Daily on Energy: Colonial Pipeline travel disruptions could last for two weeks

President Joe Biden, in remarks this afternoon, cautioned that things won’t return to normal immediately but said he expected things to improve by the end of the weekend. “I want to be clear you will not feel the effects at the pump immediately,” Biden said. “This is not like flicking on a light switch.”

According to the latest GasBuddy data this morning, 71% of the gas stations in North Carolina, 55% of the gas stations in Virginia, 54% of the gas stations in South Carolina, and 49% of the gas stations in Georgia were without fuel.

That is even after the Colonial Pipeline began to come back online yesterday afternoon. The company said it expects each market it services “will be receiving product from our system” by midday today. Energy Secretary Jennifer Granholm said via Twitter that the restart of the pipeline “went well overnight” and suggested “things will return to normal by the end of the weekend.”

Nonetheless, analysts say part of what has caused the fuel outages is spiking demand from people racing to the pumps to fill up their cars, despite warnings from officials not to hoard gasoline.

GasBuddy says other states where gas stations have come up empty, including Tennessee, Florida, Maryland, and Washington, D.C., could see at least a week of disruptions, though De Haan says the situation will begin to improve by the weekend. States that didn’t see as many outages, such as Alabama, Delaware, West Virginia, and Mississippi, should be seeing immediate improvements, and disruptions should only last between two and five days, De Haan said.

“JUST ahead of Memorial Day weekend or so, finding gasoline shouldn’t require too much,” De Haan added. “You may occasionally find a station without fuel, but outages should be <20% by then in all areas.”

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BIDEN LOOKS TO REQUIRE CYBERSECURITY PROTECTIONS WITH INFRASTRUCTURE PACKAGE: The administration is interested in requiring that grant recipients as part of infrastructure legislation implement cybersecurity protections and in issuing tax credits for such improvements, White House press secretary Jen Psaki said at a briefing yesterday.

Previously, Biden’s $2.3 trillion infrastructure and clean energy plan did not mention cybersecurity as a priority among its provisions for spending on clean energy, power grid improvements, and electric vehicle charging stations.

Transportation Secretary Pete Buttigieg, also speaking at the press briefing, said the American Jobs Plan will be “funding and supporting” measures to ensure U.S. critical infrastructure is “resilient” against cyberthreats.

“Part of the expectation for local authorities, states, or other bodies seeking to get funding is that there be robust cybersecurity, resilience, and planning written into that,” Buttigieg said. “This is not an extra. This is not a luxury. This is not an option. This has to be core to how we secure our critical infrastructure.”

AND SIGNS A NEW CYBER ORDER IN THE MEANTIME: Biden yesterday ordered an overhaul of federal software systems and the contractors that supply them, the Washington Examiner’s Katherine Doyle reports.

The executive order was in the works before the pipeline attack, but it is intended to encourage private companies like Colonial to establish better cybersecurity or risk being blocked from federal contracts.

Biden’s push to modernize national cyberdefenses aims to prevent these breaches, establishing baseline standards that agencies and suppliers must meet within six months, such as encryption or multifactor authentication. Government contractors will also be required to report cybersecurity breaches quickly with officials. The order also establishes a cybersecurity incident review board, led jointly by public- and private-sector experts, to learn lessons from breaches.

Biden so far has resisted a call from some Democrats, such as FERC Chairman Richard Glick, for Congress to impose broader cybersecurity mandates on pipeline operators.

JONES ACT WAIVER GRANTED: The Biden administration’s Department of Homeland Security last night issued a temporary waiver of the Jones Act to one company enabling the transport of fuels between Gulf Coast and East Coast ports using a foreign-flagged vessel.

“When U.S. flagged vessels are not available to meet national defense requirements, the Department of Homeland Security may grant a waiver to the Jones Act only if the proposed shipments are in the interest of national defense and after careful evaluation of the issue,” said DHS Secretary Alejandro Mayorkas, adding that this instance met those requirements.

It might take time for the vessel to deliver fuels, though. The sailing time for a ship to take fuel from Houston to New York would take up to a week, according to Bloomberg. It can take up to four days to ship fuel from the Gulf of Mexico to Savannah, Georgia, or Norfolk, Virginia, the New York Times said.

GOP BLAMES BIDEN CLIMATE AGENDA: Republican politicians are linking this week’s gasoline shortages and price spikes to Biden’s moves to curb fossil fuel use as part of his aggressive climate agenda.

“The Colonial Pipeline crisis shows that we need more American energy to fuel our economy, not less,” said House Republican Leader Kevin McCarthy of California in a tweet Tuesday. “But the Biden Administration has already canceled the Keystone Pipeline and paused oil and gas drilling, leaving our energy supply more vulnerable to attacks.”

The 2,000-mile Keystone XL pipeline, though, would have transported crude oil from Alberta in western Canada to the Gulf Coast of Texas, where it would be refined, not fuel products such as gasoline that the 5,500-mile Colonial Pipeline transports across the East Coast. In total, the Colonial Pipeline is responsible for nearly half of the East Coast’s fuel supply.

