As Energy Secretary Rick Perry and others have made clear during the White House’s self-styled “Energy Week,” Trump wants to flip from net importer to net exporter sooner rather than later. That will require his department giving the greenlight to the construction of more terminals at which LNG can be loaded up and shipped out.
“American companies can and already have exported U.S. LNG to our international trading partners in Europe and in Asia,” Perry said at the White House on Tuesday. “Unleashing our full energy potential in this country will lead to robust job growth and expansion in every sector of the economy.”
But the effort to sell more of this fuel abroad may run afoul of the other Trump administration goal of boosting U.S. manufacturing, a trade group has repeatedly warned the White House. These domestic manufacturers fear that exporting too much natural gas will drive up energy prices at home and give a leg up to factories abroad.
The oil and gas industry groups counter that with ever-improving extraction techniques, there will be enough natural gas pumped in the United States to meet the energy needs of factories here and still sell the surplus abroad.
The tiff is just one example of how two industries that once held common ground against the Obama administration’s regulatory agenda now find themselves at odds under a new president who promised to bolster U.S. businesses. Now they must choose between policies that may aid one business sector at the expense of another.
“President Trump has clearly articulated a fair trade and ‘America First’ policy,” said Paul Cicio, president of the Industrial Energy Consumers of America (IECA), which represents a diverse group of chemical, metal, paper, glass and cement producers.
“I believe when he is confronted with the facts,” Cicio added, “he will support what we are recommending.”
But so far, the Trump administration has sided with oil and gas interests.
To kick off “Energy Week” on Monday, President Trump said at a news conference with Indian Prime Minister Narendra Modi that he is “looking forward to exporting more American energy to India as your economy grows, including major long-term contracts to purchase American natural gas, which are right now being negotiated.” (Indeed, Indian companies have already secured agreements to buy natural gas from at least three U.S. companies.)
Putting his supposed negotiation skills on display, Trump added he is “trying to get the price up a little bit.”
But IECA, the manufacturers’ trade group, sent a letter Wednesday to Rick Perry and Wilbur Ross, Trump’s Commerce secretary, arguing that India is among the sort of countries to which the United States should not export its natural gas.
Contending that unbridled natural gas exportation “poses a significant long-term threat” to industries that consume a lot of energy in the course of business, IECA asked that the Energy Department to halt approving LNG exports to countries with which the United States does not have free-trade agreements.
Citing industry research, IECA argues that “utilizing natural gas in manufacturing, as compared to exporting it, creates eight times more jobs.” The letter was a follow-up to one IECA sent in April urging a similar moratorium.
With Trump’s decision to terminate the Trans-Pacific Partnership, the United States currently has free-trade agreements with only 20 nations. Such a moratorium would stop any new shipping agreements to some big energy consumers, such as Europe, Japan and India.
Cicio, the president of IECA, said that when lobbying to public policy officials, they are taken aback by the rate at which the United States is extracting its natural gas reserves. Citing forecasts from the government’s independent Energy Information Administration, IECA wrote that at the current rate of extraction, the United States will burn through more than half its natural gas reserves by 2050.
“What most people don’t realize is not only is the United States a large natural gas producer, it is the largest natural gas consumer,” Cicio said.
But natural gas industry representatives say that estimate does not fully take into account the natural gas pockets that will be unlocked with new hydraulic fracturing, or fracking, know-how.
“The gas producers in the United States have gotten so efficient and become so proficient at making wells profitable” Charlie Riedl, executive director of the Center for Liquefied Natural Gas, said. “So we’re able to continue producing to meet domestic needs. And what we’re talking about exporting is a surplus of gas.”
They also point another economic benefit to manufacturers of more natural gas production. Byproducts of processing natural gas are often the raw ingredients in making commercial chemicals and plastics. More natural gas sold means a glut of these materials.
“It really does lead to an interesting dynamic where in many cases you’ll actually have manufacturers benefiting from more affordable prices,” Erica Bowman, chief economist of the American Petroleum Institute, said.
Before Trump arrived at the White House, Obama's Energy Department weighed in on this inter-industry row. A 2015 DOE study that year found that while more LNG exports will indeed raise domestic prices and strain “energy-intensive” industries like cement, concrete, and glass makers, the “[n]egative impacts in energy‐intensive sectors are offset by positive impacts elsewhere.”
So far, the Trump administration, in broad strokes, seems to agree.
