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MEMORIAL DAY KICKS OFF SEASON OF HIGHER FUEL PRICES, RECORD-SETTING TRAVEL: Gasoline prices will begin to ratchet up on Memorial Day and they won’t stop rising until after Labor Day, the federal government projected ahead of the holiday weekend.
Fuel prices are slightly lower than last year going into the holiday weekend, but that won’t last long, the Energy Information Administration said in its latest oil analysis.
This year, the average price for regular gasoline has increased by 16 cents per gallon, or 6%, since April, the EIA’s Week in Petroleum showed.
Demand for gasoline is going up, tightening the market: Increased demand for gasoline is part of the reason for the rising prices, in tandem with shrinking gasoline inventories.
Nearly 43 million Americans are projected to travel this weekend, which is around 1.5 million more travelers than a year ago. EIA says it will be the highest travel volume experienced for the Memorial Day holiday in 14 years.
A perfect storm for higher prices through September: Both increased demand and lower fuel inventories create the perfect circumstances for a fuel price rise throughout the rest of the summer. EIA says the price surge will begin this weekend and continue through Labor Day.
The average price of gasoline will be at least 7 cents higher than last summer, rising to $2.92 per gallon. The current average price going into the holiday weekend is $2.85 per gallon.
California prices the highest in the nation: EIA warns that average prices will be much higher depending on the region of the country.
West Coast and Rocky Mountain average fuel prices are already well beyond the projected national high of $2.92 per gallon. Average West Coast prices reached nearly $4 per gallon as of May 20, and Rocky Mountain regional prices averaged $2.98 per gallon.
Oil prices not mattering as much: Although oil prices will be slightly lower than last summer, it won’t lower gasoline prices, EIA said.
Despite lower crude oil prices, higher gasoline demand and tighter inventories are raising the marginal price of producing the fuel.
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PROGRAMMING NOTE: Daily on Energy will not publish on May 27, Memorial Day. It will be back in your inboxes on Tuesday, May 28. Enjoy the holiday weekend!
TRUMP’S ETHANOL FUEL RULE SET TO BE ROLLED OUT NEXT WEEK: The Environmental Protection Agency is in the final stretch of issuing new regulations next week that will drive more ethanol into the nation’s fuel system in a bid to help corn farmers in Iowa.
President Trump said Thursday that the restrictions on 15% ethanol fuel blends are “ridiculous” and the rule changes will be “tremendous” for corn farmers.
“I made a promise during the campaign that I was going to do it,” Trump added. “I don’t know if it had an impact, but I won Iowa by a lot.”
Ethanol industry lobbyists in Washington and Iowa see EPA meeting the June 1 deadline for issuing the rule allowing higher blends of ethanol to be sold year round, instead of being limited to the fall and winter months.
But in order to meet the June 1 deadline, EPA might be leaving key parts of the rule that would benefit oil refiners on the cutting room floor.
One ethanol industry official told John that most of the oil refinery pieces of the rule were not going to work anyway, and were too complex and not ready for prime time.
Other renewable fuel lobbyists were skeptical of the regulation’s effect for corn farmers, given that EPA continues to grant oil companies waivers to allow them not to blend ethanol in gasoline.
The Trump EPA has granted dozens of the refinery exemptions, allowing oil companies to forgo meeting the requirements of the Renewable Fuel Standard, requiring them to blend billions of gallons of ethanol annually.
The refinery waivers have removed billions of gallons of ethanol from the market, so implementing the E15 regulations that would introduce tens of millions of new gallons won’t be enough, say industry sources.
DUCKWORTH ACCUSES EPA OF DECEPTION, CALLS FOR PROBE INTO ETHANOL WAIVERS: Illinois Democrat Tammy Duckworth asked the Environmental Protection Agency’s inspector general Thursday to investigate whether the agency broke the law in granting dozens of waivers to the oil industry to not blend corn ethanol into the gasoline supply.
Duckworth said new documents show that EPA has deceived members of Congress about its reasons for granting 35 small refinery exemptions in the last two years, compared to the seven granted under the Obama administration.
Read John’s full story here.
JOHN DELANEY SPLITS WITH DEMOCRATS BY EMBRACING CARBON TAX: Presidential candidate John Delaney released a $4 trillion plan Thursday to fight climate change that calls for a carbon tax, contrasting himself with follow Democrats who have not endorsed carbon pricing.
“We need a real plan to hit our goals, and we have to listen to actual scientists,” Delaney said. “This is a real plan that all Americans can support.”
A former congressman from Maryland, Delaney co-sponsored a bipartisan carbon tax and dividend bill last year that would return the revenue to Americans to offset higher energy prices. His new proposal is also for a carbon tax and dividend.
Carbon pricing moves to backburner: But other Democratic candidates who’ve released climate change plans, such as Washington Gov. Jay Inslee, Sen. Elizabeth Warren of Massachusetts, and former Texas Rep. Beto O’Rourke, have not included a carbon tax in their proposals.