“In this case, this was an issue about how a cyberattack impacted a pipeline that’s there. I’m not sure it really speaks to the number or quantity of pipelines or their throughput,” Buttigieg said yesterday, when asked if the fuel shortages signal the United States should be building more pipelines.

MOVEMENT ON INFRASTRUCTURE DEAL? House and Senate leaders in both parties met with Biden for more than an hour yesterday for “productive” talks that have not yet yielded a critical deal on infrastructure, the Washington Examiner’s Susan Ferrechio reports.

Biden told reporters at the start of the meeting he will “try to reach some consensus” on an infrastructure accord, but the two parties remain starkly divided on the size, cost, and offsets.

Senate Minority Leader Mitch McConnell, a Kentucky Republican, described the meeting as productive but said Biden’s plan to pay for the deal with higher taxes remains “our red line.” He later told Fox News there’s a “great chance” for a bipartisan deal, despite disagreements about the substance of a package.

“To the extent that they start getting off in rather exotic definitions of what amounts to infrastructure, we could have a problem,” McConnell said, listing roads, bridges, ports, water lines, and broadband as things they could agree on.

Senate Majority Leader Chuck Schumer, a New York Democrat, said after the meeting that the group decided that “as a first step … we would explore the places we could agree on and come to a bipartisan agreement on that.”

No electric chemistry: One area of disagreement remains subsidies for electric vehicles, a huge part of Biden’s pitch.

“That emerged as something they might not be too fond of,” House Speaker Nancy Pelosi, Democrat of California, told reporters of Republicans.

Yes, but: If a bipartisan deal emerges, Democrats would likely look to push the more climate-related provisions through reconciliation.

BUT BIDEN PRESSURED TO ACT NOW: A coalition of influential environmental and labor groups called on Biden and Democratic leaders this morning to not wait for Republicans on negotiating a bipartisan infrastrastructure deal, but to instead take “immediate” action.

Signatories of the letter to Biden, Schumer, and Pelosi include the BlueGreen Alliance, Center for American Progress, Environmental Defense Fund, Sunrise Movement, United Steelworkers, and more.

INTERIOR DEPUTY NOMINEE GETS COMMITTEE APPROVAL: The Senate Energy and Natural Resource Committee this morning easily approved Biden’s nominee to be No. 2 at the Interior Department, Tommy Beaudreau, by a 18-1 vote. His nomination will move to the Senate floor.

Beaudreau, who would oversee the day-to-day operation of the agency, has committed to the administration’s effort to reform oil and gas leasing on public lands and waters after it finishes reviewing the future of the program.

Sen. John Barrasso of Wyoming, the committee’s top Republican, said he hoped Beadreau could be a “voice of reason in an administration waging an economic war against energy workers in my state and across the country.”

Beaudreau grew up in Alaska, the son of a father who worked in the Prudhoe Bay oil field on the North Slope. Working at high-level Interior roles in the Obama administration, Beaudreau implemented reforms to the offshore and gas drilling program after the Deepwater Horizon spill in the Gulf of Mexico, and later oversaw onshore leasing. He was most recently an attorney who has represented oil and gas and renewable clients.

DEMOCRATIC GOVERNOR PUSHES FOR OFFSHORE LEASING RESUMPTION: The Biden administration should lift its pause on issuing new leases for drilling in the Gulf of Mexico by the third quarter of this year, or else there would be “devastating” damage to Louisiana’s economy, the state’s Democratic Gov. John Bel Edwards told the Energy Committee at a hearing this morning.

Edwards, who has committed Louisiana to reaching net-zero emissions by 2050, said extending the leasing pause any longer would harm his plan to transition the state to producing cleaner energy through offshore wind, hydrogen, and carbon capture.

“If you pull the rug out from traditional oil and gas, the transition is not going to be seamless, it’s going to be haphazard,” Edwards said.

Biden administration mum: Amanda Lefton, director of Bureau of Ocean Energy Management, testified at the hearing that the goal of the leasing pause is to review whether royalty rates and other fees “amount to a fair return to the taxpayer” and consider the effect of offshore drilling on climate change. She said 90% of revenue from offshore development is paid by companies producing oil and gas on existing leases, for which permits to drill continue to be issued. She reiterated Interior plans to release an interim report on the future of the leasing program early this summer.

WHITMER ORDERS SHUTDOWN OF LINE 5 OIL PIPELINE: Michigan Gov. Gretchen Whitmer ordered Canadian energy company Enbridge yesterday to shut down the oil pipeline long targeted by activists, the Washington Examiner’s Michael Lee reports.

Shutting down Line 5 was one of Whitmer’s key campaign promises in her bid to become Michigan’s governor, with the pipeline’s location in the Great Lakes being a source of controversy and scorn from environmentalists.

Enbridge has so far defied Whitmer’s order, continuing to operate the pipeline despite repeated warnings from the governor’s office that doing so “constitutes an intentional trespass” and that the company’s “unlawful” defiance of the governor’s order would be “at its own risk.”

EPA MOVES TO SCRAP TRUMP COST-BENEFIT RULE: The Biden administration is scrapping a Trump rulemaking that would have made it more difficult for the EPA to justify stricter air pollution rules.

