© Provided by Washington ExaminerDOE Header 2020
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!
THE LATEST: The Biden administration has set out to prove it has control over the fallout of the cyberattack and shutdown of the Colonial Pipeline, after spending its first months pressing a clean energy and climate agenda on its terms.
For the third straight day, the White House is bringing the big guns to its afternoon press briefing, with EPA Administrator Michael Regan and Transportation Secretary Pete Buttigieg slated soon to address concerns about soaring gas prices and fuel shortages.
That comes after the White House released a fact sheet last night outlining its "all-of-government" effort to address the incident. Get all the latest below.
Welcome to Daily on Energy, written by Washington Examiner Energy and Environment Writers Josh Siegel (@SiegelScribe) and Abby Smith (@AbbySmithDC). Email jsiegel@washingtonexaminer.com or asmith@washingtonexaminer.com 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.
OIL AND GAS INDUSTRY RESISTS CYBERSECURITY MANDATES: The American Petroleum Institute is pushing back on the prospect of regulatory action over pipelines in the wake of the ransomware attack on the Colonial Pipeline.
An API official told reporters yesterday that discussing new cybersecurity mandates is premature as investigators learn how the hackers, an organized crime group called DarkSide, breached Colonial's computer networks in the most significant, successful cyberattack ever on energy infrastructure in the U.S.
The official said member companies are aware of cyberthreats facing the oil and gas industry and stressed strong communication that already occurs with intelligence agencies.
The official also suggested new regulations would take time to implement and struggle to keep pace with a changing threat environment.
Biden mum for now: The Biden administration is not endorsing Democratic FERC Chairman Richard Glick's call this week for Congress to establish mandatory pipeline cybersecurity standards similar to those already applied to the electricity sector.
Homeland Security Secretary Alejandro Majorkas was asked about Glick's statement at the White House press briefing Tuesday and avoided directly saying whether the Biden administration plans to work with Congress on forcing cybersecurity requirements on pipelines.
"Our conversations within the administration are ongoing with respect to what measures we need to take, both administratively and the Legislature, to see how we can raise the cyber hygiene across the country," Majorkas said.
RELATED...LAWMAKERS TOUT BIPARTISAN CYBERSECURITY BILLS: Democratic and Republican leaders on the House Energy and Commerce Committee recently reintroduced a series of bipartisan cybersecurity bills they say will help strengthen the energy sector's resilience to attacks like the one the Colonial Pipeline is grappling with this week.
"The Colonial Pipeline cyberattack and the ripple effects being felt now across the country are sharp reminders of just how deeply we all rely upon our energy infrastructure every day, and just how crucial it is that we invest in modernizing and protecting it," said Chairman Frank Pallone and Cathy McMorris Rodgers, the top Republican on the committee.
The lawmakers call for the legislation, much of which strengthens the Energy Department's authority, to be "enacted immediately."
Among the bills they're touting is legislation reintroduced yesterday that would bolster the Energy Department's ability to respond to physical and cybersecurity risks to pipelines and LNG facilities. Other bills would make cybersecurity a "core function" for the Energy Department, as well as improve coordination between the agency and electric utilities, states, and other federal agencies to address risks to electricity infrastructure.
DON'T CALL IT A SUPPLY SHORTAGE: Energy Secretary Jennifer Granholm warned yesterday that drivers "hoarding" gasoline is causing a "supply crunch" but she refused to call the current situation a shortage as she expressed optimism that Colonial Pipeline will return to full service soon.
"Much as there was no cause for, say, hoarding toilet paper at the beginning of the pandemic, there should be no cause for hoarding gasoline, especially in light of the fact that the pipeline should be substantially operational by the end of this week and over the weekend," Granholm said at the White House press briefing.
JONES ACT WAIVER ON THE TABLE (WE'VE HEARD THIS BEFORE): The Department of Homeland Security is prepared to review temporary requests to waive the Jones Act in order to enable foreign-flagged vessels to deliver fuel to needy areas.
Psaki said this morning that the Transportation Department's Maritime Administration finished assessing what vessels are available should the Biden administration act on requests to waive the controversial shopping rule to relieve the fuel crunch.
The century-old Jones Act prohibits tankers from hauling goods and commodities, such as oil or natural gas, between U.S. ports unless the ships are American made, owned, and crewed. The Jones Act was designed to protect American maritime interests and shipbuilders, and the industry and unions have repeatedly fended off attempts in Congress to repeal it.
The Obama and Trump administrations both issued waivers to address fuel shortages in the name of national security, including in 2012 when Hurricane Sandy damaged Mid-Atlantic refineries and after Hurricane Maria wreaked havoc in Puerto Rico in 2017.
GAS PRICES PASS $3 PER GALLON WITH SUMMER DRIVING SEASON IMMINENT: National average gas prices surpassed $3 per gallon for the first time since 2014 this morning as fallout continues from the Colonial Pipeline shutdown.
Market watchers say reopening the pipeline by the weekend is critical to avoid summer driving disruptions, the Washington Examiner's Zachary Halaschak reports in a story this morning.
"About gas prices . they shoot up like a rocket or like fireworks, and they come back down as slowly as a feather," said John Townsend, manager of public and government affairs for AAA Mid-Atlantic.
Townsend's remarks come the same day that AAA released its Memorial Day travel forecast. It predicts a "significant rebound" from last year, with more than 37 million people expected to travel 50 miles or more from home, an increase of 60% from 2020. While robust, the number is still 6 million travelers short of 2019.
AAA's forecast didn't take into account the possibility that the pipeline blockage continues on for longer than expected, and Townsend said that if that happened, it could create major issues for the travel industry as gas prices inch higher.
