Daily on Energy: Supreme Court punts on major natural gas pipeline

Instead, the Supreme Court issued an order asking the Justice Department’s solicitor general to file briefs in the case. The punt by the Supreme Court means its decision on whether to take up the PennEast case will likely be delayed for months, according to research firm ClearView Energy, LLC.

“The Supreme Court now looks very unlikely to decide whether to take this case before it reconvenes for its October 2020 sitting,” ClearView said in a note.

The PennEast court case has been closely watched by the oil and gas industry, which fears letting the appeals court decision stand could give states effective veto power over natural gas pipeline projects.

“It’s pretty clear for those states that are just trying to block pipelines, this gives them one more potential tool to try and sink them,” Tony Clark, a senior adviser at the law firm Wilkinson Barker Knauer who represents energy companies, told Josh.

Joan Dreskin, general counsel of the Interstate Natural Gas Association of America, said the industry lobbying group remains “optimistic the court will ultimately grant the petition in the fall and hear it next term.”

The proposed 116-mile pipeline would transport as much as 1 billion cubic feet of natural gas per day from northern Pennsylvania to New Jersey.

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‘MICRO’ NUCLEAR COMPANY OKLO RACES TO CURB CLIMATE CHANGE: Meet Jacob DeWitte, the 34-year old CEO of Oklo who is determined to shake up the struggling nuclear energy industry by moving his company through the cumbersome U.S. regulatory process faster than anyone before.

DeWitte is impatient because speed is necessary in order for his small, advanced nuclear reactor, an emissions-free technology of a type that has never been deployed, to be ready in time to help the world curb climate change.

“In this field, there was a lot of inertia,” DeWitte, co-founder and CEO of California-based Oklo, told Josh in a story posted this morning.

This month, Oklo’s tiny, 1.5-megawatt advanced “micro” reactor became the first nuclear design that does not use water as a coolant to have its application accepted by the Nuclear Regulatory Commission just four months after applying amid a global pandemic.

The acceptance, hailed by the nuclear industry as a milestone, was a key step toward DeWitte’s goal of having the first of his reactor designs, known as Aurora, operational by 2023 or sooner.

Debating the need for speed: But the rapid permitting process granted to Oklo and other developers of smaller nuclear reactors has prompted criticism from some environmental groups, which argue it’s dangerous.

In DeWitte’s view, though, environmentalist opposition itself is a main reason that the reactors don’t yet exist because it has ensured that the technology faces burdensome reviews. And in working to delay the technology, he said, critics are undercutting their goal of boosting carbon emissions-free energy.

MAKING SENSE OF CHESAPEAKE’S BANKRUPTCY: Chesapeake Energy, one of the pioneers of the shale fracking boom, filed for bankruptcy Sunday after the pandemic worsened financial challenges it had been experiencing for years.

The Oklahoma City-based company, founded by trailblazer Aubrey McClendon, was once the second largest producer of natural gas in the U.S.

But the company overleveraged itself drilling for gas, and was slower to pivot to shale oil, which is more lucrative as U.S. gas prices have stayed historically low.

“It’s difficult to point to another company that made more of a widespread impact on the US shale sector than Chesapeake,” said Alex Beeker, principal analyst of corporate upstream at Wood Mackenzie. “Chesapeake showed the market – and its competitors – how quickly production could grow, how fast projects could develop, and what the updated U.S. model for engaging with stakeholders looked like.”

First mover, or an exception to the rule? Artem Abramov, head of shale research at Rystad Energy, said Chesapeake’s bankruptcy was anticipated and “not really representative of the rest of the industry,” since oil majors and large independents now control much of the U.S. light oil supply and are able to survive at $35-40 per barrel oil.

Dan Eberhart, CEO of drilling services company Canary, said he expects to see more bankruptcies among exploration and service companies.

“This is an early one, not the last one,” Eberhart, a donor to President Trump, told Josh. “Oil has recovered some but not enough to save the weaker players with the weaker balance sheets or the oilfield service companies in general. The oil and gas industry is entering its own sequel to The Hunger Games.”

TOP HOUSE REPUBLICANS BACK AMERICAN CLIMATE CONTRACT: GOP Leader Kevin McCarthy, along with several other top House Republicans, lent their support Monday for the American Conservation Coalition’s climate framework.

The conservative youth climate group unveiled their American Climate Contract in April with grassroots support. The framework calls for the United States to advance policies that “move toward a goal of global net-zero carbon emissions by 2050,” and focuses on four policy areas: investing in energy innovation, modernizing infrastructure, supporting conservation measures that store carbon, and engaging globally to reduce emissions.

“Prior to this, the conversation continued to be so defined by the Green New Deal being the benchmark, and I think this is the next step,” said Quill Robinson, the ACC’s government affairs director. More details in Abby’s story posted this morning.

REAGAN-FOUNDED POLITICAL GROUP AIMS TO SAVE THE TONGASS: Citizens for the Republic, a political action committee founded by Ronald Reagan in 1977, just before he ran for president, is fighting to change Trump’s mind on opening up the largest U.S. national forest to more development.

To do so, the group is leaning on economic and anti-China arguments. Opening up the Tongass to logging would benefit the Chinese, the main purchasers of the region’s timber, at the expense of U.S. taxpayers, Citizens for the Republic argues.

The Forest Service has proposed to exempt Alaska’s Tongass National Forest from the so-called “roadless rule,” which would open up 9.5 million acres of untouched forest to logging and development. The agency is expected to make a final decision later this summer or early fall.

Citizens for the Republic hopes to change the administration’s mind before then. The group is conducting polling, showing that neither Alaskans nor swing state voters want the Trump administration to lift the roadless rule protections. It’s also planning to send a letter directly to the president signed by prominent conservatives opposing the administration’s plans.