The rule at issue made changes to the EPA’s methods for calculating costs and economic benefits in a way that would make more proposals seem like they would do more damage than good. In a rule slated to be published tomorrow, the Biden EPA said the changes were “not needed, useful, or advisable policy changes.”

Removing the Trump EPA’s rule is a critical step for the Biden administration, which has promised to set tougher climate and air pollution mandates. Environmentalists had warned the Trump administration’s rule would make it much harder for the EPA to set tougher air pollution limits because it restricted the agency’s ability to fully assess the benefits of reducing emissions.

The Trump rule narrowed the kinds of costs and benefits the EPA is able to consider, restricting the agency to weighing only the economic benefits resulting directly from reducing emissions of the targeted pollutant.

TRANSMISSION TAX CREDIT CARRIES BIG BENEFITS, RENEWABLE GROUP SAYS: New analysis this morning from the American Council on Renewable Energy and Grid Strategies finds a tax credit supporting large-scale, regional electric transmission projects could create 650,000 jobs and facilitate 30,000 megawatts of additional renewable energy capacity.

The groups assessed the effects of transmission investment tax credit legislation introduced by Democrats in Congress and promoted by Biden in his infrastructure plan. A prior analysis found 22 major transmission projects would be eligible for a targeted tax incentive, totaling $33.3 billion in investment.

In an optimistic scenario where all of those 22 projects are built out, the transmission tax credit would see even bigger benefits, the groups find. That buildout would equate to 8,000 miles of high-capacity transmission lines, facilitating 60,000 MW of additional renewables and creating more than 1.2 million jobs.

The groups acknowledged, however, that permitting and other barriers could hold some projects back. In their core scenario, roughly 20,600 MW of additional transmission capacity would come online supported by the tax credit, which the groups say would require investment of $15.3 billion. The transmission tax credit would offer $2.3 billion in savings to people in the lower 80% of income brackets, compared to if that transmission was built out without support from the incentive.

JPMORGAN SETS CLIMATE TARGETS FOR HIGH-EMITTING CLIENTS: JPMorgan announced carbon intensity targets for the auto manufacturing, oil and gas, and electric power industries this morning as part of the bank’s commitment to align its financing with the Paris climate agreement.

The targets lay out how the bank will hold its clients in those industries accountable for reducing their emissions over time to move toward net-zero emissions by 2050. JPMorgan set 2030 targets for auto manufacturers to reduce their carbon intensity by 41%, for utilities to reduce their carbon intensity by 69%, and for oil and gas producers to reduce their operational carbon intensity by 35% and their end-use carbon intensity by 15%.

In the last several months, all of the major U.S. banks have set goals to align their financing with the Paris Agreement or reach net-zero financed emissions by 2050. Some of those other banks have also said they’ll set interim targets for specific high-emitting sectors.

Ben Ratner, a senior director at Environmental Defense Fund+Business, said JPMorgan’s new targets “begin a critical new chapter focused on turning Wall Street’s net-zero climate pledges into action plans.”

He added that JPMorgan sets a “strong mark” with its oil and gas sector target, which includes expectations that producers will curb their methane emissions by 75% and reduce flaring by 90% by 2030. EDF offered input to the bank to help inform its oil and gas sector target.

BP TO HELP CONCRETE PRODUCER DECARBONIZE: The oil giant’s memorandum of understanding with concrete producer CEMEX follows up on BP’s commitment as part of its net-zero ambition to help other companies and cities curb their emissions.

Under the MOU, the two companies will work on low-carbon power, low-carbon transportation, energy efficiency, natural carbon offsets, and carbon capture and storage, according to a news release.

“We know that 70% of global emissions come from transport, ‎industry and energy and that cement making is energy intensive,” said William Lin, BP’s executive vice president, regions, cities & solutions. “Teaming up with progressive companies like CEMEX, that share a net-zero ambition and have complementary capabilities, will help speed up the decarbonization of the industry and the energy system.

The Rundown

Associated Press Tech audit of Colonial Pipeline found ‘glaring’ problems

Bloomberg ‘Arm waving’ response to hackers makes oil industry easy prey

Washington Post US has entered unprecedented climate territory, EPA warns

E&E News NM Democrat’s bill offers ‘glide path’ for lost fossil fuel revenue

Calendar

TUESDAY | MAY 18

10 a.m. 366 Dirksen. The Senate Energy and Natural Resources Committee will hold a hearing to consider the nominations of Robert Anderson to be solicitor of the Interior Department, Shannon Estenoz to be assistant secretary for fish and wildlife and parks, and Tanya Trujillo to be an assistant secretary of the Interior (Water and Science).

WEDNESDAY | MAY 19

10 a.m. G-50 Dirsken. The Senate Environment and Public Works Committee will hold a hearing titled, “Examining Biodiversity Loss: Drivers, Impacts, and Potential Solutions.”

10:30 a.m. Energy Secretary Jennifer Granholm will testify remotely before the House Energy and Commerce Committee’s Subcommittee on Energy on the agency’s fiscal year 2022 budget request.

2 p.m. Green 2.0 will host a virtual discussion with Asian-American and Pacific Islander leaders on the future of the environmental movement.