,” says Mr. Small, a former budget analyst for the Oklahoma Office of State Finance. He says the budget crunch focused scrutiny on wind incentives, and cites a statistic that each turbine costs taxpayers more than a teacher’s starting pay – a figure calculated by Wind Waste on an Apex wind installment in Oklahoma’s Kingfisher County. (Teachers are in such short supply that some Oklahoma school districts have gone to four-day weeks.)

But proponents of wind argue that oil and gas subsidies cost the state significantly more than wind subsidies, despite wind’s growth in recent years. A 2017 Oklahoma Policy Institute paper calculated that in fiscal year 2018 the state would forgo more than $500 million in revenue due to tax breaks for oil and gas.

“I think a lot of it is that [oil and gas entities] want to have their incentives, but they don’t think the wind should have the same incentives,” says Jan Kuehn of Kingfisher County, who has Apex wind turbines on her land as well as oil wells that still pay her royalties. “I think the wind people left the land and the roads in better shape than before they came – which is a great help because as most states, Oklahoma is strapped for money.”

In May 2016, Oklahoma’s secretary of finance announced that the state had needed to borrow $5 million from other funds that month to pay refunds due corporations, including $3.3 million in zero-emission credits to wind companies. The following year, the legislature ended that incentive for new wind farms, as well as a five-year property tax exemption.

Gov. Mary Fallin also proposed a production tax on wind to help close a nearly $1 billion budget gap for fiscal year 2018. Legislators are still pursuing that idea.

Kisling of the Enid Economic Development Alliance says what’s needed is a shift away from zero-sum thinking.

“We’ve spent too much time as a state [debating] who gets which slice of the pie,” he says. “We ought to spend more time figuring out how to increase the size of the pie.”

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EcoWatch

From Oil Change International

Will Shell Turn From Big Oil Into Big Energy?

By Andy Rowell       January 30, 2018

Shutterstock

On the surface, the good times are back for Big Oil. Later this week, Shell is expected to unveil its biggest profits in a decade since the oil price crash.

As the oil price recovers to over $65 a barrel last year, so do Shell’s fortunes, with reported earnings of nearly $16 billion.

The days of Shell being on the rocks—pummeled by a low oil price—seem over. So much so that the company even has Big Oil’s number one, Exxon, in its sights. Exxon’s reported earnings are expected to be slightly lower than Shell’s at a still significant $15.7 billion.

As Shell’s CEO Ben van Beurden recently said, “At the moment we are number two and we are closing in on number one. We almost have the tiger by the tail.”

As the two Big Oil companies battle it out for the number one spot, it is worth taking a step back and worth asking who will win the energy war not just in the next year, but in the decades ahead, which will be dominated by the upcoming renewable revolution, stranded assets and climate change. Many would argue that short term profits hide Big Oil’s longer term problems.

In the medium term, Shell is betting big on gas, despite the fact that environmentalists argue is it no solution to climate change. For example, you can read OCI’s report on gas here.

There are signs that the company is also taking some small steps into carbon disinvestment: As Reuters reported this week, “Royal Dutch Shell has spent over $400 million on a range of acquisitions in recent weeks, from solar power to electric car charging points, cranking up its drive to expand beyond its oil and gas business and reduce its carbon footprint.”

Before we all get too excited by this, there are two fundamental problems. One is that the investments are small change, as Reuters pointed out: “The scale of the buying spree pales in comparison to the Anglo-Dutch company’s $25 billion annual spending budget. But its first forays into the solar and retail power sectors for many years shows a growing urgency to develop cleaner energy businesses.”

In total, according to analysts, Big Oil has invested just over $3 billion on renewables acquisitions over the past five years, predominantly on solar. Again it is peanuts compared to the tens of billions the companies spend looking for oil.

And the other problem is the one we have just mentioned, gas. As Reuters noted, “The investments are not limited to renewables such as biofuels, solar and wind. Shell, as well as rivals such as BP, Exxon Mobil and Chevron, are betting on rising demand for gas, the least polluting fossil fuel, to power the expected surge in electric vehicles in the coming decades.”

Indeed, Shell may be betting on gas just at a time when the future of gas is in trouble. “The end of natural gas is near” is the title of an article this month on GreenBiz by Danny Kennedy from the California Clean Energy Fund. It states:

“Natural gas is no longer a contender or pretender, just a relic of the past, likely to fall as far and as fast as Old King Coal, and maybe faster … But I think it’s important to reflect that in 2017, for all its other problems in the clean-energy industry and our nation more broadly, the gas industry became, if not dead, at least a dead man walking.”

It is questions like these—is the market for gas in trouble?—that are supposed to be predicted by Shell’s long term planning unit. A really interesting article by Fortune looks at how this Big Oil dinosaur is desperate not to die out in the coming decades.

All the oil majors have scenario planning and Shell has been doing some serious head scratching. As Jeremy Bentham, Shell’s scenarios leader, said, “I am tasked with making sure that Shell isn’t a dodo.” So will Shell become extinct in the upcoming energy transition or dominate the new energy landscape?

The article argues that when Shell disinvested from most of its stakes in the tar sands last year, it was over long term fears over the oil price, rather than climate, that was the real concern.

The Shell scenarios team, Fortune noted, concluded that “global demand for oil might peak in as little as a decade—essentially tomorrow in an industry that plans in quarter-century increments.”

Hastened by the quickening uptake of renewables, Shell executives were alarmed by the dropping oil price:

“When the oil-demand peak came, Shell believed, petroleum prices might begin a slow slide, dipping too low to cover the costs of oil-sands production. This wouldn’t be just another oil-price cycle, a familiar roller coaster in which every down is followed by an up. It would be the start of a decades-long decline of the Oil Age itself—an uncharted world in which, in a phrase gaining currency at Shell, oil prices might be ‘lower forever.'”

As Fortune noted, “If Shell failed to prepare for this new energy landscape, it could wind up saddled with massive stranded assets: buried oil and gas that its shareholders paid billions to find, but that, because of softening demand, the company found itself unable to profitably drill and sell.”

Ben van Beurden, Shell’s CEO, told Fortune, “We won’t be sitting ducks. We are going to adapt.”

But adapt to what? “What is a challenge at the moment,” Beurden said, “is that we don’t know anymore where the future will go.” Beurden, Fortune said, is making strategic bets to transform “Big Oil into Big Energy.”

Finally it seems Big Oil has got the message. In response, many will argue it it too little, too late. Environmental groups have been telling the oil companies for decades of the need to disinvest from fossil fuels due to climate change, not just deny the problem of climate change.

But only now, when their very own corporate future is threatened by companies such as Tesla, have the oil companies finally decided to act. Will it be too late for them and us? Will Shell become a Dodo? Only time will tell.