As the Trump nominees started facing their Senatorial decision-makers this week, it is interesting to take a look at this confirmation process faced by a President. In addition, to nominating and getting the Senate to confirm a whole new cabinet, the President will be asking the Senate to approve as many as 2,000 other presidential appointments to judgeships, Foreign Service and government agencies and commissions. That is a powerful lot of influence on the federal agenda. And thanks to a change made by the Democrats all it takes is a simple majority, 51 votes to confirm all but Supreme Court justices in the Senate.
Drilling down to the nominees, one of the most interesting features of the Trump selections is their absence of experience in government, with some exceptions in the energy space, and politics but with extraordinary experience in business and in the military. Those different experiences brought to bear are likely to enable them to be problem solvers that think outside the political box. The strategic thinking behind the Trump nominations seems clear and is paying dividends in most of the initial hearings held this last week. These nominees are high profile individuals, and come across as highly intelligent and interesting, capturing both the public’s attention as well as Congress. Regular folks are actually tuning into these hearings to see these nominees, just as they did with President-elect Trump. This interest is likely to help them better achieve their policy objectives with greater public support. Their stature is also likely to at least garner the respect necessary to work with the Congress and of course their new boss, the President. It appears clear that the country is in for an interesting four years.
Turning to the energy space, here are the top two energy and natural resource nominees, both of whom shouldn’t have trouble being nominated:
For the Department of Energy, Trump has nominated Governor Rick Perry who was the longest serving Texas governor in state history. Other offices held include the Texas lieutenant governor, Texas Agriculture Commission and the Texas House of Representatives. Outside of government he was a cotton farmer and an Air Force captain. He graduated from Texas A&M University. While Governor he advocated for an all-of the-above” approach to energy policy and advocated for viewing energy policy as an economic development goal. He also encouraged investment in renewables such as wind and solar. Trump has promised to unleash domestic oil, gas and coal production, largely by rescinding “job-killing” rules and environmental regulations. He made a public commitment last week to step away from a company building the controversial Dakota Access oil project in North Dakota and other energy entities. While Texas is an oil and gas giant, the DOE chief role is managing the nuclear programs including nuclear weapons. Senate Energy Chairman Lisa Murkowski said a hearing may be planned as soon as next week.
For the Department of Interior, the President-Elect has nominated Congressman Ryan Zinke from Montana. He has served one-term only in the House but also served in the Montana legislature. He was CEO of Continental Divide International, a consulting firm promoting technology for the aerospace, oil and natural gas industries and served in the military as a Navy Seal Commander. At present he serves on the Natural Resources and Armed Services committees and isn’t popular with environmental groups. He appears though to align contrary with some in his party, and with the President-elect though on protecting public lands. He also appears knowledgeable about policy impacting Native Americans, which the Department of Interior oversees. He’s also advocated for energy exploration and expressed concerns about climate change strategies. He played football for the Oregon Ducks and also authored an autobiography the “American Commander” co-written with the author of “American Sniper.”
ENERGY TRANSPORTATION NEWS
Business Leaders Unite Against Line Under Lake Michigan
E&E reports “A group of 10 Michigan business leaders are asking Gov. Rick Snyder (R) to support the decommissioning of an oil pipeline under the Great Lakes. State officials have commissioned two studies on the risks posed by Line 5, a pipeline owned by Canadian energy giant Enbridge Inc. that spans the Straits of Mackinac between Lake Michigan and Lake Huron. The studies will also look for alternatives that could replace the line. Formed this week, the Great Lakes Business Network is asking Snyder to support removing the pipeline, which was built in 1953 and carries about 540,000 barrels a day between Sarnia, Ontario, and Superior, Wis. Business leaders said they grew concerned over Line 5 over the past year after Attorney General Bill Schuette (R) penned a letter to pipeline owner Enbridge saying that the underwater section of the pipeline did not have an adequate number of ground supports. The lack of supports violates the 63-year-old easement between the state and the company that allowed the pipeline’s construction. The Bad River Band of the Lake Superior Tribe of Chippewa Indians has also expressed its opposition to the pipeline.” Read more on E&E
Trans-Mountain Pipeline Clears Final Hurdle for Expansion