More on the Reagan-founded group’s effort, and Trump’s plans for the Tongass, in Abby’s story posted Sunday.

FLOOD RISKS ARE MUCH WORSE THAN GOVERNMENT SAYS: Nearly twice as many U.S. properties may be susceptible to flood risk than federal government projections, according new data compiled by First Street Foundation, a nonprofit research firm.

The analysis out Monday identified 14.6 million properties as facing a “substantial risk” of having a 100-year flood, one that has a 1% chance of striking in a given year.

Flood maps maintained by the Federal Emergency Management Association only classify 8.7 million properties as having substantial risk from flooding.

Explaining the difference: FEMA has struggled to keep its flood maps up-to-date as climate change worsens. First Street Foundation analyzes flooding caused by heavy rain events, an area FEMA does not study. FEMA only looks at river-based flooding.

The new analysis also accounts for sea level rise, warming ocean surface temperature, and changing precipitation patterns. FEMA does none of those things.

Not just a coastal problem: Analysts say the federal government has done a good job documenting flood risk for coastal states, but the new analysis uncovers risks in Midwest and western states too.

For example, 13% of properties in Chicago face a “substantial” flooding risk, according to First Street Foundation. FEMA’s flood maps, by contrast, categorize just 0.3% of Chicago’s more than 600,000 properties as being inside the 100-year flood zone, the New York Times reported.

The top five states with the greatest proportion of properties currently facing substantial flood risk are West Virginia (24.4%), Louisiana (21.1%), Florida (20.5%), Idaho (14.8%) and Montana (14.2%), First Street Foundation said.

HARVARD STUDY MAKES CASE FOR STRENGTHENING SOOT STANDARDS: Stricter limits on fine particulate matter pollution could save more than 140,000 lives over a decade, Harvard researchers found in a study released Friday.

If the U.S. lowered its PM2.5 standards by 2 micrograms per cubic meter (to 10 micrograms per cubic meter), it would lower mortality risk by 6%-7%, says the study, which examined 16 years’ worth of data from 68.5 million Medicare enrollees, matching their zip codes with air pollution data. The 10 micrograms per cubic meter level is consistent with the World Health Organization’s annual guideline.

Why the study matters: The EPA has proposed to keep the PM2.5 standards where they are, foregoing tighter limits that environmentalists and the agency’s own staff said were necessary to protect public health. The public comment period for that proposal closes today.

“[A]s our new analysis shows, the current standards aren’t protective enough, and strengthening them could save thousands of lives,” said Francesca Dominici, a co-author and professor of biostatistics, population, and data science. “[W]e hope our results can inform policymakers’s decisions about potentially updating the standards,” she added in a statement.

CORN-STATE GOVERNORS PRESSURE EPA ON RFS ‘GAP’ PETITIONS: The EPA should reject the 52 waivers it is considering from small refiners requesting exemptions from prior years of the Renewable Fuel Standard, the governors of South Dakota, Minnesota, Iowa, and Nebraska wrote the agency Monday. All of the governors except Minnesota’s are Republican.

Their letter comes as corn-state lawmakers have been increasing pressure on the EPA to deny the waivers, which they and biofuels producers see as a tactic to circumvent a court ruling earlier this year that sharply restricted the EPA’s ability to grant exemptions. Iowa Republican Sen. Joni Ernst announced Friday she wouldn’t support Trump’s nominee to be the EPA’s deputy until the agency said how it would address the waiver requests.

According to the governors’ letter, if the EPA approved all 52 waivers, “the market will lose more than two billion gallons of biofuel blending requirements.”

DEMOCRATS MAKE TRUMP’S BLM PICK AN ISSUE IN TIGHT SENATE RACES: Democrats in western states pounced Friday after Trump nominated William Perry Pendley to lead the Interior Department’s Bureau of Land Management, an agency he has been leading on a temporary basis for nearly a year.

Pendley is a controversial figure who urged the sale of public lands before coming to BLM.

Democrats challenging incumbents for Senate seats in tight races in Western states quickly tried to portray the nomination as a liability for Republicans.

Steve Bullock, Montana’s governor who is challenging Republican Sen. Steve Daines, called Pendley a “dangerous threat” to Republicans and Democrats, an implicit challenge for his opponent to vote him down.

John Hickenlooper, Colorado’s former governor who is in the running to challenge Republican Sen. Cory Gardner, issued a similar taunt to his potential opponent.

“William Perry Pendley said he supports selling off our public lands. As director of @BLMNational, he’d be in charge of all 245 million acres of them.

So, will Cory Gardner vote to confirm him?” he tweeted.

The Rundown

Bloomberg House Democrats will call for 100% clean cars by 2035

Wall Street Journal BP exits petrochemical business in $5 billion deal

Reuters France’s Macron pledges 15 billion euro green push after vote route

Bloomberg Chinese oil titans plan joint crude buying to add market clout

MONDAY | JUNE 29

12:00 p.m. Citizens for Responsible Energy holds a virtual forum entitled “Reigniting the clean energy economy: Policy options and opportunities.”

TUESDAY | JUNE 30

2:30 p.m. 366 Dirksen. The Senate Energy and Natural Resources Committee holds a hearing to examine the impacts of the COVID-19 pandemic in the territories.

WEDNESDAY | JULY 1

1 p.m. The American Conservation Coalition holds a virtual conversation with GOP Rep. Cathy McMorris Rodgers of Washington, streamed live from its Facebook.

6 p.m. The American Conservation Coalition holds a virtual roundtable discussion with GOP Reps. Tom Reed of New York, Bruce Westerman of Arkansas, and John Curtis of Utah, streamed live from its Facebook.

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