So it finally is the week of the Christmas Holiday. I suspect that means it will slow down a little. (I hope, although it hasn’t yet as of Noon today…) In the meantime, we await the last major cabinet announcement from President-Elect Trump: USDA Secretary. The leading candidate in the rumor mill is North Dakota Democratic Sen. Heidi Heitkamp, who has been in line with Trump positions and very strong on energy and ag issues. Remember, the NRECA should be one of your primary calls when the USDA announcement is made.
As well, we are starting to see significant discussion about the Republican tax overhaul plan that features a border adjustment plan. A pair of new studies over the weekend from PIRA and the Brattle Group say the border adjustment would amount to a $10-a-barrel tax on imported crude oil, raising costs for drivers buying gasoline by 25 to 30 cents a gallon. Our man in tax Havana, Curt Beaulieu is all over the issue and can be a huge help on the impacts. You can reach Curt at 202-828-5806 or email@example.com.
As we move through the holidays, we fully expect to hear rumbles from opponents of the energy and environmental cabinet nominees. We are happy to be your story sounding board, addressing your questions, providing background and offering assistance to get the full picture on these issues.
As for the holidays, we will be around and available should you need a comment or want to just catch up. Please feel free to call.
Important news on the offshore wind front: Late Friday, our friends at Statoil were declared the provisional winner of the U.S. government’s wind lease sale of 79,350 acres offshore New York. I have more details below.
Secondly, we know Metallica will be touring in 2017 with their new “kick-a–“ album Hardwired to Self-Destruct. But you may not have heard last week that “Live,” the soulful 90s band from York, PA, has resolved its legal conflicts and will reunite for new music and a 2017 tour. More as we hear on both.
Special birthday wishes to our friend John Walke of NRDC, an avid update reader and Twitter/Facebook commenter. I want to say 49, but that’s what we all say when we get there…
And finally, congrats to long-time White House and congressional advisor Richard Russell who was named today by new Senate EPW Chair John Barrasso to be Republican staff director of the Committee.
As you know, every year, before Christmas, I do a Christmas Note filled with holiday cheer and some good quips…so , here we go:
It is the week of Christmas and all through DC; we’ll have a new President, Congress and direction come January.
New appointees for Energy, State, Interior, EPA; enviros using same talking points for each, every day.
The energy boom will return under this new group, as the Obama (Enviros) agenda and policies fly the coop.
Who really knows where a President Trump will go, but thanks to pollsters and predictors, no of us thought we need to know.
One thing is clear, we are heading a new way. New people, new politics, new tweets each and every day.
Oh yes, the President will continue to use 3 AM twitter, his social media craziness is making us all very bitter.
So as we wrap another crazy political and energy year, I hope you will take a few minutes to share…
Some fun, peace and joy… and more holiday cheer, mostly because it really is the best time of year.
We’re always working hard to be there for you; interviews, sources, background – something is always new.
So as you settle in for the holidays during this week and next; The Winter Classic, some football, some well-deserved rest.
From Our Bracewell family to yours, have a great holiday season; Can’t wait to make next year even better for whatever reason.
“We are excited to have submitted the most competitive bid in a highly attractive project, Statoil’s first offshore wind lease in the United States. We now look forward to working with New York’s state agencies and contributing to New York meeting its future energy needs by applying our offshore experience and engineering expertise.”
Irene Rummelhoff, Statoil´s executive vice president for New Energy Solutions, following Statoil being named the winner of Friday’s NY Offshore Wind Auction
IN THE NEWS
Statoil Wins NY Offshore Wind Auction – Statoil has been declared the provisional winner of the U.S. government’s wind lease sale of 79,350 acres offshore New York. Statoil will now have the opportunity to explore the potential development of an offshore wind farm to provide New York City and Long Island with a significant, long-term source of renewable electricity. Statoil submitted a winning bid of $42,469,725 during the online offshore wind auction concluded today by the U.S. Department of the Interior’s Bureau of Ocean Energy Management (BOEM). The lease comprises an area that could potentially accommodate more than 1 GW of offshore wind, with a phased development expected to start with 400-600 MW. The New York Wind Energy Area is located 14-30 miles (30-60 km) offshore, spans 79,350 acres (321 km2), and covers water depths between 65 and 131 feet (20-40 meters). Statoil will next conduct studies to better understand the seabed conditions, the grid connection options and wind resources involved in the lease site.