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-- Wave goodbye to WOTUS. The Trump administration is looking to repeal an Obama-era regulation known as the Waters of the United States or WOTUS rule that gives the EPA authority over regulating small waterways and wetlands that lead into larger bodies of water.
The Post's Steven Mufson and Juliet Eilperin reported that EPA head Scott Pruitt said while testifying before a Senate appropriations subcommittee yesterday that he wants to “provide clarity” by “withdrawing” the rule. In the meantime the EPA and Army Corps of Engineers would enforce guidance from 2008 in establishing whether waterways would be subject to federal authority.
Mufson and Eilperin write that the rule “unambiguously gives EPA and the Army Corps of Engineers authority that many think the agencies already possessed under the Clean Water Act. The 1972 law gave the agencies control over navigable rivers and interstate waterways, but a series of court rulings left the extent of that power ambiguous. The Obama administration sought to end a decade of confusion by finalizing the WOTUS rule, which took effect in August 2015, triggering protests from a variety of real estate development, agricultural and industrial interests.”
Pruitt said Tuesday that he would recuse himself from working on the rule because as Oklahoma attorney general, before joining the Trump administration, he sued the EPA over the regulation, saying it “usurps” states' authority.
In a statement, Pruitt said the administration is “taking significant action to return power to the states and provide regulatory certainty to our nation's farmers and businesses.”
The Natural Resources Defense Council president Rhea Suh said the proposal “strikes directly at public health. It would strip out needed protections for the streams that feed drinking water sources for one in every three Americans. Clean water is too important for that."
Friends of the Earth tweeted that “eliminating the Clean Water Rule is the biggest assault yet on our water.”
House Speaker Paul Ryan applauded the proposal and tweeted a statement saying that the regulation “would have been a disaster for rural communities in the West and across the country.”
-- Mr. Pruitt goes (back) to Congress. Senators peppered Pruitt with questions during yet another budget testimony for the EPA administrator on Tuesday.
Sen. Tom Udall (D-N.M.) called the agency’s budget request “downright offensive.”
“I can’t square this with your rhetoric about returning EPA to its core responsibilities,” Udall said. “Nothing was spared. EPA’s core is hollowed out… These cuts aren’t an intent to rein in spending, they are an intentional step to undermine science and ignore environmental and public health realities.”
And while Sen. Lisa Murkowski (R-Alaska) praised the agency’s “Back to Basics” approach to focus on the EPA’s agenda, The Hill reported, she said she could not support the proposed budget cuts.
[Murkowski] noted that while she supports Pruitt’s approach of focusing on the EPA’s central responsibilities while steering away from the climate policies of the Obama administration, the current budget proposal is “in direct contrast” to such an approach. She singled out aid to Alaska Native villages and a radon detection program as areas that have proven to save and improve lives.
"We have rejected changes like these in past, and I will certainly push my colleagues to do so again this year," Murkowski said.
Senators also probed Pruitt on the move not to renew dozens of scientific advisers. Pruitt responded that “those individuals can reapply for spots,” and added he believes the advisory boards need increased geographic diversity.
-- Pediatricians vs. Pruitt. The American Academy of Pediatrics told Pruitt that pediatricians are "deeply alarmed" that Pruitt's refusal to restrict the use of a class of pesticides called chlorpyrifos, The Hill reported.
Meanwhile, the Associated Press reports that Pruitt "met privately with the chief executive of Dow Chemical shortly before reversing his agency’s push" to restrict chlorpyrifos. EPA spokeswoman Liz Bowman told the AP: “They did not discuss chlorpyrifos."
-- Rick Perry gave a very GIF-able press conference at the White House Tuesday to discuss initiatives the administration is highlighting during "Energy Week."
Besides the GIFs, here are the highlights:
- Perry backed down from a hard line he drew on Capitol Hill on finally opening Yucca Mountain in Nevada for storing over 70,000 tons of nuclear waste.
When asked about Yucca Mountain on Tuesday, he said: “We’ve made no decisions at DOE, nor has this administration from the standpoint of where we’re going to look.”
What changed? Sen. Dean Heller (R-Nev.), a key vote for passing the Senate's health-care bill, and other Nevada Republicans came out strongly against any new talk of opening Yucca Mountain.
