Welcome to 2017!!!! I hope you were able to enjoy a few days over the holidays to relax. We sure saw some great football (topped by the Rose Bowl) and hockey (the Outdoor Centennial Classic in Toronto) games.
While 2016 was a bizarre political year, 2017 looks to be a brave new world, so let me lip-synch my way through a few bars to remind you that we will be on top of it all for you. To that end, as usual, I am forwarding a few of the top issues we expect to see in the energy and environment arena for 2017.
The 115th Congress launched today with quite a stir. While new members were being sworn in and Speaker Ryan was being elected, the House was backtracking on the outside ethics committee change after pressure from the Presidential Twittersphere. Anyway, while a dumb way to start, it did create some fun just 17 days before the Inauguration. Sounds Like they will be busy right away though passing Midnight Rules Relief Act, which allows the use of the Congressional Review Act to overturn regulations finalized in the waning days of an administration and the Regulations from the Executive in Need of Scrutiny Act that requires explicit congressional approval for major executive branch regulations. (H/T POLITICO ME) Good luck getting passed the Senate though.
While a short week, there are a few great events set for the week. Tomorrow, our friends at API hold its annual State of the Energy Industry event featuring CEO Jack Gerard at the Reagan Trade Center at 12:30 p.m. Also this week, the Consumer Electronics Show starts in Las Vegas. On Thursday, SAFE will release its autonomous vehicle report recommendations. Due to the unique challenges of regulating the rapidly evolving AV industry, the report outlines clear and actionable best-practices for industry designed to increase collaboration between developers and regulators and ultimately improve public trust in AV technology. You may also expect to hear more about this topic at next week’s launch of the world-renowned Detroit Auto Show. Also Thursday morning at JHU, EIA’s Adam Sieminski will present the findings of EIA’s “Annual Energy Outlook 2017” with projections of U.S. energy supply, demand, and prices.
Finally, congrats to our friend Sean Spicer, taking over the WH flak Jacket. Also, check out the recent opinion piece on EPA nominee Scott Pruitt from former White House Counsel C Boyden Gray, who helped author the 1990 Clean Air Act Amendments, the last time it was updated. As usual, call with questions…and on to the Top 10!!!
TEN ISSUES FOR 2017
- Roll Back Vs Reform – We have already heard the enviro community talking rollbacks, but there is a serious question about what a roll back is and what is a much-needed, long-overdue reform. This battle will be one of the key fights for the year, especially with the big tickets items headlining the list. While the Clean Power Plan, WOTUS rule and other oil & gas rules will attract most of the attention, smaller rules like last week’s DOE EE rules and other low-profile, but costly rules will likely be on the hit list. In the end, the fight will be less about the real policy substance and much more about messaging.
- Infrastructure = Projects = Pipelines = Jobs – We all know the role jobs played in the political campaign, which moves this to the very top of the new Administration’s agenda. And don’t think the infrastructure bug will just hit projects that weren’t favored by the Obama team. In fact, a rising tide lifts all boats so I expect clean energy projects will also see numerous opportunities. But the most obvious translation to the energy issue is through infrastructure. The last-minute, parting gifts handed to the environmental community over pipelines projects will likely fall away, but going forward, transmission lines, pipeline infrastructure, project development and road/mobility development will all be front and center priorities.
- Not So Much Confirmation, But Lots of Agency Reform – While Democrats are girding for battle on Trump Cabinet appointees, they are unlikely to stop any – especially the energy and environment picks – without an epic fail by a nominee at their confirmation hearing. What is more significant is what they will do when they land at the agencies. DOE’s Rick Perry, Interior’s Ryan Zinke and EPA’s Scott Pruitt will have significant structural reform on their plate and the question remains as to how that will go. Pruitt will likely face the most significant plate of big issues from the RFS to the Clean Power Plan to the waters rule. Perry and Zinke will face more lower-level structural reforms to their agencies. Between the confirmation battles and the new approach for the agencies, look for this fights to take up a large part of year one.