U.S. Energy Security Continues Marked Improvement According Chamber Analysis – The Chamber’s Energy Institute said America’s energy security is at its strongest point in two decades. The U.S. Chamber Institute for 21st Century Energy’s Index of U.S. Energy Security Risk employs 37 different energy security metrics in four major areas of risk: geopolitical, economic, reliability, and environmental. A lower Index score indicates a lower level of risk. The 7th annual edition of the Index covers 1970-2040 and incorporates the latest historical data and forecast models. In 2015—the most recent year available—risk dropped 3 points, to 78.0, the lowest level since 1996. The biggest improvements within the Index were in areas related to measures of oil and natural gas sector, such as imports, import expenditures, and oil prices, and to energy efficiency. Despite slumping prices, domestic crude oil output still increased by over 7%, though that increase is off the pace of previous years. Natural gas production achieved a record high, with a 5% increase in 2015. However, despite the overall good news, there were still some warning signs. Crude oil price volatility rose significantly, driven by the desire of some large producing countries to capture greater market share by driving prices down sharply. Rapid shifts in prices in either direction—volatility—can create unstable market conditions that increase energy security risks. In addition, electricity capacity margins—the amount of unused power capacity—have declined, increasing the vulnerability of America’s electric grid in the event of a disruption. The Index and its companion, the International Energy Security Risk Index, are available at www.energyxxi.org/energysecurity. The U.S. Index is once again available in an online, interactive web tool format, which makes it easy to see how various metrics change from year to year.
Study Says Republican Border Tax Proposal Will Increase Gas Prices – A new study on an obscure Republican tax proposal to impose a border-adjustment to limit eliminate companies’ incentives to move their headquarters overseas would have costly impact on refinery operations. By eliminating the tax deductibility of imports, the border adjustment would raise costs for refiners that import oil. In turn, that could raise prices for consumers. The border adjustment would amount to a $10-a-barrel tax on imported crude oil, raising costs for drivers buying gasoline by up to 25 cents a gallon, the energy analyst group PIRA Energy Group warned this week. The report warned of a “potential huge impact across the petroleum industry,” even while noting that the tax reform plan faces many obstacles to passage. As mentioned earlier, my colleague and former Senate Finance Tax Counsel Curt Beaulieu Ii all over the details.
AGs Call for Plan to Withdraw from CPP – West Virginia AG Patrick Morrisey and Texas AG Ken Paxton led a 24-state coalition urging President-elect Donald Trump and congressional leaders to withdraw President Obama’s so-called Clean Power Plan and take the necessary steps to ensure similar or more extreme proposals never again take shape. The bipartisan letter – addressed Wednesday to Vice President-elect Mike Pence, Senate President Mitch McConnell and House Speaker Paul Ryan – suggests a four-point strategy that begins with President-elect Trump rescinding his predecessor’s Climate Action Plan on day one. The coalition suggests President-elect Trump follow with formal administrative action to withdraw the Power Plan and related matters in court. Such action will properly effectuate the rule’s withdrawal, while negotiating an end to pending litigation. Finally, the coalition recommends Congress take longer-term legislative action. The proposed legislative fix aims to prevent any future U.S. Environmental Protection Agency from drafting similarly unlawful and/or more extreme rules. The coalition suggests the new White House work with Congress to adopt such legislation.
Deepwater Wind Projects Starts Operation – The nation’s first offshore wind farm has opened off the coast of Rhode Island, producing energy for the grid. Deepwater Wind built five turbines 3 miles off Block Island to power about 17,000 homes, a project costing about $300 million. Deepwater Wind CEO Jeffrey Grybowski calls the opening a momentous occasion that unlocks the code of how to do offshore wind in the U.S. at a crucial time when states are trying to figure out how to replace aging power plants.
