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— The Trump administration is preparing to try to open the door once again to oil and gas drilling off Florida's coast, but will wait until after the November election to avoid blowback in the swing state.
— Global natural gas demand is expected to decrease by levels twice the size of the drop that followed the 2008 financial crisis, according to a new report this morning.
— The Trump administration is proposing changes to an Obama-era policy preventing the funding of nuclear power projects overseas.
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Driving the Day
NO-DRILL NOVEMBER? The Trump administration is again considering a proposal — sought since the early days of the Trump era — to open up oil and gas drilling off Florida's coast, four people familiar with the plan tell Pro's Ben Lefebvre. But it won't be revealed until after the election in order to avoid causing controversy in the state, where opposition to opening up the coastal waters is strong.
See you in the fall: "Whatever is decided is expected to come out within two to three weeks of the election," said one person who has had recent discussions with Interior officials about the issue.
Florida lawmakers in recent weeks have taken their concerns directly to President Donald Trump, Ben reports. They have also spoken to Senate leadership on possibly including a bill, S. 13 (116), from Republican Sens. Scott and Marco Rubio to extend the eastern Gulf's existing drilling moratorium, in upcoming legislation, according to one Senate aide.
Working on it: The details of the offshore drilling plan remain closely guarded and could still change. But it has been developed by Interior Secretary David Bernhardt, Deputy Secretary Kate MacGregor and acting Assistant Secretary for Land and Minerals Management Casey Hammond, the people familiar with the proposal said. It's not clear whether California's coast would be included, for example, as it was in a previous version.
Why now? Drilling in the eastern Gulf of Mexico would fulfill a long-sought goal of energy companies. There's 3.6 billion technically recoverable barrels of oil and 11.5 trillion cubic feet of gas estimated to sit beneath the sea floor off Florida's west coast. The waters off California's southern coast contain 5.3 billion barrels of recoverable oil, according to a BOEM estimate.
"It's a given that new acreage will become available when the politics of reelection are behind [Trump]," said one industry person, who described the eastern Gulf of Mexico as "the prize acreage."
Oil and Gas
NATURAL GAS DEMAND TO DROP 2X LOWER THAN AFTER 2008 CRASH: Global demand for natural gas is on track to hit its largest yearly decline ever, according to a new report this morning from the International Energy Agency. Driven by the coronavirus pandemic and a mild winter in the northern hemisphere, gas demand is expected to fall by 4 percent globally — marking a drop twice the size of the one that followed the 2008 global financial crisis when natural gas demand fell by 2 percent.
All major gas markets across the globe were experiencing falls in demand or slumps in growth as of early this month, according to the Gas 2020 report. IEA expects mature markets across Europe, North America and Asia to see the biggest drops this year, accounting for 75 percent of lost gas consumption in 2020. Although a rebound is expected in 2021, IEA said it is not assuming a rapid return to the pre-crisis trajectory of the sector.
Fatih Birol, IEA executive director, said in a statement natural gas "is far from immune from the current crisis." He added: "The record decline this year represents a dramatic change of circumstances for an industry that had become used to strong increases in demand."
EXXON DENIES INVOLVEMENT IN 'HACK-FOR-HIRE' SCHEME: ExxonMobil denied involvement in a hacking operation that targeted environmental activists, journalists, and government and elected officials across six continents. The activity, brought to light by cybersecurity watchdog group Citizen Lab at the University of Toronto, has reportedly drawn a Justice Department probe. "We have not been accused of any wrongdoing. ExxonMobil has no knowledge of, or involvement in, the hacking activities outlined in Citizen Lab's report," Exxon spokesman Casey Norton said in an email, adding the report contained "inferences and suggestions … unsupported by any evidence." The Justice Department declined to comment.
The hacking involved people linked to the #ExxonKnew campaign, which has seeded lawsuits over Exxon's knowledge and distortion of fossil fuels' role in driving climate change in previous decades. Some activists were aware of the attempted hacking activity as early as 2017, Climate Investigations Center Director Kert Davies told ME. "They wanted to get intelligence on what we were doing or planning or talking to to try to undermine the legal process. And we don't know if they got through," he said. Davies said he could not comment on any ongoing DOJ investigation.
But Norton noted the report demonstrated the hacking operation was sprawling, hitting numerous industries and thousands of people. Citizen Lab said the attacks, largely phishing emails, originated in India and currently have no known, explicit connection to Exxon. Groups like Union of Concerned Scientists and Greenpeace, which were hit by hackers, said information wasn't compromised.
Around the Agencies
TRUMP TO LIFT BAN ON FOREIGN NUCLEAR FINANCING: The Trump administration is planning to lift the Obama-era ban that prevents the federal government from funding civilian nuclear projects in developing countries, your ME host reports. The U.S. International Development Finance Corporation said in a Tuesday email obtained by POLITICO that it will open a 30-day comment period to change the policy.
The proposed change "would bring advances in technology and offer a zero-emission power source to the developing world while serving as an alternative to the predatory financing of authoritarian regimes," said DFC spokesperson Laura Allen in a statement.
The comment period follows calls from lawmakers, including Senate Energy Chair Lisa Murkowski, who argue the policy is "ceding the field to our rivals." In its recent report, the U.S. Nuclear Fuel Working Group recommended DFC "fix legacy policies that disallow support for nuclear projects."
What to watch: Conor Savoy, the executive director of Modernizing Foreign Assistance Network, told ME questions loom over how DFC will ultimately implement the change. He cautioned against conflating the role of DFC, which "is very clearly not an export credit agency," and the Export–Import Bank.
"I have some clear concerns about what it means for the agency and whether we are using the DFC in the way it was intended," he said, urging against a "tendency to see the DFC as a shiny new toy." (The DFC replaced the Overseas Private Investment Corporation under a 2018 law.) Savoy said the DFC alone would not be able to counter Russia or China from a nuclear energy perspective, and it would likely require coordination with departments like Energy, State and Commerce.