GAS STATION OUTAGES CONTINUE TO PILE UP: Nearly a quarter of gas stations in North Carolina are without fuel, according to the latest data from GasBuddy this morning, the sixth day of the shutdown.
Outages are ticking up in other southeastern states as well. Both Virginia and Georgia are experiencing fuel shortages at 15% of their gas stations, according to GasBuddy. More than 13% of the stations in South Carolina are coming up empty, the data notes.
The EPA has now issued emergency fuel waivers in 12 states and Washington, D.C., allowing them to bypass fuel requirements until the end of the month as they grapple with the fallout from the pipeline shutdown.
Gov. Ralph Northam of Virginia and Gov. Ron DeSantis both declared states of emergency yesterday, joining North Carolina Gov. Roy Cooper in temporarily waiving fuel requirements to help deal with gasoline shortages.
KERRY SAYS CHINA HAS 'MOVED' ON CLIMATE: Climate envoy John Kerry took heated questions from House Republicans in testimony today about his efforts to work with China, the world's top emitter, to do more to address climate change.
"The more you can hold China to the same standards as the U.S., the more successful you will be, but we are not seeing that right now," said Rep. Michael McCaul of Texas, the top Republican of the Foreign Affairs Committee that hosted a hearing on Kerry's global climate diplomacy.
McCaul and other Republicans called on Kerry to press China on its human rights abuses, including in its production of solar panels and development of critical minerals.
While Kerry said no issue "can be traded" with China in order to cooperate on climate, he said addressing human rights is "not my lane."
"My lane is very specifically to get the Chinese to move where they need to move on climate," Kerry said, adding the world can't meet its emissions targets unless China acts faster.
Kerry said China has "moved somewhat" in a more aggressive direction on reducing emissions since his appointment.
"They have agreed they have to change and do something in the 2020-30 [period]," Kerry said, expressing optimism China can begin reducing emissions by 2025, ahead of its current pledge of doing so before 2030.
LEFT-WING ACTIVISTS STEP UP PRESSURE ON DEMOCRATS: Left-wing climate activists are forcefully rejecting policies from top Democrats that promote nuclear and carbon capture, signaling a tough debate ahead.
More than 600 environmental and grassroots groups, including national groups such as Friends of the Earth, Center for Biological Diversity, and the Indigenous Environmental Network, sent a letter to lawmakers this morning calling on them to pursue a national standard requiring 100% renewable power by 2030.
It's a rebuttal to the clean electricity standard policy favored by the Biden administration, top House Democrats, and centrist environmental groups that calls for carbon-free power by 2035 but allows resources such as nuclear energy, carbon capture and storage, and even natural gas to play a role in meeting the requirements.
The letter is also a sign that the fight over whether to rely solely on renewable energy is breaking out into the open as Biden and lawmakers negotiate a major infrastructure and climate package.
More in Abby's story posted this morning.
AFTER SHORT BLIP, GLOBAL OIL DEMAND TO SOAR IN 2021: The International Energy Agency today revised down its global oil demand forecast for this year by 270,000 barrels per day from last month because of weaker than expected consumption in the U.S. and Europe and a slowdown in India due to a surge of the pandemic.
Nonetheless, IEA still expects global oil consumption to rise by 5.4 million barrels p/d this year on an annual basis, based on expectations vaccinations continue to spread and the pandemic is controlled. It projects demand to soar from 93.1 million barrels p/d in the first quarter of 2021, to 99.6 million barrels p/d by year-end.
Meanwhile, the effort of OPEC and its allies to hold back supply is paying off, with bloated inventories built up during the last year nearly returning to normal levels.
The positive demand outlook follows a similar report released yesterday by OPEC, and helped push the Brent oil price up to $69 per barrel this morning.
BUT US OIL DEMAND FALLS: U.S. oil demand fell last week to its lowest level since September, dropping to 17.5 million barrels per day compared to 19.7 million barrels p/d the week prior, the Energy Information Administration reported this morning. But the main cause of the drop was not gasoline, diesel, or jet fuel demand, but rather a decline in consumption of propane and other oils.
SUMMER OF PAIN FOR NATURAL GAS: The U.S will generate less electricity this summer from natural gas because of higher prices, especially in Texas, where gas production was hit hard from the freezing event in February.
Renewables are poised to generate about 30% more electricity in Texas this summer than last, the EIA said yesterday in its Short-Term Energy Outlook, replacing high-cost natural gas. Coal is also poised to benefit from higher gas prices, with coal's share of electricity generation nationally projected to increase from 22% in 2020 to 26% this summer. Emissions, of course, will bounce back this year, rising 6% after a record drop last year, with economic activity returning, EIA said.
The Rundown
Wall Street Journal Beyond Colonial pipeline, ransomware cyberattacks are a growing threat
New York Times For clean energy, buy American or buy it quick and cheap?
Reuters Tesla seeks entry into U.S. renewable fuel credit market - sources
Calendar
10:30 a.m. The House Energy and Commerce Committee's Environment and Climate Change Subcommittee will hold a remote hearing on Superfund provisions in the "CLEAN Future Act."
THURSDAY | MAY 13
10 a.m. 366 Dirksen. The Senate Energy and Natural Resources Committee will hold a hearing to examine offshore energy development in federal waters. It will also consider the nomination of Tommy Beaudreau to be deputy secretary of the Interior.
Tags: Energy and Environment, Daily on Energy
Original Author: Josh Siegel, Abby Smith
Original Location: Daily on Energy: The latest on the Colonial Pipeline shutdown