Wall Street Journal reports, “The Canadian province of British Columbia said Wednesday Kinder Morgan Inc. could proceed with plans to expand its Trans Mountain crude-oil pipeline, representing the final regulatory hurdle for the multibillion-dollar project. Kinder Morgan’s plan, which received federal government approval in late November, would triple capacity to 890,000 barrels of crude oil a day on the existing 714-mile pipeline that carries crude oil from Alberta to British Columbia’s Pacific coast. The total cost of the project is an estimated 5.5 billion Canadian dollars ($4.17 billion). The project would increase Canadian crude exports to Asia and reduce its dependence on the U.S. market, where Canada’s oil sells at a substantial discount to global prices. Kinder Morgan plans to increase ship-loads of crude oil to foreign markets, including China, to 34 ships a month from five now. Canadian Prime Minister Justin Trudeau gave his approval to the project in November as part of a compromise on pipeline development that included blocking the more controversial Northern Gateway pipeline proposed by Enbridge Inc. Kinder Morgan said the British Columbia’s approval means it has met the province’s five pre-existing conditions, which cover matters related to the environment, aboriginal communities and economic benefits. The province had the power to block the project, despite the federal support. Kinder Morgan said the project still requires final approval from Kinder Morgan’s board of directors. Construction could begin in September 2017, with an in-service date for the expanded pipeline system in late 2019, the company added. Kinder Morgan has also agreed to pay up to C$50 million a year to a provincial fund that can be tapped by cities and towns in the process for environmental protection if crude shipments exceed certain volumes. The British Columbia government said its approval comes with an additional 37 conditions, on top of the 157 conditions federal authorities have mandated, ranging from having strategies in place to protect the grizzly bear population to assurances Kinder Morgan will offset carbon emissions the project creates.” Read more on Wall Street Journal
Dakota Access Protest Policing Costs Exceed $22M
Chicago Tribune reports, “The cost of policing the Dakota Access pipeline protests in North Dakota is at least $22 million — more than $5 million more than the state set aside last year. Protest-related funding decisions will be made by state lawmakers during the 2017 session. Leaders of the House and Senate appropriation committees say more funding will be approved, though the amount and method isn’t known. Rep. Jeff Delzer says state officials also still hope the federal government will help with funding. The four-state, $3.8 billion pipeline is to carry North Dakota oil to Illinois. Opponents believe the project threatens drinking water and Native American cultural sites, which Texas-based developer Energy Transfer Partners denies. Opponents built a protest encampment in southern North Dakota. There have been nearly 600 arrests since August.” Read more on Chicago Tribune
Dakota Access: Government, Tribe Slam Company’s ‘Legal Fallacy’
E&E reports, “Dakota Access litigation lit up again last week as the Obama administration and Standing Rock Sioux Tribe tried to block legal maneuvering by the pipeline company. Lawyers for the Army Corps of Engineers on Friday urged a federal court in Washington to reject a request from Dakota Access LLC to resolve the case in its favor. In November, the company asked the U.S. District Court for the District of Columbia to grant “summary judgment” declaring that the easement had already been issued and construction across the river can move forward. A win for the company would be monumental, allowing the pipeline to cross the river right away. But many experts have said it’s a long shot. The company’s request put both the administration and the tribe on defense. In a brief Friday, government lawyers slammed Dakota Access’ theory, arguing that no-impact findings earlier this year dealt only with pipeline approvals under the Clean Water Act and Rivers and Harbors Act. The easement needed to cross Army Corps-managed property is a separate consideration governed by the Mineral Leasing Act. Though the corps coordinated review for the two authorizations, it did not meld them into a “single, unified decision,” the brief said. “To the contrary, the Corps’ granting of a [Rivers and Harbors Act] permission to cross Corps-managed lands at Lake Oahe did not require the Corps to consider all factors necessary to also grant an easement at Lake Oahe, much less grant that easement,” government lawyers wrote, adding later: “Put another way, a final agency action granting [RHA] permission is not the same thing as a final agency action granting a Mineral Leasing Act easement.” Read more on E&E
Enbridge Delays Dakota Access Pipeline Deal After Standing Rock Protests
Toronto Globe and Mall reports, “Facing opposition to its North American pipeline operations, Enbridge Inc. is postponing its proposed $1.5 billion acquisition of a 27 percent stake in the controversial Dakota Access project. The Army Corps of Engineers last month denied an easement to allow the pipeline’s current owner to cross the Missouri River near the Standing Rock Sioux reservation. After the Army Corps’ announcement, Enbridge extended the deadline for its transaction with Energy Transfer Partners LP to March 31, an Enbridge spokeswoman said. The company hasn’t given a reason for the delay, but parties involved in building the 1,170-mile pipeline are waiting to see whether they can finish the project after President-elect Donald Trump’s inauguration. The conduit is about 85 percent complete. “There is a termination option in the agreement if certain conditions aren’t met and this termination option has been extended to March 31, 2017,” Enbridge spokeswoman said. After that date, either party could cancel the deal, she added. Among the conditions of the agreement is receipt of the Missouri River easement. Enbridge is also facing opposition to its own transmission projects. Tribal leaders in Minnesota and Canada have threatened to block work on the company’s Line 3 replacement efforts. In Wisconsin, a Chippewa band resolved to refuse permit renewals for Enbridge’s Line 5 to cross rivers in its territory. “We have been negotiating with the Bad River Band for three and a half years and are surprised to learn of the community’s decision not to renew individual easements,” she said. “At Enbridge, we believe the most productive way to address the energy issues that matter to all of us is through conversation and collaboration. … We will be taking some time to review the Band’s decision in detail to determine our next steps.” Read more on Toronto Globe and Mall