However, Pete Buttigieg, mayor of South Bend, Ind., recently proposed a carbon tax and dividend.
DEMOCRATS LAUNCH BICAMERAL PROBE INTO EPA’S CLEAN CAR RULES: Senior Democrats from both the Senate and House launched an investigation on Thursday into contradictory statements made by Environmental Protection Agency Administrator Andrew Wheeler regarding a proposal to roll back Obama-era clean car rules.
House Energy and Commerce Committee Chairman Frank Pallone, D-NJ, joined with Sen. Tom Carper of Delaware, the top Democrat on the Environment and Public Works Committee, in pressing Wheeler for documents related to proposed rules to undo fuel efficiency and greenhouse gas regulations for cars and light trucks. The final rule is due this summer.
The Democrats requested internal briefing materials and analyses related to the Trump administration’s softening of the vehicle regulations.
The Democrats explained that they are seeking the information due to “numerous comments from Administrator Wheeler, including statements made to Congress, that plainly contradict data presented to him by EPA’s own experts,” according to Pallone’s office.
The letter highlights numerous legal and technical deficiencies with EPA’s proposal, while underscoring statements made by Wheeler at recent budget hearings that contradicted the analysis of the proposed regulation.
The Democrats’ biggest concern is Wheeler’s comments that the Trump car rules would reduce carbon dioxide emissions at the same level as the Obama-era rules, which they say in the letter is a mischaracterization.
“These and other statements like it are remarkable since analysis in the proposed rule clearly demonstrates that carbon pollution will increase by 8 billion tons during this century if the Trump Administration proposal is finalized,” the Democrats wrote in the letter.
NEW NATURAL GAS SAFETY RULES GO TO WHITE HOUSE: The White House has begun its final review of new natural gas pipeline safety rules that industry calls the most significant update of safety procedures for pipelines in nearly 50 years.
The Department of Transportation’s Pipeline and Hazardous Materials Safety Administration sent its gas transmission pipeline safety rule to the White House Office of Management and Budget for final review on Thursday.
The pipeline industry has been urging the Transportation Department to expedite the rule’s final review since February.
RURAL UTILITIES GET PENSION RELIEF: Rural utilities were relieved when the House passed a bill on Thursday lowering the premiums that non-profit cooperative electric companies have to pay to the federal government.
“Electric co-op pension plans pose nominal risk of default, yet co-ops continue to pay [the federal Pension Benefit Guaranty Corporation] premiums as if they were Fortune 500 companies with higher risk profiles,” said Jim Matheson, CEO of the National Rural Electric Cooperative Association, after the passage of the SECURE Act.
More than 880 co-op utilities in 47 states participate in a national pension plan that covers 56,000 employees.
The trade group’s lobbying efforts in April are credited for the change in the pension security rules. At the group’s April legislative meeting, more than 2,000 co-op representatives raised the issue with members of Congress.
Matheson’s group is also looking to get Congress to make changes to parts of the 2018 tax reform bill that inadvertently removed the utilities’ tax exempt status if they receive grants from the federal government.
DEMOCRATS INTRODUCE BILL TO BLOCK TRUMP PLAN TO MOVE USDA OFFICES: Senate Democrats introduced legislation Thursday, the Agriculture Research Integrity Act, to block Secretary Sonny Perdue’s plan to move the USDA’s National Institute of Food and Agriculture and the Economic Research Service out of the Washington area.
“This proposed move – coupled with other efforts to undermine their work – is part of a broader effort by the Trump Administration to banish facts and science from policy decisions,” said Sen. Chris Van Hollen, D-Md., the lead author of the bill.
News reports this week showed a staggering level of employees leaving the agency since Perdue announced the proposed reorganization.
The senators on the bill said experts agree that Perdue’s plan would undermine the agency’s effectiveness and relevance, and rank-and-file staff opposes the move.
The Rundown
Business Insider Oil markets tank amid trade woes
Greentech Media Energy Department seeks lighter offshore wind turbines
New York Times Climate change is gaining traction, but Jay Inslee’s campaign is not
NPR Finding new uses for old coal plants
Calendar
MONDAY | May 27
Memorial Day Holiday. Congress in recess.
MONDAY | June 3
9 a.m., Omni Shoreham Hotel. The Nuclear Energy Institute holds the Nuclear Energy Assembly in Washington, June 3-5.
MONDAY | June 10
9 a.m., Philadelphia. The Edison Electric Institute, representing the investor-owned utility industry, holds its 2019 annual convention in Philadelphia, June 10-11.
TUESDAY | June 11
TBD, House Energy and Commerce Committee’s Oversight and Investigations Subcommittee holds a hearing with former EPA Administrators Lee Thomas, William Reilly, Christine Todd Whitman, and Gina McCarthy testifying.