- Like Pruitt, Perry endorsed Steven Koonin's call for a “red team-blue team” exercise on climate change science. Perry floated the idea last week as well. The Wall Street Journal piece in which Koonin, a former undersecretary for science at Obama's Energy Department, lays out of the idea has quickly become one of the most influential op-eds of Trump's short presidency.
A primer on “red team-blue team”: "Koonin argued that such an exercise would subject the scientific consensus on climate change to a rigorous test. The red team would challenge consensus findings from scientific assessments, and the blue team would have the opportunity to respond... Historically, red teams have been called upon in military exercises as a way to introduce alternative ideas and, ultimately, strengthen organizational performance. But David Titley, a climate scientist at Penn State University and retired Navy rear admiral, said introducing a red team into climate science doesn’t make sense. 'Science already has a red team: peer review,' he said."
- Perry was asked repeatedly by the press about his own position on climate change science. Finally, Perry came to this answer: “Climate is changing, always has. Man at this particular point of time is having effect on it. How much effect is what’s at debate here." He said that he does not know President Trump's current stance on the science is.
-- EERE and ARPA-E targeted for cuts. Those who thought Congress would be a bulwark against the deep cuts the Trump administration has proposed for the Energy Department will be disappointed with the first budget bill to come out of the House of Representative. The bill, up for markup on Wednesday, would slash two offices that fund much of the department's renewable energy research.
- cuts funding for the Office of Energy Efficiency and Renewable Energy (EERE) from $2.1 billion to $1.1 billion and
- cuts funding for the Advanced Research Projects Agency-Energy (ARPA-E) from $300 million to... $0.
The House subcommittee bill "rips the heart out of EERE and would kill much of the economic, security and environmental benefit the program has long provided our nation under both Republicans and Democrats," said Dan Reicher, a former assistant secretary of EERE under President Clinton. He and a bipartisan group of six other Senate-confirmed heads of EERE, whose mission is to bring of renewable energy technology to market, recently told Congress and the Trump administration in a letter that the deep budget cut proposed for that office would cripple its ability to function.
The programs will likely find more support in the Senate. It was only two years ago when three GOP senators -- Lamar Alexander (R-Tenn.), Cory Gardner (R-Colo.) and Lisa Murkowski (R-Alaska) -- called for boosting funding for ARPA-E, which backs research at start-ups and other groups outside the Energy Department.
-- How high can you go? Reuters reports that three leading offshore wind operators are looking into super-tall "megaturbines" in order to "adapt to the upcoming reality with dwindling government handouts."
How tall is super-tall? Nearly as high as the Eiffel Tower.
-- New threat to the ozone layer. While the hole in the protective ozone layer above Antarctica is finally healing ever since the 1987 Montreal Protocol cut emissions of ozone-eating chlorofluorocarbons, scientists have just identified a new threat to its recovery. Chelsea Harvey writes: "A study, just out Tuesday in the journal Nature Communications, suggests that a common industrial chemical called dichloromethane — which has the power to destroy ozone — has doubled in the atmosphere over the last 10 years. And if its concentrations keep growing, scientists say, it could delay the Antarctic ozone layer’s return to normal by up to 30 years."
- The House Science, Space and Technology Subcommittees on Energy and on Research and Technology will hold a joint hearing on material science.
- The Senate Environment and Public Works Committee will meet to vote on Annie Caputo and David Wright, two of Trump’s nominees for the Nuclear Regulatory Commission, and Susan Bodine, a nominee for assistant administrator for the EPA’s Office of Enforcement and Compliance Assurance.
- Trump is planning to host governors and leaders of American Indian tribes to talk energy policy.
- The Senate Agriculture, Nutrition and Forestry Committee will hold a hearing on conservation and forestry on Thursday.
- The House Natural Resources Subcommittee on Energy and Mineral Resources will hold an oversight hearing on oil and natural gas development on federal lands on Thursday.
- The Senate Appropriations Subcommittee on Commerce, Justice, Science and Related Agencies will hold a hearing on NASA’s budget request on Thursday.
- Trump, Perry, Zinke and Pruitt will be part of an “American Energy Dominance Panel,” for Energy Week on Thursday.
- Trump will deliver a speech Thursday on “energy dominance.”
Perry outlines "energy dominance" in the US:
Perry weighs in on climate change:
Perry says states 'will come up with ways to deliver health care':
Here's what happened after Senate leaders postponed the health-care vote:
Stephen Colbert says "'Repeal And Replace' Is Being 'Delayed And Postponed'"