ENERGY TAX POLICY NEWS
Illinois Rep Named New Chairman for House Tax-Policy Subcommittee
The Hill reports, “Rep. Peter Roskam (R-Ill.) will be the new chairman of the House Ways and Means Committee’s tax-policy subcommittee, taking the reins of the subcommittee managing tax reform as congressional Republicans aim to pass tax-reform legislation this year. Roskam will succeed former Rep. Charles Boustany (R-La.), who unsuccessfully ran for a Senate seat. He previously served as chairman of the Ways and Means Committee’s oversight panel. Rep. Vern Buchanan (R-Fla.) will succeed Roskam as chairman of the Ways and Means oversight subcommittee. Buchanan had previously served as chairman of the human resources subcommittee, which will now be led by Rep. Adrian Smith (R-Neb.). Reps. Pat Tiberi (R-Ohio), Sam Johnson (R-Texas) and Dave Reichert (R-Wash.) will remain the chairmen of the Ways and Means Committee’s health, Social Security and trade panels, respectively. Johnson announced Friday that he will retire from Congress at the end of 2018.” Read more on The Hill
Ryan, Trump Advisers Meet on Tax Reform
The Hill reports, “Donald Trump will meet last week to discuss tax reform, a major priority for the new Congress and incoming administration. During the meeting, Ryan and his policy staff will walk through the tax-reform blueprint that House Republicans released in June, according to a senior GOP aide. The Trump aides participating in the meeting will include Reince Priebus, the incoming White House chief of staff, and Stephen Bannon, who has been named Trump’s chief strategist. The House Republican blueprint would lower tax rates for individuals and businesses, eliminate some existing tax preferences and revamp the IRS. It would also move the corporate tax system toward a consumption-based system. The House Ways and Means Committee is taking the lead on drafting tax reform legislation based on the blueprint. The tax plan Trump released in September has some similarities to the House Republicans’ plan, as well as some differences. The two plans have the same tax rates for individuals, but Trump’s would lower the corporate tax rate to 15 percent, while the House GOP plan would lower it to 20 percent.” Read more on The Hill
ENERGY POLICY NEWS
Moniz on Scientific Integrity, Rick Perry, and What’s Next
E&E reports, “Not handing over the names of federal climate scientists to the Trump transition team was “absolutely the right thing to do,” Energy Secretary Ernest Moniz said today. Moniz also said he plans to return to Boston to “chill out” with family after his Washington stint — although he has no job lined up — and that Energy secretary nominee Rick Perry is very committed “to moving the department forward,” based on private discussions. When asked whether he was concerned Perry would undo President Obama’s policies, Moniz predicted Perry would see “value added” once he examines the reach and impact of DOE programs. The comments came during Moniz’s last public speech in Washington as the Department of Energy secretary. Moniz focused on DOE’s 17 national laboratories and science and technology policy, including new protections for scientists to work and speak freely. With many scientists jittery about Trump, Moniz issued a revised “scientific integrity policy” for the department today that prevents scientists from censorship, protects freedom of expression for them, establishes a scientific integrity official and expands whistleblower protections. Previously, DOE had a less-detailed science policy offering protections for workers, but it did not cover many scientists at the national labs, which are under the jurisdiction of contractors. The future of DOE science came under scrutiny after a leaked memo from the Trump transition team requested the names of department officials working on climate policies and asked for the salaries of research and national lab officials. DOE’s refusal to hand over the names of scientists was not only the right thing to do, but would ultimately be a favor to the next secretary, Moniz said. He said he wouldn’t speculate on the motivation behind the memo from the Trump transition team. Several Republican senators who met with Perry this month also said they stressed the importance of the labs with him. Sen. Lamar Alexander (R-Tenn.), among others, released a statement after a meeting saying Perry “knows that the future of clean energy and our brainpower advantage depend to a great extent upon research at our outstanding national laboratories.” Read more on E&E
Bishop, Murkowski Look to Dust Off Energy Bill
