Daily on Energy: Utilities to push back on Trump tax bill, budget, and ‘Green New Deal’

Jim Matheson, former Utah Democratic congressman and the president and CEO of the National Rural Electric Cooperative Association, tells John in an exclusive interview that 2,000 of his members will descend on Congress and the administration to talk about a few key issues.

First, the president’s fiscal 2019 budget resurrects, for the third time, a privatization scheme to sell-off the transmission lines of federal utility companies like the Tennessee Valley Authority and Bonneville, which are Matheson’s members. The plan has been shown to raise costs for consumers if implemented.

“We have always opposed that [and] we have tremendous bipartisan support that agrees with us on that position, but we never stop talking about it because it is such an important issue,” Matheson says.

They will be working with other utility trade groups to make sure the language in the budget request does not make it into authorization or appropriation bills.

The “unintended” consequences of the tax overhaul: They also will raise a significant problem with the 2017 tax cut bill that would eliminate some of Matheson’s members’ tax-exempt status if they receive federal emergency money, for example, in response to a major disaster like the flooding that is occurring in much of the United States.

The rural co-ops are consumer-owned, relying on their tax-exempt status to serve their customers. Removing it would expose them to tax liability and their consumers to increased costs. It would also undermine many of the rural utilities’ key initiatives for broadband expansion, cybersecurity, and other grid improvements by taxing the money they receive from the federal government in cost-sharing programs to begin these projects.

The IRS says legislation is required to fix the problem, Matheson says. “Everyone agrees this was an unintended consequence, so we are trying to push this through,” he adds.

The cost of the “Green New Deal”: The utilities will also be addressing the progressive “Green New Deal” by raising two questions: How much it costs, and whether it will lead to a more reliable grid — “if you flip the switch does the light come on?”

As for cost, Matheson notes that there are two big considerations: The cost of ongoing operations — the effect on the current grid system — and the cost of transitioning to newer resources like more renewables.

A big turnout: There will be so many of the group’s members in town that they had to schedule discussions with the agencies and administration in hotel meeting rooms, because getting through security at, say, the Department of Energy would be too cumbersome, Matheson says.

There won’t be any meetings at the White House, but officials with the Energy and Agriculture Departments are definitely on the list.

The lobbying fly-in will begin early in the week, April 28-30, and will include a legislative conference with lawmakers that will be open to press.

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BIDEN TO COMPETE ON CLIMATE CHANGE WITH ‘MEAT AND POTATOES’ APPROACH: Joe Biden might not be known as the most hardcore climate change hawk, but he is the Democrat best suited to build a broad coalition to address the problem, supporters say.

“Biden is going to talk about climate change as a meat-and-potatoes issue,” Paul Bledsoe, a former climate change adviser in the Clinton administration, told Josh. “It’s costing us money now, and it could be making us money if we do it right.”

Biden’s blue-collar campaign and background positions him to make the economic case for addressing climate change with unions that are skeptical of the “Green New Deal” because it would harm workers by phasing out fossil fuel industries.

“He can appeal directly to unions with a robust climate change economic agenda with credibility most of the Democratic candidates can’t,” Bledsoe said

Biden, former vice president to Barack Obama, has not commented on the “Green New Deal,” which most of his competitors have rushed to endorse.

He has a lengthy record: But he has a track record in the Obama administration of enacting policies that have helped reduce emissions and lower the cost of clean energy, allies say.

In one of his first tasks, Biden helped implement Obama’s economic stimulus package, known as the Recovery Act of 2009, dedicating $90 billion to clean-energy programs.

Later, Biden participated in negotiations with world leaders over the Paris accord.

Read more of Josh’s report here.

OIL INDUSTRY PRODS EPA TO SCRAP TRUMP’S ILLEGAL ETHANOL PLAN: The American Petroleum Industry joined with vehicle groups on Thursday to call on the Environmental Protection Agency to scrap the entirety of its plan to up the amount of ethanol in the nation’s gasoline supply.

Frank Macchiarola, API vice president for downstream operations, said on a call with reporters that the groups will be submitting comments to EPA detailing how the proposed rule, implementing Trump’s plan, is illegal under the Clean Air Act.

The proposed rule has two parts: Allowing the sale of 15% ethanol fuel blends year-round; and taking steps to lower the price of ethanol fuel credits that refiners require to comply with EPA’s annual ethanol mandate, or Renewable Fuel Standard.

