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White House: No Crude Export Policy Change – Energy Edge Brought to You by Fuels America

TOP ENERGY NEWS

By Ben Geman (@ben_geman), Clare Foran (@ckmarie) and Jason Plautz (@jason_plautz)

EPA FACES FLACK OVER MISSING EMAILS. While others in the Cabinet were touting the one-year anniversary of President Obama's climate speech at Georgetown, EPA administrator Gina McCarthy was facing an unfriendly House Oversight Committee. Among the committee's concerns was a set of lost emails from retired employee Phillip North, who was involved in the agency's decision to begin the process of preemptively vetoing the Pebble Mine project (although EPA has said he was not "a decision-maker"). North's hard drive crashed in 2010 and EPA did not back up the files, although McCarthy said the problem affected a small set of emails and staff was working to recover them.

 

Chairman Darrell Issa also threatened McCarthy with contempt over the agency's failure to comply with a subpoena for communications with the Executive Office of the President. Although McCarthy said EPA was working with the committee and had shared with staff an email that should address their concerns, Issa said he'd hold a business meeting regarding the contempt charge after next week's recess if progress was not made. (Jason Plautz, National Journal)

WHITE HOUSE: NO CRUDE OIL EXPORT POLICY CHANGE. White House spokesman Josh Earnest insisted Wednesday that the Obama administration hasn't changed the rules for crude oil exports, despite reports about approval of exports of minimally processed light oil.

"There has been no change to our policy on crude oil exports," Earnest said during the daily White House press briefing. "As the Commerce Department has said, oil that goes through a process to become a petroleum product is no longer considered crude oil."

 

Crude exports have been mostly banned for decades but oil producers are lobbying to relax the restrictions imposed after the oil shocks of the 1970s.

BUT THE TAPS OPENED A LITTLE. Earnest was responding to news, first reported by The Wall Street Journal, about a Commerce Department green-light for shipments of Texas oil.

The Journal reports that the Commerce Department has quietly "cleared the way for the first exports of unrefined American oil in nearly four decades, allowing energy companies to start chipping away at the longtime ban on selling U.S. oil abroad."

The rulings will enable a pair of companies to export a very light oil called condensate produced in the Eagle Ford region of Texas. The approval is "likely to encourage similar requests from other companies," the paper reports. (Christian Berthelsen and Lynn Cook, Wall Street Journal)

 

WAIT, WHAT'S GOING ON? Under current U.S. policy, "petroleum products" made from crude oil can already be exported, and in fact the U.S. already exports lots of refined products like diesel and gasoline.

But applying the "product" tag to very light oil that has been run through something called a distillation tower -- a more minimal process than traditional refining -- means the Commerce Department has "widened its definition of what's traditionally been considered a refined product eligible for shipping to customers abroad," Bloomberg reports.

WHITE HOUSE: THERE MIGHT BE A POLICY CHANGE. Federal officials have said for months that they're weighing whether the decades-old ban on most crude exports should be reexamined amid booming U.S production.

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In particular, the fracking boom has unlocked lots of light oil in the Eagle Ford region of Texas, yet many Gulf Coast refineries are configured to process heavy crudes.

"We are closely studying the economic environmental and security opportunities and challenges posed by that growing production and will evaluate policy options as needed going forward," Earnest said.

IT'S KIND OF A BIG DEAL, PART I. Over at our sister website Quartz, Steve Levine explains why the Commerce Department's oil export decision "seems certain to cause a stir in global oil markets and perhaps send prices lower."

As noted above, once this ultralight oil has undergone some minimal processing, it's no longer covered by the crude oil export ban. The Quartz piece notes that this distinction provides "political cover" for the Obama administration on the hotly contested exports issue. "The Administration would somewhat satisfy a US oil industry clamor for exports while also having plausible deniability that it opened the taps," it states. (Steve LeVine, Quartz)

IT'S KIND OF A BIG DEAL, PART II. The Houston Chronicle reports: "The Commerce Department's decision to allow two Texas companies to export a minimally distilled variety of ultralight oil is a win for Eagle Ford Shale crude producers, at the expense of refiners and companies planning to build processing plants along the Gulf Coast."

But the story also quotes an expert saying markets are misinterpreting the Obama administration action as a move toward broad crude exports. (Jennifer Dlouhy, Houston Chronicle)

SENATE DEMOCRAT: EXPORT APPROVALS STINK. Sen. Ed Markey, who opposes crude oil exports, doesn't think this is the most transparent administration ever when it comes to the topic. "Congress put this oil export ban in place. It should be Congress that decides when and how to change it, not through a private ruling by the Commerce Department without public debate," Markey said in a statement.

SENATE REPUBLICAN: EXPORT APPROVALS DON'T STINK. "While the decision does not end the outdated policy that bans most crude oil exports, it is a step in the right direction," said Robert Dillon, an aide to Alaska Sen. Lisa Murkowski, who is the top Republican on the Senate's energy committee. Murkowski has been pushing the White House to ease export limits.

ON CLIMATE ANNIVERSARY, WHITE HOUSE TEAMS UP WITH DONORS. The League of Conservation Voters, which is working with the NRDC Action Fund to raise $5 million for pro-environment candidates in the 2014 elections, is playing host to a powerful lineup today, highlighted by President Obama's appearance at the group's Capital Dinner. The dinner -- which will also feature House minority leader Nancy Pelosi, outgoing Rep. Henry Waxman and Virginia Democrat Tim Kaine -- offers a hefty fundraising opportunity for the group. Plates cost anywhere from $250 for government and nonprofit employees to $25,000 for a "Green Sponsor." And LCV also netted appearances from Energy Secretary Ernest Moniz and Interior Secretary Sally Jewell (see more below).

