Daily on Energy: Controversial energy regulator says he’s no rubber stamp for Trump
- Mar 25, 2020
- Washington Examiner
Subscribe today to the Washington Examiner magazine and get Washington Briefing: politics and policy stories that will keep you up to date with what's going on in Washington. SUBSCRIBE NOW: Just $1.00 an issue!
OUTGOING FERC COMMISSIONER DEFENDS RECORD: Outgoing Republican FERC Commissioner Bernard McNamee says he’s proved he’s no rubber stamp for President Trump’s pro-fossil fuel agenda, and instead followed an “all of the above'' approach that has also benefited renewables.
“My background has been working for all of the above,” McNamee told Josh in an interview this week. “I don’t worry about how Washington tries to frame people or identify people. I focus on cases in front of me and make decisions based on facts and the law.”
Tired of commuting away from his family in Richmond, McNamee is not seeking another term after being confirmed by the Senate in December 2018 in a 50-49 party-line vote. His term expires at the end of June, but McNamee has not ruled out staying through the end of the year if Trump does not name a replacement for him before then.
Learn to love to regulate: McNamee, 52, says he grew to “love the job” after adjusting to his new role of being an independent regulator at FERC after previously working as a policy advocate, leading the Energy Department’s Office of Policy in the Trump administration. He’s also worked at the Texas Public Policy Foundation, a conservative think tank, a stint that drew attention during his confirmation hearing when a leaked video showed him criticizing renewable energy and favoring fossil fuels as “key to our prosperity.”
McNamee was always defensive regarding people judging his past, noting that before joining the Energy Department he was a lawyer, representing electric and gas utilities before state utility commissions in which he had to argue for particular energy projects seeking approval. He says he successfully got three utility-scale solar facilities approved during his time in that role.
McNamee says the market should drive investments on technologies, not FERC.
“I see great value in renewables and support getting renewables approved as a commissioner,” McNamee said. “I have strong confidence in renewables and as technology develops and investments continue, they will continue to provide resources to the grid. l also understand the benefits of other resources. The great thing about markets is that it places decisions on what is best in the market and individual decision makers, and out of the hands of government and bureaucracy.”
His biggest moment: McNamee’s colleagues credited him with brokering a compromise that has enabled FERC to approve 12 LNG export facilities after there was a backlog of applications.
The breakthrough came because McNamee and former Democratic Commissioner Cheryl LaFleur negotiated a process to measure the direct greenhouse gas emissions from operating and constructing the facilities, while ignoring their overall contributions to climate change.
“That just goes to my view that if we focus on the law and facts we can find common ground and cut through some of the issues that divide Washington,” McNamee said.
The agreement was not accepted by the FERC’s lone remaining Democrat, Richard Glick, who disagrees with McNamee and GOP Chairman Neil Chatterjee’s view that federal laws do not give FERC the authority to regulate the upstream production and downstream use of gas exported at facilities it reviews.
But McNamee said the agreement with LaFleur proves wrong critics who say FERC has become politicized in the Trump era.
“We can disagree on different interpretations of the law or facts,” McNamee said. “What's important is the tone we use with each other, how do we interact with each other, do we try to change the meaning of certain orders to score political points? Each of us have an obligation to deal with law and facts before us and let orders speak for themselves.”
Welcome to Daily on Energy, written by Washington Examiner Energy and Environment Writers Josh Siegel (@SiegelScribe) and Abby Smith (@AbbySmithDC). Email [email protected] or [email protected] for tips, suggestions, calendar items, and anything else. If a friend sent this to you and you’d like to sign up, click here. If signing up doesn’t work, shoot us an email, and we’ll add you to our list.
DEMOCRATS NIX SPR FUNDING IN PANDEMIC RELIEF PACKAGE: Senate Democrats say they were able to eliminate the $3 billion for restocking the nation’s emergency Strategic Petroleum Reserve from the pandemic relief package.
Earlier versions of the relief bill proposed by Republicans contained the funding, an amount requested by the Energy Department, which was intended to help the oil industry reeling from low prices.
But Democrats and Republicans haggled over energy and climate-related provisions, with Democrats asking for carbon emissions restrictions on airlines and tax subsidies for renewables as part of the relief package.
However, both sides appeared to not get what they wanted.
The Trump administration and Republicans are likely to push for the $3 billion in Strategic Petroleum Reserve funding in future rounds of legislation.
Administration officials say restocking the SPR won’t halt the price crash rocking the shale industry, but they say it makes sense on energy security grounds and would benefit taxpayers.
RENEWABLES LOOK TO NEXT ROUND OF PANDEMIC RELIEF: The clean energy sector is supporting the Senate’s bipartisan deal on coronavirus relief, even though it doesn’t include their requests to help with tax credit uncertainty.
But they also want to be clear: The pandemic is putting billions in renewable energy investments at risk, and they’re urging lawmakers to include assistance to the clean energy sector in a future coronavirus relief package, a phase four that’s expected to take the shape of a longer-term stimulus as opposed to emergency relief to struggling families and hard-hit businesses.
“When lawmakers turn their attention to measures aimed at bolstering specific sectors of the economy adversely impacted by coronavirus, we want to make sure they understand how supply chain disruptions and other pandemic-related delays are threatening the jobs of hundreds of thousands of workers in the renewable sector and the time-sensitive tax incentives on which renewable project financing depends,” said Greg Wetstone, CEO of the American Council on Renewable Energy, in a statement.