- We’ll Always Have Paris, REPRISED – Last year, this was our first issue, and it re-emerges as major issue again, but this time for a different reason. It is one of the most interesting questions of 2017 because of the new Administration’s unclear position. While enviros say that we must continue pushing the Paris agreement to maintain environmental progress and our credibility in the international community, opponents of the Paris agreement are largely split on it going forward. That disagreement centers on the fact that Paris doesn’t actually REQUIRE the U.S. to do anything. Some want to send a message by pulling out, but that may be more trouble than it’s worth. As with all issues now, it is becoming more of a message fight than an issue of substance and should reach a head in late 2017 at COP 23 in Bonn.
- Big or Small Ball on the RFS – The Renewable Fuels Standard (RFS) is always a policy fight magnet. Don’t expect 2017 to be any different starting tomorrow when API does its “State of American Energy” event. While the major fight over larger overall reform of the program has never been more live, there are smaller battles that played a major role last year that will likely resurface, especially with Carl Icahn leading the Administration’s Reg Reform effort. Either way, the fight over this program continues both in the policy and political arena.
- Looking at the Power of Rural America – Rural America played a major role in electing Donald Trump, and while always powerful on Capitol Hill, look for the rural economic agenda to play a more prominent role in many policy fights. Clean energy will also be an important piece of this effort as many rural communities see energy projects, efficiency programs and fuels policy as a form of rural economic development. From Rural electricity to broadband to credit union policy changes, rural economic development will likely be closer to the front burner, especially since rural voters stepped up, know they are powerful and will want to be heard.
- Offshore Winds Finally Blowing? – As the nation’s first offshore wind farm finally opened off the coast of Rhode Island, it seems that the long freeze for offshore wind in the US is finally thawing. The Deepwater Wind success was quickly following up by a major announcement by the Interior Department naming Statoil as 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 just under $42.5 billion. While the anxious wait seems to be over, watch for key policy questions and potential roadblocks from a new Administration that hasn’t exactly been a supporter of offshore wind.
- Clean Energy Staying Strong But Smarter – Speaking of clean energy, as I mentioned a rising tide lifts all boats so we expect clean energy projects to also see numerous opportunities, especially if the expected infrastructure build-out takes hold. But, expect the projects efforts to be less random. Projects that improve reliability, create jobs, are economically feasible and promote environmental goals will likely be able to garner bipartisan support and move forward. Projects that are a stretch and are reliant only on favorable tax policy or a constrained GHG mandate may struggle to get off the ground. As well for 2017, new CCS projects will finally make it to commercial operation, another positive step forward.
- Innovation Agenda Essential for Technology, Climate Future – For the past century, the US has lead on virtually every energy technology, from solar panels to clean coal. Common sense reforms that enable and inspire American ingenuity are essential to creating an energy future that will reduce emissions and advance the next generation of technologies that will continue to change the way we use energy. Private-public partnership can also add new value. Exciting efforts like Southern Company’s Energy Innovation Center, which looks for better, more reliable and more efficient ways to increase value, can play an important role in the overall effort. Southern is also a prime example of innovation leadership promoting several bold technologies like carbon capture, large-scale biomass, improved gas infrastructure, new wind and solar and new generation nuclear. We also saw technology innovation’s emergence on the global scene in the Breakthrough Coalition led by Bill Gates and the govt-to-govt “Mission Innovation” initiative, which were borne out of international discussions in Paris last December. Only a bold private-public innovation/technology partnership process like this by world and business leaders can achieve success.
- New Nuclear is Hear and Now – Nuclear energy is an essential and reliable part of any modern electricity grid. It keeps the lights on regardless of the weather – and does so with zero air pollution. The current construction of new reactors at Plant Vogtle which will run through its final stages before operation starts in 2018, hopes to create a new age of nuclear energy. Vogtle is part of the next generation of reactors that are significantly upgraded from those built in the 1970s. And many companies are innovating further on advanced reactors that will be far more versatile than today’s technology. In addition, new leadership at NEI will likely also make nuclear issue and more interesting read in 2017. Georgia Power has an ongoing photo timeline of progress/activity at Plant Vogtle that you can see here.