WHITE HOUSE AIDES, STEYER TALK 'RISKY BUSINESS'. A who's who of top Obama administration officials met Wednesday with billionaire climate activist and Democratic donor Tom Steyer and several others about the economic risks of climate change.

The meeting comes a day after Steyer – along with former Treasury Secretary Henry Paulson and former New York Mayor Mike Bloomberg – released a report that seeks to quantify the toll climate change could take in different U.S. regions. We have more on that study here.

Top White House aides John Podesta and Valerie Jarrett, White House science chief John Holdren, Treasury Secretary Jack Lew and others met with members of the "Risky Business Project" behind the report, including former HUD chief Henry Cisneros and Cargill CEO Greg Page.

"There was agreement that the government and industry alike must take additional steps to quantify and publicize the economic risks associated with a changing climate, including continued commitment to making the best scientific data available to help government officials, communities, and business leaders assess and plan for those risks," according to a White House summary of the meeting.

WHITE HOUSE, INSURANCE INDUSTRY EYE DATA SHARING ON CLIMATE. On Tuesday, White House climate advisor John Podesta, Treasury Secretary Jack Lew, high-ranking officials from the FEMA and NOAA met with a group of insurance industry stakeholders. The officials discussed what they can do to share information with the insurance industry, and vice versa, so that financial losses that could result from damages due to extreme weather could be more easily identified and mitigated.

ENERGY SECRETARY: METHANE STRATEGY DECISIONS LOOMING. Moniz said Wednesday that there will be a "capstone" meeting in July on his agency's efforts to help curb methane emissions from the natural gas sector that contribute to global warming.

He spoke at a breakfast hosted by the League of Conservation Voters. The Energy Department has held several meetings with outside parties in recent months. And click here for more on why methane leaks matter a lot in the battle against climate change.

YUCK. Our sister website Government Executive relays the strange tale of EPA's Region 8 office in Denver, where employees were instructed to stop "inappropriate bathroom behavior," including defecating in hallways. (Eric Katz, Government Executive)

GIVING 'ALL OF THE ABOVE' A GREEN HUE. Moniz is seeking to reassure environmentalists over "all of the above," which is White House shorthand for supporting both green energy and U.S. fossil fuel development. Environmentalists don't like the latter part. But Moniz told the League of Conservation Voters breakfast that the policy is aimed at making all energy sources climate-friendly.

"It all starts with low-carbon. That's a condition," Moniz said. "Then we make the investments across the board . . . to have any of the fuels, any of the technologies competitive in a low-carbon marketplace, because we need the flexibility for different regions of our country and for different countries in the world to choose the low-carbon solution most appropriate to that area," he said.

MCCARTHY: BIOFUELS DECISION 'SOON.' McCarthy did not give reporters a timeline for its announcement on how much ethanol and renewable fuels must be blended into gasoline because work is still ongoing. McCarthy acknowledged that the agency had hoped to get the decision out earlier, but had to contend with a lot of comments and review.

FANS OF ENERGY EFFICIENCY. The Energy Department on Wednesday finalized energy efficiency standards for furnace fans, which are used to move air through residential heating and cooling systems. "The new standard for furnace fans will help reduce harmful carbon pollution by up to 34 million metric tons – equivalent to the annual electricity use of 4.7 million homes – and save Americans over $9 billion in home electricity bills through 2030," the department said.

AIR REGS IN GOP'S SIGHTS. Sen. Jeff Flake of Arizona, along with 12 cosponsors, has introduced a bill that would bar EPA from revising its air quality standards for ground-level ozone, or smog, until 2018 (there's a companion bill in the House from Arizona Republican Matt Salmon). The bill, which would also extend EPA's timeline for reviewing the air quality rules from every five years to ten, is the first of several Flake is planning on air regulations this week. Today, Flake will introduce a bill that would overhaul the way EPA handles requests for "exceptional events" when states ask for flexibility from rules during extreme weather and tomorrow will drop a bill requiring EPA to offset the federal cost of a greenhouse gas rule by cutting spending at the agency.

WHITE HOUSE TAKES AIM AT RUSSIAN ENERGY SECTOR. The Obama administration is gearing up to make a new round of announcements rolling out fresh sanctions against Russia in a bid to de-escalate the conflict in Ukraine. In March, White House sanctions targeted a slate of high-ranking Russian government officials. This time around the administration appears poised to take aim at specific energy infrastructure used to ship natural gas and crude oil. (David Wethe and Mike Dorning, Bloomberg)

UNLIKELY PAIR WEIGHS CLIMATE BILL. Moderate Democratic Senator Joe Manchin of West Virginia and Climate Hawk Senator Sheldon Whitehouse of Rhode Island are trying to find common ground on climate change. (Andrew Restuccia, Politico)

WHAT INSIDERS ARE SAYING

COULD THE CLIMATE RULE COME UNDONE? What are the immediate and long-term threats to the climate rule?

"There is a significant likelihood that the rule cannot be finalized by the time President Obama leaves office. If that is the case, and Republicans capture the Senate in the fall and the White House in 2016, this regulation will never see the light of day." —William O'Keefe, president and CEO, George C. Marshall Institute

HAPPENING TOMORROW

ENERGY BUSINESS HEARING. The House Small Business subcommittee on Agriculture, Energy and Trade holds a hearing on domestic challenges for small energy businesses.

WATERS OF THE U.S. DISCUSSION. The Heritage Foundation hosts a panel on the EPA's proposed expansion of the waters that can be regulated under the Clean Water Act.

CO2 DISCUSSION. The Center for Climate and Energy Solutions hosts a discussion on the use of capture carbon dioxide.

RUSSIAN GAS DISCUSSION. American Enterprise Institute for Public Policy Research and the Peterson Institute for International Economics host a discussion on Russian gas and U.S. energy security.

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