The group released a survey Wednesday estimating as much as $5 billion of renewable energy business is at risk from the pandemic. More than half of those surveyed cited uncertainty about qualifying for tax credits as a potential “significant impact.”
The clean energy sector has asked for a “direct pay” option for their tax credits, as well as an extension of safe harbor deadlines for the incentives, which begin to sunset or expire this year.
POMPEO TALKS ENERGY MARKETS WITH MBS: Secretary of State Mike Pompeo said Wednesday that he spoke with Saudi Arabia Crown Prince Mohammed bin Salman, and the two discussed efforts to “stabilize energy markets,” among other topics.
Pompeo stressed that Saudi Arabia has a “real opportunity to rise to the occasion and assure global energy and financial markets when the world faces serious economic uncertainty,” according to a State Department readout of the call.
Saudi Arabia has helped worsen an oil price crash by flooding the market with low-priced oil after Russia broke a multi-year pact to cut production to raise prices.
Saudi Arabia and Russia have shown few signs of returning to the negotiating table, but Pompeo’s outreach to MBS, the de facto leader of Saudi Arabia, could be a signal that the Trump administration is making moves to facilitate a diplomatic resolution.
Some Republicans in Congress have favored a more aggressive approach of punishing Saudi Arabia and Russia by imposing oil import limits or anti-dumping duties.
FIRST SIGNS OF OIL EXECUTIVE PAIN FROM PRICE WAR: Yesterday we noted that none of the big oil companies announcing spending cuts have commited to reductions in pay for staff or executives in managing the price crash.
That appears to be changing, with Occidental Petroleum, a Houston-based company, planning to cut salaries for its U.S. employees by up to 30%, according to the Wall Street Journal.
An internal email shows the company plans to cut CEO Vicki Hollub’s salary by 81% and top executives’ pay by an average of 68%.
Occidental has been hit hard by the price crash after purchasing rival and major shale player Anadarko Petroleum last year, leaving it heavily indebted.
More spending cuts: Norweigan oil and gas giant Equinor, meanwhile, joined European and American counterparts in announcing capital spending cuts on Wednesday.
Equinor will reduce its capex by 20%, from $10-11 billion to $8.5 billion. It plans to also cut back on exploration activity and operating costs, along with suspending its stock buyback program.
EPA COULD EASE UP SOME DEADLINES AMID PANDEMIC: The agency could reportedly push back or adjust several deadlines, including requirements for oil refiners to switch to summer-grade gasoline.
The EPA said Tuesday it was developing enforcement guidance to address the coronavirus outbreak. It comes after the agency received a number of requests, from the oil industry and others, to delay compliance obligations, given constraints and economic hardship companies are facing from the pandemic.
TRUMP WILL LET RULING ON SMALL REFINERY EXEMPTIONS STAND: The decision is a blow to oil refiners and oil-state lawmakers, who’d lobbied hard for — and reportedly almost convinced — the White House to fight the court’s decision.
Two small refiners, HollyFrontier and Wynnewood Refining, will fight the 10th Circuit’s ruling, asking the full federal appeals court to hear the case. In January, a three-judge panel rejected waivers for three refineries exempting them from requirements of the EPA’s Renewable Fuel Standard, which mandates a certain amount of biofuels to be blended into the fuel supply.
The ruling restricts the EPA’s ability to grant new small refinery waiver requests: The agency hasn’t said what it will do next, but has reportedly considered applying the ruling nationally.
Oil state senators say the decision threatens tens of thousands of jobs. Senator John Barrasso called the EPA’s decision not to appeal “inexcusable,” saying the court “effectively ended hardship relief” for small refiners under the RFS.
Big oil vs. big corn fight intensifies: The small refinery program has long been a sticking point between the two industries. Ethanol producers, who say the exemption waivers undercut the RFS program more broadly, praised Trump’s decision, saying requesting a re-hearing “would have only prolonged uncertainty in the marketplace” at a time when rural America is suffering from the coronavirus pandemic.
Oil refiners, though, argued Trump is endangering small refineries and undermining his own “energy dominance” agenda. “It’s beyond us why the President is once again trying to appease a biofuel industry that time and again has demonstrated it cannot be satisfied and always believes it is entitled to more,” American Fuel and Petrochemical Manufacturers head Chet Thompson said in a statement.
CORN REFINERS’ NEW CLIMATE PRINCIPLES: As part of the five principles, the Corn Refiners Association says they will undertake actions to cut the carbon footprint of their industry.
The group is also advocating for greenhouse gas targets “grounded in science,” research and incentives for agricultural practices that store carbon in soils, policies to help “energy-intensive industries adapt” to carbon requirements, and a recognition that using agricultural feedstocks in industrial processes reduces emissions.
The Corn Refiners’ announcement last week didn’t make headlines, but it comes as the farming industry writ large is starting to engage, albeit gingerly, in climate policy conversations.
Wall Street Journal Coronavirus complicates Kremlin plan to boost oil output
Los Angeles Times Here’s what a coronavirus-like response to the climate crisis would look like
Reuters Big Oil may have to break dividend taboo as debt spirals: investors
House is out. Senate is considering coronavirus legislation.
Online via Zoom. The Atlantic Council hosts a fireside chat on COVID-19 and the future of the energy system with International Energy Agency executive director Fatih Birol.