“When Oklahoma Attorney General Scott Pruitt is confirmed as the next administrator of the Environmental Protection Agency, he will inherit an agency that should be declaring victory in its 46-year battle for a cleaner, healthier environment. The next administrator must focus on reining in an agency that has far exceeded its original mission. Fortunately, Pruitt understands the EPA’s proper role and is the right man for the job.”
2007. Boyden Gray served as White House Counsel during the George H.W. Bush administration and as U.S. Ambassador to the European Union from 2006-2007. He was one of the architects of the 1990 Clean Air Act.
IN THE NEWS
DOE Finalizes Energy Efficiency Rules – DOE issued five new rules on December 29th that cover an eclectic mix of products, including the first national standards for uninterruptible power supplies, portable air conditioners and swimming pool pumps, which are based on a consensus agreement. For pool pumps, California has led the way with pool pump motor standards and Arizona, Connecticut, and Washington have followed. California and Oregon have previously set standards for uninterruptible power supplies as part of their battery charger standards. For walk-in coolers and commercial boilers, DOE’s latest actions would update existing national standards, originally signed into law by George W. Bush and his father, respectively. Manufacturers and installers of walk-in coolers negotiated the walk-in cooler levels with DOE and other stakeholders after a lawsuit invalidated some earlier standards.
Interesting Twist to Rules – Under the terms of an agreement developed as part of the settlement AHRI reached with DOE in its 2014 lawsuit concerning the original rule for walk-in coolers and freezers, there is a 45-day waiting period before the rules can be published in the Federal Register. This means that they will not be issued in final form during the Obama Administration and are, therefore, subject to review by the incoming Trump Administration. AHRI President Steve Yurek said the walk-in coolers and freezers rule was negotiated with AHRI member input and AHRI approved the negotiated provisions of the rule. Yurek added the commercial boiler rule was not developed through negotiations, but through the notice-and-comment process under which AHRI provided comments. AHRI continues to have significant issues with this rule, including our opposition to the proposed minimum efficiency levels for both oil and gas boilers which we feel overestimate the energy use of commercial packaged boilers, underestimates their installation costs, and overestimates the future shipments of commercial packaged boilers while underestimating the level of higher efficiency commercial packaged boilers that are currently in the marketplace. Yurek: “We continue to have concerns that the efficiency levels for these products has been set at a level that the margin of safety to properly vent the products of combustion has been significantly reduced. We look forward to working with the Trump Administration as it reviews recent DOE rulemakings prior to their being finalized.”
Analysts Report: Shale Drillers Expected to Recover – Shale drillers are set to ramp up spending on exploration and production next year as recovering oil prices prompt banks to extend credit lines for the first time in two years. The credit increase is small, but with major oil producers worldwide aiming to hold down production in 2017, U.S.-based shale drillers are looking to boost market share to take advantage of higher prices, and greater availability of capital will make that easier. Analysts at Raymond James North America-focused oil and gas producers are expected to increase capital investments by 30% next year.
Southern Moving on Larger Wind Strategy – As part of the company’s renewable development strategy, Southern Company recently rolled out a joint development agreement with Renewable Energy Systems Americas Inc. (RES) to develop and construct approximately 3,000 megawatts (MW) across 10 projects with commercial operation dates between 2018 and 2020. Additionally, Southern Power has signed agreements to purchase wind turbine equipment from both Siemens and Vestas for use at the facilities. Already, Southern owns more than 2,700 MW of renewable generation across 33 solar, wind and biomass facilities either announced, acquired or under construction. In total, the Southern Company system has added or announced more than 4,000 MW of renewable generation since 2012.
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.