WHAT'S THE APPEAL? FERC issued a new rule for natural gas pipelines on Tuesday to prevent projects from starting construction until the commission has rejected all appeals to its approval, Pro's Gavin Bade reports. FERC said in a statement that the "instant final rule," approved in a 3-1 party-line vote, will ensure more landowner protections in pipeline cases.
"With today's action, no construction of approved projects can move forward until FERC acts on [requests for] rehearing," Chairman Neil Chatterjee tweeted. Democrat Commissioner Rich Glick dissented in part, saying it would not prevent pipeline developers from using eminent domain powers to seize land, even if construction does not begin.
On the Hill
ANOTHER PUSH ON COASTAL RESILIENCY: Both Murkowski and Sen. Bill Cassidy took to the Senate floor to urge the chamber to consider Cassidy's amendment to the public lands package, H.R. 1957 (116), that would see coastal states receive more funding from offshore oil and gas production to address resiliency and restoration efforts. "This bill only benefits certain states at the expense of others," he said on the floor. "The Gulf Coast just wants equity."
Murkowski urged Majority Leader Mitch McConnell to allow an amendment process. "I do think that these discussions are not only timely but smart policy," she said. "This bill is the right place to address offshore revenue sharing." Sen. Sheldon Whitehouse is also supporting the push, according to his office.
But several Hill aides tell ME McConnell is likely to prevent further amendments. He was quiet on that process Tuesday, but did deny the chamber's consideration of the package is intended to be an election-year gift to Republican Sens. Cory Gardner and Steve Daines, who face competitive reelection bids. "It's in proximity to the election, but nobody said you ought to quit doing things just because there's an election," McConnell said. "We've been able to find our way through all this partisanship and do something important for the country." McConnell predicted the legislation would ultimately clear the chamber "with a very large majority" and swiftly clear the House on its way to President Donald Trump's desk.
Note: The chamber takes another procedural vote on the package today at 12:15 p.m.
FOCUS ON ENVIRONMENTAL JUSTICE: Witnesses encouraged members of the House Energy and Commerce Committee to think holistically and consider environmental justice issues into their responses to the Covid-19 crisis during a Tuesday hearing. "Environmental justice is an environmental issue. But it is also a transportation issue. It is a housing justice issue. It is a public health issue. And it is an economic justice issue, and a few other elements," said Mustafa Santiago Ali with the National Wildlife Federation. "Lots of times we will silo these issues."
— Rep. David McKinley accused Democrats of taking advantage of the pandemic to advance their agenda of phasing out fossil fuels. "Tying air pollution to Covid-19? Really? Seriously?" McKinley said. "You are taking advantage of a public health crisis to justify your party's agenda against fossil fuels. We shouldn't jump to conclusions." Preliminary research in several countries has suggested areas with higher air pollution have seen higher rates of Covid-19 fatalities.
DEM PUSHES DOJ ON CALIFORNIA INVESTIGATION: Whitehouse (D-R.I.) is pressing DOJ antitrust chief Makan Delrahim to answer questions about the origin of his now-closed investigation of the voluntary emissions deal struck last year between California and four automakers. After lots of buzz, DOJ's antitrust investigation was dropped a few months ago. Delrahim has long rejected complaints that his probe was politically motivated.
In a Tuesday letter, Whitehouse asked Delrahim to fully answer questions about who at DOJ first proposed the investigation and whether any steps had been taken prior to August 2019 tweets from Trump attacking the automakers. Delrahim has previously sidestepped sharing any real information about the investigation with lawmakers, Whitehouse complained.
DEMS CALL FOR PROBE INTO PARK POLICE USE OF FORCE: Sen. Ron Wyden (D-Ore.), Natural Resources Chair Raúl Grijalva (D-Ariz.) and Subcommittee Chair Deb Haaland (D-N.M.) called on the Interior Department's internal watchdog to investigate the use of force by the U.S. Park Police in last week's clash with protesters gathered around Lafayette Square. The lawmakers asked the Office of Inspector General to investigate whether the Park Police "complied with applicable law, regulations and agency guidance, including standards set by the Federal Law Enforcement Training Center."
They also asked for the probe to "extend to actions" taken by the Park Police and any other Interior law enforcement agencies involved in responding to recent protests, including where the agency received its directives. Spokesperson Nancy DiPaolo said the OIG is "in the early stages" of reviewing the request.
Movers and Shakers
— Jolene Thompson and Colin Hansen joined the American Public Power Association as chair and chair-elect, respectively. Thompson is president and CEO of American Municipal Power and Hansen is executive director of Kansas Municipal Utilities. Anthony Cannon, general manager and CEO of Greenville Utilities Commission, was also added as vice chair.
— Barry Bushue will join the Bureau of Land Management in the coming weeks as its state director for Oregon and Washington. He currently is state executive director of the Oregon Farm Service Agency at the Agriculture Department.
— Virginia Gov. Ralph Northam appointed Jehmal Hudson to the Virginia State Corporation Commission. Hudson has served as vice president of government affairs for the National Hydropower Association and director of government affairs at FERC.
— Ben Fowke was elected chairman of the board of the Edison Electric Institute. Fowke is currently chairman and CEO of Minneapolis-based Xcel Energy.
The Grid
— "Chesapeake Energy, a fracking pioneer, is reeling," via The New York Times.
— "Resignation cites science group's 'traumatic' culture on race," via E&E News.
— "Trump's scorn for climate change meets courts saying it matters," via Bloomberg.
— "Trump's new Clean Water Act rules could affect embattled natural gas projects on both coasts," via InsideClimate News.
THAT'S ALL FOR ME!
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