E&E reports, “Key House and Senate lawmakers said yesterday they may look to revive components of last year’s unfinished energy bill in the coming months. House Natural Resources Chairman Rob Bishop (R-Utah) told reporters he expects to see the committee “moving slowly out of the gate.” The panel has yet to formally organize. “I don’t expect you to see any subcommittee work from us before late February, early March,” he said. “If we do anything early on, it may be some of the stuff that was passed last year and is left over.” That includes several elements of the energy reform package under his committee’s jurisdiction, including sportsmen’s legislation and provisions to ease the siting of transmission lines on federal lands. The upcoming omnibus appropriations bill, as well as President-elect Donald Trump’s infrastructure package, could be vehicles for some of the leftovers, Bishop said. Murkowski said yesterday that she and Bishop discussed the possibility of reviving parts of the legislation last week during a phone call on other matters. Murkowski said she has also been informally checking with committee members to make sure she’s “still in sync with what they want to do.” Murkowski also listed the sportsmen’s package, along with public lands and nuclear provisions, as items that “can move through.” The Congressional Review Act is probably not “a viable vehicle” for undoing monument designations, but Bishop said Trump could act executively to reverse them and the permanent withdrawal of federal offshore lands from drilling. “Anything that you create by executive fiat can be changed by executive fiat,” he said. Rep. Joe Barton (R-Texas), vice chairman of the House Energy and Commerce Committee, said Chairman Greg Walden (R-Ore.) is meeting with subcommittee leaders and members to develop an agenda to be revealed in the coming weeks and months. Barton cautioned that Walden and House leadership will set the agenda, but that new Energy Subcommittee Chairman Fred Upton (R-Mich.) may be interested in revisiting the unfinished energy bill from last year “and try to move something.” Environment Subcommittee Chairman John Shimkus (R-Ill.), Barton said, “would like to take a look at Yucca Mountain and the Clean Air Act,” which is now under his jurisdiction. Barton, who served as full committee chairman during the George W. Bush administration, said he had recommended that Walden take a broad look at the Clean Air Act. Barton added that he expects Trump to waste no time in using his own authority to reverse Obama’s policies, including U.S. EPA’s Clean Power Plan. “How many executive orders can the president sign in a 24-hour period?” Barton asked, laughing. “He might set a new record.” Read more on E&E
Obama Admin Nixes All Atlantic Oil and Gas Exploration
E&E reports, “The Obama administration has denied all applications to conduct seismic surveys in the Atlantic Ocean, citing a “diminished need” for oil and gas companies to map the seafloor in a search for mineral deposits. The decision comes two weeks after Obama banned drilling in parts of the Atlantic and most of the Arctic. The Interior Department also had previously removed Atlantic waters from its five-year oil and gas drilling plan. “Since federal waters in the Mid and South Atlantic have been removed from leasing consideration for the next five years, there is no immediate need for these surveys,” they said in a statement. Seismic surveys use air guns to create images of the geology beneath the seafloor, enabling oil and gas companies to find untapped mineral deposits. BOEM received six applications for the surveys because of initial plans — later reversed — to open the Atlantic to drilling for the first time in decades. The president of the National Ocean Industries Association, said the decision underscores why the beginning of the Trump administration “cannot come soon enough.” He pointed to BOEM’s previous assertion that there is “no documented scientific evidence” that air guns adversely affect marine animal populations. In a press release, BOEM said it decided to deny the seismic survey permits because the information may not be used at all or may become outdated if the Atlantic isn’t leased soon. It also asserted that “lower impact technology” will probably be developed before such geophysical and geological information is needed.” Read more on E&E
Walden Makes Some Changes in Subcommittee Rosters
E&E reports, “A handful of new members are joining House Energy and Commerce subcommittees with oversight of energy and environmental policy, but the turnover on those panels in the new Congress is largely limited to retiring lawmakers. Energy and Commerce Chairman Greg Walden (R-Ore.) announced the subcommittee rosters for the 115th conference this afternoon. Walden announced last week former Chairman Fred Upton (R-Mich.) would lead the Energy Subcommittee, while senior Rep. John Shimkus (R-Ill.) will get the gavel for the Environment panel. The most significant change in those committees, beyond shortening their names, is that Shimkus’ panel will have oversight of the Clean Air Act. Joining Upton’s Energy Subcommittee are:
- Rep. Tim Murphy (R-Pa.), who has been a booster of hydraulic fracturing.
- Rep. Larry Bucshon (R-Ind.), a frequent critic of Interior Department coal-mining regulations.
- Rep. Kevin Cramer (R-N.D.), an early backer and adviser to President-elect Donald Trump who has suggested combining the Energy Department and U.S. EPA.
- Rep. Tim Walberg (R-Mich.), a sixth-term lawmaker who only joined E&C this Congress.
Joining Shimkus’ Environment panel are:
- Rep. Marsha Blackburn (R-Tenn.), an outspoken conservative who has said she does not believe in global warming.
- Rep. Pete Olson (R-Texas), who also serves as vice chairman of the Energy Subcommittee.
- Rep. Buddy Carter (R-Ga.), a second-term lawmaker who joined the committee this Congress.”