MI Wind Farm Begins Operations – DTE Energy has started commercial operations at its 50MW Pinnebog wind farm in Michigan. The 30-turbine facility, which is in Huron County, started construction in early 2016. The wind farm is an expansion of the existing Echo wind park and employed more than 150 people during construction. DTE now has 30 full-time employees working at its Huron county renewable energy center in Bad Axe. In 2015, more than 10 percent of the energy provided by DTE was generated from a renewable source in Michigan.
ON THE SCHEDULE THIS WEEK
API’s Gerard to Hold Annual State of American Energy – API President and CEO Jack Gerard will deliver a major address tomorrow at the Reagan Trade building Atrium tomorrow at Noon to outline priorities for America’s oil and natural gas industry with New Congress and Administration. The United States is leading the world in the production of oil and natural gas while also leading the world in reducing carbon emissions. This game-changing milestone coincides with the start of a new administration and Congress. Voters from all parties want our nation’s leaders to address economic growth and accelerate job creation while developing an energy future that benefits all Americans. Gerard will deliver his annual address followed by a news conference for credentialed members of the media.
EIA Presents Updated Long-Term Energy Projections – The Johns Hopkins University SAIS Energy and Environment program will host EIA’s Adam Sieminski on Thursday at 10:00 a.m. Sieminski will present the findings of EIA’s “Annual Energy Outlook 2017” with projections of U.S. energy supply, demand, and prices including cases that address alternative assumptions regarding U.S. economic growth rates, domestic energy resources and technology, world oil prices, and the Clean Power Plan.
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 Thursday in Las Vegas at the Consumer Electronic Show. Due to the unique challenges of regulating the rapidly evolving autonomous vehicle (AV) industry, the report outlines clear and actionable best-practices for industry designed to increase collaboration between developers and regulators and ultimately improve public trust in AV technology. The event will be at the Las Vegas Convention Center in Room S227A and will explore the details of these recommendations and strategies for implementation. Members of the Commission and SAFE staff will be available to answer questions about the Commission’s work and its implications for American energy security, including former Chairman of the National Transportation Safety Board Mark Rosenker, former Director of National Intelligence Admiral Dennis C. Blair, Paul Brubaker of the Alliance for Transportation Innovation, former GM exec Robert Lange and Cuneyt Oge, President of SAE International.
IN THE FUTURE
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.
Transportation Research Board Hosts 96th Annual Meeting – Next Sunday, January 8th through Thursday, January 12th, the Transportation Research Board hosts its 96th annual meeting at the Walter E. Washington Convention Center in DC. The information-packed program is expected to attract more than 12,000 transportation professionals from around the world. The TRB Annual Meeting program covers all transportation modes, with more than 5,000 presentations in nearly 750 sessions and workshops addressing topics of interest to all attendees—policy makers, administrators, practitioners, researchers, and representatives of government, industry, and academic institutions.
Report Looks at Energy Storage Opportunities for Emerging Markets – Next Monday morning at the IFC Headquarters, IFC and ESMAP will present a new report on Energy Storage. Energy storage is a crucial tool for enabling the effective integration of renewable energy and unlocking the benefits of solar and wind power for emerging markets. The report outlines the principal uses, drivers, and challenges regarding the commercialization of energy storage technologies in low- and middle-income countries, providing a forecast of expected deployments by region and impacts on energy access, grid stability, and other key areas. Technical review was provided by the U.S. Department of Energy’s Clean Energy Investment Center. The presentation will feature the report’s findings, followed by insights on trends in energy storage technology and the financing landscape for this sector.
Forum to Look at Economics of Germany’s Energy Transition, Transatlantic Relations – Next Monday at noon in Fairfax, the Greater Washington Warburg Chapter of the American Council on Germany and the Northern Virginia Regional Commission will host a discussion and luncheon with Dr. Claudia Kemfert, Professor of Energy Economics and Sustainability at Berlin’s Hertie School of Governance. The event will focus on the economics of the German Energy/Electricity transition.