The E15 piece of the rule is illegal and would require congressional approval to implement, Macchiarola says. And the ethanol credit provisions are a “solution in search of a problem” and would likely cause more headaches than they would remedy.

API will be joined in its comments by the National Marine Manufacturers Association, representing boat makers, and the American Motorcycle Association. Both oppose the use of E15 because of the risks it poses to both boat and motorcycle engines.

They argue that EPA has not taken the necessary steps to make consumers aware of the risks E15 poses.

TRUMP’S SANCTIONS COULD KNOCK OUT VENEZUELA OIL PRODUCTION INDEFINITELY: Venezuela will soon pass the point at which it will be unable to recover lost oil production if U.S. sanctions persist into next year, the federal government said on Wednesday.

The Energy Information Administration said that Venezuela, the sole OPEC member in the Western Hemisphere, has lost about 100,000 barrels a day in production since February due to Trump administration sanctions.

That means that annual production will be hard to make up, and the shortfall will likely place upward pressure on oil prices as new U.S. sanctions on Iranian oil imports kick in.

Read more from John’s story here.

CHINA’S BELT AND ROAD INITIATIVE BRINGS ENVIRONMENTAL RISKS, REPORT WARNS: China’s Belt and Road Initiative could cause serious environmental harms and dramatically increase global greenhouse gas emissions, unless participating countries institute safeguards, Columbia University’s Center on Global Energy Policy said in a report released Thursday.

Beijing on Thursday is hosting leaders from dozens of countries at its second “Belt and Road Forum,” which is expected to focus on environmental concerns.

“Many existing BRI investments will cause serious local, regional, and global environmental impacts,” reads the report.

Belt and Road banks on energy: The Belt and Road Initiative aims to enhance international trade through a network of infrastructure projects across Central and Southeast Asia, the Middle East, and Africa, with the Chinese providing $1 trillion in investments. Projects include highways, railroads, thermal power plants, hydropower plants, nuclear power plants, electricity transmission systems, oil and gas pipelines, mining operations, and more.

The Chinese have also focused on coal investments in the early years of the initiative, lending at least $4.68 billion per year for coal plants, the report says, along with a warning that they could lock-in high-emission infrastructure.

The 66 participating countries already represent more than 55% of global carbon dioxide emissions.

How to protect the environment: In addition, some of the participating countries are poor, developing economies that lack effective governance systems, especially for environmental protection.

The report recommends China and its partners establish binding environmental review procedures for projects.

CLEAN ENERGY INDUSTRY EARNED RECORD REVENUES IN 2018 WORLDWIDE: Total revenue for the clean energy industry reached a record $1.6 trillion in 2018, according to a report released Thursday.

The clean energy business group Advanced Energy Economy says that amount of revenue makes the industry equal to global tourism, bigger than pharmaceuticals, and twice the size of airlines.

The U.S. market alone hit $238 billion last year, growing 11% from 2017.

“Growth of the advanced energy market in the United States over the past seven years has been truly remarkable,” said Nat Kreamer, CEO of Advanced Energy Economy.

Of the $25 billion overall increase in U.S. clean energy revenue, the bulk came in three segments: Advanced transportation, led by growth in electric vehicle sales; building efficiency; and growth in advanced fuels such as ethanol and biodiesel. Solar, wind, and energy storage also experienced revenue growth.

The Rundown

Wall Street Journal Asian companies pull back from Iran amid US pressure

New York Times Occidental bids $38 Billion for Anadarko, challenging Chevron

Washington Post How a lawyer, a lobbyist and a legislator waged war on an Alabama Superfund cleanup

Bloomberg Trump’s stand on Iranian oil gives ammo to Modi’s opposition

Calendar

FRIDAY | April 26

9 a.m., Dallas. The EarthX environmental expo, April 26-28, kicks off in Texas, the largest environment and energy gathering. Former Trump climate adviser George David Banks will be addressing the expo’s energy conference, along with conservative clean energy advocates ClearPath, with Sen. Lindsay Graham, R-SC, opening the conference. Energy Secretary Rick Perry also announced he will be attending.

THURSDAY | May 2

10 a.m., 366 Dirksen. The Senate Energy and Natural Resources Committee holds a hearing to consider the following nominations: Daniel Jorjani to be solicitor of the Department of the Interior; and Mark Lee Greenblatt to be inspector general of the Department of the Interior.