Senate Readies for Blizzard of Confirmation Battles
The Hill reports, “The Senate will began a blizzard of confirmation hearings last week for Donald Trump’s prospective Cabinet, as Republicans race to get members of the president-elect’s team in place on day one of his administration. The fast-tracking of nominees is frustrating Democrats, who want to use the hearings to press Trump’s team on a host of issues. It has also drawn criticism from the federal Government Ethics Office, which in a letter to Democrats on Saturday argued that the confirmation process has become so rushed, it is difficult to do ethics probes. Democrats argue the picks deserve extra scrutiny because of the massive wealth of several nominees. Trump’s cabinet in total is worth more than a third of American households. Sen. Dick Durbin (D-Ill.), the Senate’s No. 2 Democrat, argued Trump is creating a “room full of billionaires” for his Cabinet. Democrats are focusing their attacks on eight nominees, three of which come to Capitol Hill this week: Betsy DeVos, Trump’s nominee for education secretary; Sen. Jeff Sessions, who has been nominated to be attorney general, and Rex Tillerson, Trump’s choice to be secretary of State. James Mattis, Trump’s pick to lead the Pentagon; John Kelly, Trump’s pick lead the Department of Homeland Security; Elaine Chao, his nominee to be Transportation Secretary; Ben Carson, his pick for Housing and Urban Development; Wilbur Ross, his pick to Commerce secretary; and Mike Pompeo, his pick to lead the CIA are also all scheduled to get confirmation hearings this week. Blocking any of these nominees is unlikely since the GOP needs just 50 votes to win a confirmation battle. Democrats changed the filibuster rules for nominations when they controlled the Senate, easing the process. The Foreign Relations Committee conducted Tillerson’s hearing this week as well.” Read more on The Hill
Tillerson calls U.S. intelligence findings on Russian interference in election ‘troubling’
Washington Post reports, “Secretary of state nominee Rex Tillerson called U.S. intelligence findings of Russian interference in the presidential election “troubling” Wednesday but said he has not yet seen classified information about allegations that Russia intended to help President-elect Donald Trump. Tillerson, the former top executive at ExxonMobil, also declined to strongly denounce Russian military actions in Syria that have led to civilian deaths or to broadly condemn alleged human rights abuses in Saudi Arabia and the Philippines. He conceded that climate change is man-made and needs to be addressed by world powers — but also that there’s very little he can do to control the potential global fallout of Trump’s tweeting. Tillerson’s hearing was the marquee event on a busy day amid a consequential week for the incoming Trump administration as the president-elect’s top Cabinet picks begin the confirmation process.” Read more on Washington Post
Five Takeaways From Chao’s Confirmation Hearing
The Hill reports, “ Elaine Chao showcased her personal and political ties to Capitol Hill as she cruised through her Senate confirmation hearing on Wednesday. Chao, whom President-elect Chao’s cozy reception – which was marked by compliments, jokes and a glowing introduction from her husband – came during an otherwise explosive day on Capitol Hill. In a nearby committee room, another Senate panel was grilling Trump’s secretary of State nominee Rex Tillerson. Chao used her three hours before the Commerce, Science and Transportation Committee to outline some of her main transportation priorities, including infrastructure spending, safety regulations and self-driving cars. But she remained light on details about many of her policy ideas, instead pledging to work closely with Congress on transportation issues after she is confirmed. After Wednesday’s hearing, there is little doubt that Chao is once again on the fast track to a breezy confirmation. Sen. Bill Nelson of Florida, the ranking Democrat on the panel, said his wife and Chao are the “dearest of friends.” While Chao is one of Trump’s least controversial Cabinet picks, there were still a few spots on her resume that had the potential to rankle Democrats. She came under scrutiny for cutting coal mine safety inspections when she ran the Labor Department and has also been criticized by organized labor over a labor dispute that closed some West Coast ports in 2002. Trump may be open to federal spending on transportation In one of the more surprising moments of the hearing, Chao signaled that the incoming administration would be supportive of direct federal spending on transportation. “I believe the answer is yes,” Chao said when pressed by Sen. Cory Booker (D-N.J.) on the issue. Trump has long promised to rebuild the nation’s crumbling infrastructure, but so far has only floated a $1 trillion package that relies solely on private companies to back transportation projects. Fiscal conservatives have been reluctant to support massive federal spending on infrastructure. Instead, Republicans prefer to use private-sector dollars to address the country’s transportation needs. Chao punted on air traffic control spin-off. Rep. Bill Shuster (R-Pa.), chairman of the House Transportation and Infrastructure Committee, is once again preparing to introduce a proposal to transfer air traffic control operations from the Federal Aviation Administration (FAA) to a not-for-profit corporation. The plan is largely opposed by Democrats and GOP tax writers and appropriators in the Senate. Chao committed to fulfill Trump’s promise to buy and hire American, even though she has expressed opposition to such polices in the past. But that means the Trump administration and House GOP could be headed for a collision course. “Their position against Buy America is at stark odds with the president elect, who has repeatedly pledged two rules for rebuilding the nation’s infrastructure: Buy American, and hire American,” pointed out Sen. Tammy Baldwin (D-Wis.).” Read more on The Hill
Barrasso Eyes Next Week for Pruitt Hearing