Stanford to Host Clean Energy Forum – On Tuesday January 10th at noon at the National Press Club, Stanford University’s leading energy and environmental research institutes, the Stanford Precourt Institute for Energy and the Stanford Woods Institute for the Environment, will convene a panel session that will highlight clean energy innovation as a crucial component of efforts to combat climate change and ask how the United States can lead global efforts to develop and deploy advanced energy technologies. The panel will include Stanford’s Sally Benson, John Dabiri and Michael McGehee.
WRI to Detail Stories to Watch for 2017 – Next Wednesday, January 11th at 9:00 a.m., the World Resources Institute hosts its Stories to Watch for 2017 forum. Stories to Watch is an annual go-to event for DC’s top policymakers, business executives, thought leaders, and media who want to get ahead on the coming year. As we enter what looks like a dynamic, unpredictable year, WRI President & CEO Andrew Steer, will share insights on global trends and emerging issues related to climate, energy, economic development and sustainability. He will help to unpack the connections between rising populism and nationalism, and what this means for people and the planet.
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.
Forum to Look at Better R&D Methods – The Information Technology & Innovation Foundation (ITIF) and Brookings will hold a forum on Wednesday January 11th at 10:00 a.m. to discuss how the incoming administration and Congress can bolster technology transfer and commercialization policies to ensure that federal R&D investments yield stronger commercial results. ITIF and the Brookings Institution have recently proposed 50 innovative policy ideas to more quickly and effectively get technologies out of the laboratory and into the private sector.
Forum to Look at Korea/Japan/US Nuclear Cooperation – On Wednesday, January 11th at 10:45 a.m. in 902 Hart SOB, the Global America Business Institute (GABI) will hold a forum on the prospects for nuclear energy following the recent U.S. presidential elections and the opportunities for trilateral civil nuclear cooperation among the Republic of Korea, Japan, and the United States. Speakers will include Idaho Sen. Mike Crapo, DOE’s Acting Assistant Secretary for the Office of Nuclear Energy John Kotek and a panel of experts.
World Bank Forum to Look at Mobility – The World Bank and the EMBARQ mobility initiative of WRI Ross Center for Sustainable Cities will host Transforming Transportation 2017 on Thursday, January 12th and Friday, January 13th. Physical and virtual connectivity is a critical factor of today’s competitiveness and economic growth. By facilitating the movement of people, goods and information, the World Bank’s Transport and ICT Global Practice enable economic and social development, and increase access to jobs, health, and education services. Transport is also at the heart of the climate change solution, as one of the largest energy users and emitters of greenhouse gases.
GCs to Discuss Key Issues – On Thursday, January 12th at 11:30 a.m., the Energy Committee of the D.C. Bar Environment, Energy and Natural Resources Section and the Environmental Law Institute will host a forum moderated by Assistant Attorney General John Cruden. Cruden will lead a discussion with the General Counsel of various federal agencies to discuss the future issues likely to arise for the new Administration. Other speakers will include EPA’s Avi Garbow, USDA’s Jeffrey Prieto and several others.
Forum to Look at Climate Adaptation – The US AID’s Atlas Project will host a forum on Thursday, January 12th at 4:00 p.m. discussing the role of decentralized governance for climate adaptation. Dr. Tim Finan and Dr. Mamadou Baro of the University of Arizona share the results of a research case study from rural Mali, where a system of decentralized governance was introduced almost three decades ago. The study draws upon evidence from villages, communes, and regions of south-central Mali to examine the effectiveness of local governance institutions in building community-level resilience to climate change stresses. This research was conducted for USAID’s ATLAS project.
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.
AEI to Host Carbon Tax Discussion – AEI will host a panel discussion on carbon taxes on January 26th looking at whether the standard “efficiency” arguments offered by some conservatives in favor of a carbon tax make any sense at all given the various incentives of Congress and the bureaucracy. More on this as we get closer.
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.