EIA Report Says Reserves Declined – EIA said last week that U.S. crude oil proved reserves declined 4.7 billion barrels (11.8%) from their year-end 2014 level to 35.2 billion barrels at year-end 2015, according to U.S. Crude Oil and Natural Gas Proved Reserves, Year-end 2015. U.S. natural gas proved reserves decreased 64.5 trillion cubic feet (Tcf), a 16.6% decline, reducing the U.S. total to 324.3 Tcf at year-end 2015. The significant reduction in the average price of both oil and natural gas between 2014 and 2015 resulted in more challenging economic and operating conditions, an important factor in determining proved reserves. These price developments, reflected in a nearly 50% decline in average West Texas Intermediate crude oil spot prices (from $95 per barrel in 2014 to $50 per barrel in 2015) and a more than 40% decline in the natural gas spot price at the Louisiana Henry Hub (from $4.55 per million Btu in 2014 to $2.62 per million Btu in 2015) led to reduced drilling activity and downward revisions in proved reserves across a broad range of U.S. producers in 2015.
ON THE SCHEDULE THIS WEEK
Electoral College Vote – December 19th
Brookings Panel Looks Climate, Energy Security with Japan – Tomorrow at 2:00 p.m., the Center for East Asia Policy Studies and the Cross-Brookings Initiative on Energy and Climate will host a distinguished panel of climate policy experts from the United States and Japan to address critical issues for the future of the climate agenda and U.S.-Japan relations. What does the nature of the Paris commitments mean for the task of implementation? What kind of domestic transformation is required in each country, e.g., what are the choices to be made in energy policy? And how can Japan and the United States collaborate on innovation efforts to move away from carbon dependent-economies? Panelists will include our friend David Victor and other Japanese and US climate and energy security experts, as well as Atsuyuki Oike, Deputy Chief of Mission of the Embassy of Japan in the United States of America.
IN THE FUTURE
SAFE to Roll Out AV Policies at CES Las Vegas – Securing America’s Future Energy (SAFE) will roll out its autonomous vehicle report recommendations on January 5th in Las Vegas at the Consumer Electronic Show.
State of Oil, Gas Event Slated – API will host its annual State of the Oil & Gas industry event in early January. More on this as it becomes available.
Detroit Auto Show Rolls Out – The North American International Auto Show (NAIAS) will roll out from January 8th to 22nd at Detroit’s Cobo Hall. Official press conferences begin with Disney Pixar on Sunday January 8th as the 2017 NAIAS Press Preview will host a series of events until Tuesday January 10. With over 300 exhibitors all under one roof, ranging from global automakers to suppliers to tech startups, NAIAS will truly be the mobility epicenter and will showcase the full automotive ecosystem. NAIAS expects to have over 5,000 credentialed journalists from 60+ different countries attend Press Preview, keeping NAIAS strongly in the lead among domestic shows in terms of global media coverage.
Donohue to Discuss State of Business – U.S. Chamber of Commerce President and CEO Thomas J. Donohue will host his annual “State of American Business” address as well as the Chamber’s 2017 Open House on January 11th. Donohue outline the top challenges and new opportunities facing the American business community and introduce the Chamber’s 2017 policy agenda.
Smart Cities Conference Set – The Smart Cities International Symposium, will be held on January 24-25 in Chicago. The conference examines the latest technology advances and business models for the 21st Century connected city.
INAUGURATION DAY – January 20
POLITICO Sets Inauguration Hub – On January 20, POLITICO will transform the top floor of The W Hotel into its 2017 Inauguration Hub. With prime views of the Inauguration Parade route from our all-day networking lounge, the Inauguration Hub will be the premier destination for DC influencers to experience this historic moment. Live programming will include a full day of newsmaker interviews and discussions offering first-hand insights from new players in politics and policy, and an in-depth look at the changes ahead in the new Washington. Full schedule of programming and speakers to be announced. Check out www.politico.com/inaugurationHub for updates.
Washington Auto Show Set – The Washington Auto Show will be held on January 27th to February 7th at the Walter E. Washington Convention Center. 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 on January 24th and 25th. The events of the 25th will be on Capitol Hill in the Kennedy Caucus Room.. Speakers will include Michigan Senator Gary Peters and Rep Debbie Dingell, Our friend Joe White of Reuters and GMU’s Adam Thierer and the Chamber’s Matt Duggan. The Washington Auto Show is also the largest public show in Washington, D.C. Over the course of its many years this beloved and historic D.C. tradition has attracted Washingtonians of all stripes – and political affiliations. Along with the engineering prowess on display among the more than 600 new models from over 35 manufacturers, the 2017 show will feature VIP tours led by award-winning automotive writers and a special exhibit area for live painting of “art” cars.