E&E reports, “Senate Environment and Public Works Chairman John Barrasso has scheduled a hearing next week for President-elect Donald Trump’s nominee to head U.S. EPA, Oklahoma Attorney General Scott Pruitt (R). The Wednesday, Jan. 18, date is set, the Wyoming Republican said after consulting with EPW ranking member Tom Carper (D-Del.). meeting with Pruitt, Carper last week said he had “grave concerns” over his nomination but promised a fair confirmation process. However, he said he would oppose a hearing until the nominee had submitted financial disclosure and other ethics filings, as well as the completion of an FBI background check. He also said that committee Democrats want time to review the materials before a hearing is set. Barrasso today said he was unsure if the FBI had finished its review but indicated that Pruitt has complied with other information requests. last week indicated he hoped to at least hold a hearing on Pruitt before the Jan. 20 inauguration, noting that the past three presidents’ EPA chief selections had their nominations reviewed before their bosses were officially sworn in.” Read more on E&E
Trump EPA Pick Leaves Conservative Law Group
The Hill reports, “Donald Trump’s pick to head the Environmental Protection Agency (EPA) says he has left a conservative law group that has worked against Obama administration rules. In a financial disclosure form filed this weekend with the Office of Government Ethics, Scott Pruitt said he left the Rule of Law Defense Fund in December after Trump picked him to lead the EPA. The Defense Fund, which was once affiliated with the Republican Attorneys General Association, has fought against Obama administration rules alongside their GOP counterparts in state attorneys general offices. Pruitt is the current attorney general of Oklahoma and had served as a chairman of the Defense Fund. In December, Democrats sent a letter to Pruitt questioning his involvement in the group. They also asked for information about its donors and his role in fundraising and communications for the group. The Defense Fund received at least $175,000 from billionaire brothers Charles and David Koch, a frequent foe of the Senate Democrats who will consider Pruitt’s nomination later this month. In his financial disclosure, Pruitt also said he would leave the board of two religious organizations, the Southern Baptist Theological Seminary and Windows Ministry Inc., if he is confirmed as EPA administrator. He listed an annual salary of $265,650 from his job as Oklahoma’s attorney general, and between $14,300 and $44,000 in annual investment income.” Read more on The Hill
ExxonMobil and Iran Did Business Under Secretary of State Nominee Tillerson
USA Today reports, “ExxonMobil did business with Iran, Syria and Sudan through a European subsidiary while President-elect Donald Trump’s nominee for secretary of State was a top executive of the oil giant and those countries were under U.S. sanctions as state sponsors of terrorism, Securities and Exchange Commission filings show. That business connection is likely to surface Wednesday at a confirmation hearing for ExxonMobil CEO Rex Tillerson before the Senate Foreign Relations Committee. The sales were conducted in 2003, 2004 and 2005 by Infineum, in which ExxonMobil owned a 50% share, according to SEC documents unearthed by American Bridge, a Democratic research group. ExxonMobil told USA TODAY the transactions were legal because Infineum, a joint venture with Shell Corporation, was based in Europe and the transactions did not involve any U.S. employees. The filings, from 2006, show that the company had $53.2 million in sales to Iran, $600,000 in sales to Sudan and $1.1 million in sales to Syria during those three years. The SEC letter questioned ExxonMobil’s failure to disclose to shareholders that it had transactions with three state sponsors of terrorism. Decisions to make such disclosures should be based on “the potential impact of corporate activities upon a company`s reputation and share value,” and not simply the monetary value of the transactions, the SEC said. At the time of the SEC inquiry, such indirect transactions between Iran and American companies were not unusual, said an expert on Iran sanctions at the Foundation for Defense of Democracies, a Washington think tank. Sen. Bob Menendez of New Jersey, the ranking Democrat on the Foreign Relations panel, said he was “deeply skeptical about Mr. Tillerson’s actions as CEO of Exxon that were in direct contravention to express United States policies put in place to secure Americans and our country. This is one of the many issues I look forward to hearing more about during the upcoming confirmation hearings.” Read more USA Today
RENEWABLE ENERGY NEWS
Will N.Y.’s Cuomo Work with Trump on Energy?
E&E reports, “Last month, Williams Cos. President and CEO Alan Armstrong shared an item from his policy wish list. It had to do with a pipeline that Williams wants to build from Pennsylvania to New York. Last year, New York regulators denied a key water permit, preventing the pipeline from going forward after years of review. Armstrong said the decision was more about politics than water, adding that he hoped the administration of President-elect Donald Trump will make it easier to get projects like this through. It’s one example of the kinds of skirmishes that could be forthcoming between Washington, D.C., and New York — and between two New Yorkers who embody nearly opposite politics, Trump and New York Gov. Andrew Cuomo (D). Both men want to show they can build big things. New York’s energy plan is Cuomo’s effort to prove that, said the CEO of the Oil Heat Institute of Long Island and a longtime energy lobbyist. But Cuomo’s energy plan could also jack up power bills and leave the state falling short of its renewable and climate targets, said an analyst with the Empire Center. “Pushing renewable power for the sake of pushing renewable power is not sound public policy,” he said. “New York’s role to play with regard to energy policy on a federal level is like a shipwreck on a reef, serving as a warning to others on how not to do energy policy.” One potential fault line is in natural gas, where Cuomo has tacked left in recent years. At one point, Cuomo seemed to be considering hydraulic fracturing as an economic lifeline for depressed counties in southern New York. But in 2015, he banned large-scale fracking, citing health and environmental risks. Then, last year, a state agency tied up Williams’ proposed Constitution Pipeline from Pennsylvania on a water permit. Williams sued in federal court, saying it had endured exhaustive review and was actually being held up for political reasons. The case is pending in the 2nd U.S. Circuit Court of Appeals. Meanwhile, Cuomo launched one of the most aggressive clean-energy programs in the country, including smart grid reform and a 50 percent renewable electricity mandate by 2030. Last year, he arranged payments for three old nuclear plants, so natural gas wouldn’t replace them. But natural gas may emerge as a point of tension, not just because Trump has pledged to build more pipelines, but because some in New England want them, too. The region, much of which is powered by natural gas, isn’t likely to get more natural gas by port, ISO-NE said. With coal, oil and nuclear plants retiring soon, it suggested finding new gas supplies. The question is how. Dozens of pipelines are currently in limbo, whether for commercial or regulatory reasons. Even when a pipeline gets its permits, its sponsor has to persuade state regulators that the public should pay an extra charge for it. The Northeast is also home to the most ferocious grass-roots pipeline opposition in the United States.” Read more on E&E
House Republicans Look to Streamline Energy Tax Policy
Bloomberg reports, “House Republicans are looking to streamline “hodgepodge” energy tax policy by consolidating tax credits for renewables and eliminating the deduction for intangible drilling costs for oil and gas well owners, Rep. Tom Reed (R-N.Y.) told reporters today.Intangible drilling costs will be “irrelevant” under the GOP tax plan, which that provides full expensing of capital investments, Reed said. The Ways and Means Committee Republican members who comprise an energy tax working group are looking to create a new system for tax credits for renewable energy that is “blind” to the type of technology used, he said. This effort is part of House Republicans’ plans to overhaul the tax code by lowering tax rates and eliminating special tax preferences. However, the tax code will retain some provisions, including percentage depletion deduction for fossil fuels and the special tax treatment for master limited partnerships, he said.” Read more on Bloomberg
New Congress and Presidency of Donald Trump Open Up Wealth of Positive Change for Oil and Natural Gas
Bloomberg reports, “The new Congress and presidency of Donald Trump have opened up a wealth of possibilities for changes that would benefit the discovery, transportation, processing and profitability of oil and natural gas. Action could be seen soon on legislation and regulatory changes to promote drilling opportunities, pipeline permits, revised air and water regulations, revamped renewable fuel requirements, lower corporate taxes and amended rules on financial hedging. Industry would like to see the Trump administration modify many regulations and wants Congress to go further by repealing or heavily modifying regulations that the administration cannot change on its own. Investments in oil and gas pipelines and other energy infrastructure are high on companies’ priority lists, but the Keystone XL and the Dakota Access crude oil pipelines have generated fierce debates. President Barack Obama halted both after they had run the gauntlet of environmental reviews. Oil pipeline companies typically have no big quarrel with the procedural requirements of the National Environmental Policy Act or the regulations of the Pipeline and Hazardous Materials Safety Administration, said the vice president of government and public relations at the Association of Oil Pipe Lines. “We are actually looking forward to a return to existing laws and processes.’ The Keystone XL pipeline, which would cross the U.S.-Canada border, was required to go through a State Department review to determine whether it was in the national interest, after which a presidential approval was needed. Obama rejected it, primarily on grounds of contributing to climate change. “I think everyone would agree the presidential approval process was broken under Obama and is ripe for reform,” he said.” Read more on Bloomberg
Rep. Shimkus to Take Over Clean Air Act Oversight in Shuffle
E&E reports, “After falling short in his bid to lead the full House Energy and Commerce Committee, Rep. John Shimkus (R-Ill.) will lead a revamped Subcommittee on Environment with an expanded portfolio that includes jurisdiction over the Clean Air Act, staffers and lobbyists said today. Shimkus, who was chairman of the Environment and the Economy Subcommittee throughout the tenure of former full panel Chairman Fred Upton (R-Mich.), will continue in that role, although “the Economy” appears to have been dropped from the body’s name. Rep. David McKinley (R-W.Va.) will serve as vice chairman. That Shimkus’ subcommittee will now oversee the Clean Air Act is a notable shift. The law is expected to continue to be a major focus in the 115th Congress. The Energy and Power Subcommittee used to have jurisdiction over the act. New full committee Chairman Greg Walden (R-Ore.) is shortening the panel’s name to the Subcommittee on Energy. Upton will lead it with Rep. Pete Olson (R-Texas) as vice chairman. The reforms also hand Shimkus oversight of the federal renewable fuel standard, which became a sticking point in his bid to lead the full committee. Some refining interests were wary of Shimkus’ commitment to reforming the RFS, given that his district is also a major corn producer. Shimkus countered that he also represents refiners and was therefore well-suited to broker a deal on the long-simmering issue. With the addition of corn-friendly Republican senators on the Senate Environment and Public Works Committee, one refining industry lobbyist said Shimkus’ expanded role is “another nail in the RFS reform coffin.” In another notable assignment, Walden today announced that Rep. Joe Barton (R-Texas), who has already served as Energy and Commerce chairman but expressed interest in doing so again, will become vice chairman for the full committee.” Read more on E&E
ENERGY PERMITTING NEWS
Army Corps Updates, Expands Nationwide Permitting
E&E reports, “The Army Corps of Engineers announced an expansion and update today of a Clean Water Act permitting program that provides expedited reviews of projects the agency says have minimal environmental impacts. One of the two new nationwide permits provides “an efficient authorization process for the removal of low-head dams to restore streams and enhance public safety,” the corps said. The other covers the construction and maintenance of living shorelines to control coastal erosion. The new permits will take effect March 19 as 50 additional nationwide permits are reissued for projects that include bank stabilization, residential development, commercial and industrial developments, and navigation aids. The new permit for stream restoration would expand on another permit that allows for the removal of small water-control structures like dikes and berms in headwater streams and for the removal of low-head dams as part of aquatic habitat restoration projects. The coastal-restoration permit would allow discharges and dredging or filling of material into waters covered by the Clean Water Act to construct and maintain shorelines in order to avoid erosion. Most of the renewed permits don’t include any major changes from when they were last authorized in 2012. None of the permits refers to U.S. EPA’s Waters of the U.S. regulation, called the Clean Water Rule, issued in 2015, which clarifies which waters are subject to protection under the Clean Water Act. That rule has been stayed by the 6th U.S. Circuit Court of Appeals as legal challenges to the regulation make their way through the courts. Instead, the nationwide permits rely on general terms to describe the government’s jurisdiction over the “ordinary high water mark” and “adjacent,” which the Army Corps has used in its nationwide permits “for many years,” the Army Corps wrote in its notice in the Federal Register. Army Corps district offices will follow a similar procedure when reviewing pre-construction notices and requests for nationwide permit verification. Unless the stay on the Clean Water Rule is lifted, the district offices will rely on EPA standards from 1986 and clarifying guidance from 2008 to decide whether projects can proceed. The corps noted that it had to issue new nationwide permits before the jurisdictional issue could be resolved. The 2012 permits expire March 18, and the Clean Water Act does not allow permits to be extended.” Read more on E&E
NOAA Moves to Protect Waters in Lake Michigan, Potomac River
E&E reports, “The National Oceanic and Atmospheric Administration proposed two new marine sanctuaries today, releasing draft plans to protect waters in Wisconsin and Maryland. President Obama announced his intention to create the sanctuaries in 2015. Today’s plans from NOAA contain the details for a 1,075-square-mile area in Lake Michigan and a 52-square-mile stretch along the Potomac River. Both proposed sanctuaries contain what the agency calls “nationally significant” shipwrecks. They also both enjoy broad local and state support. NOAA will accept public comment on the plans until March 31. If approved, the sanctuaries would be the first created since 2000. The Lake Michigan proposal includes protecting 37 known shipwrecks, plus 80 “potential” ones in the area. The ships were used in commerce and trade in the 19th and early 20th centuries.” Read more on E&E
Exxon Mobil Corp. Lost Bid to Block Subpoena by Mass. Attorney General Maura Healey
Bloomberg reports, “Exxon Mobil Corp. lost a bid to block a subpoena by Massachusetts Attorney General Maura Healey as part of her investigation into whether the company misled consumers and investors about the potential impact of climate change on its finances. Exxon didn’t provide enough evidence backing its claim that the probe was politically motivated, state court Judge Heidi Brieger in Boston said in a ruling Wednesday. She also ruled that Healey has jurisdiction over the company in the state. “Exxon must now end its obstructive tactics and come clean about whether it misled Massachusetts consumers and investors about what it knew about climate change, its causes and effects,” a spokeswoman for Healey, said in an e-mail. Irving, Texas-based Exxon for months has been fighting in state courts in Massachusetts and New York, as well as in federal court in Texas, to block probes by Healey and New York Attorney General Eric Schneiderman. In December, U.S. District Judge Ed Kinkeade in Texas, who repeatedly ruled in favor of Exxon, reversed himself and derailed — for now — the company’s plan to force Healey and Schneiderman to appear in Dallas for questioning by the Exxon’s lawyers. With Washington divided along party lines over the state probes, House Republicans are still seeking to subpoena Healey and Schneiderman — both Democrats — to halt their investigations, claiming the attorneys general are trying to infringe the free speech of scientists who dispute climate change. The fight is coming to a head as former Exxon Chief Executive Officer Rex Tillerson appeared for his confirmation hearing in Washington to be secretary of state under President-elect Donald Trump.” Read more on Bloomberg
EPA to Issue Regional Haze Regs, Likely Sparking Lawsuits
E&E reports, “U.S. EPA is poised to formally issue a package of changes to its regional haze regulations, opening the door for legal challenges. The package, various parts of which have drawn opposition from conservation groups, power producers and a coalition of Republican attorneys general, is set for publication in tomorrow’s Federal Register. Under a standard Clean Air Act timetable, opponents will then have 60 days to file suit with the U.S. Court.
Michael Best Strategies’ Energy Team
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- Chip Englander
- Sarah Helton
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- Thomas Schreibel
- Kevin Swanson
- Jeffrey Sherman (Michael Best)
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