with Paulina Firozi
One of Trump’s many job-creating promises during the campaign was to make it easier for companies to extract and deliver fossil fuels, so making good on these requests was a win-win for the White House and industry.
Although a bushelful, that may have been the low-hanging fruit. API has another ask of Trump that will be harder for the president to fulfill: preserving a key investment-dispute provision of the North American Free Trade Agreement, which from Trump’s perspective is a “job-killing” trade deal between Canada, Mexico and the United States.
“We’re still optimistic that at the end of the day, this will be handled appropriately,” Jack Gerard, API president and chief executive, said during a teleconference with reporters on Friday. “If it isn’t, I think all of us, including those of us in the oil and gas industry, are going to have to look long and hard at the situation.”
Here’s what API (along with many other business groups) is asking for: that Trump push to preserve a system of resolving international trade disputes called investor-state dispute settlement, or ISDS.
Here’s how ISDS works: Say you’re a multinational corporation that decides to invest in a foreign nation. You put in your investment — it could be a gold mine in Indonesia or a luxury resort in Egypt — but suddenly, the foreign government issues a regulation that you think hampers your business. Under ISDS, you can sue that foreign government for the investment you think you lost.
(As the links above indicate, BuzzFeed News has a definitive investigative series on ISDS.)
ISDS is meant to inspire confidence in corporations making investments in foreign countries. But the arbitration system draws ire from many corners. Most environmentalists don’t like how ISDS hamstrings governments that are attempting to curtail pollution. And some conservatives don’t like how ISDS undermines national sovereignty by having tribunals of corporate lawyers, not judges, hear cases.
And there is where the strange bedfellows are made. ISDS is a feature of many free-trade agreements, including NAFTA. But the White House is putting together a proposal to allow the United States, Mexico and Canada to withdraw from the North American arbitration system at will, the Wall Street Journal reported in August.
But big businesses, oil and gas included, don't want the boat rocked. With the third round of NAFTA renegotiations underway as of Saturday, U.S. industrial groups are lining up to preserve the arbitration system that, according to API’s Gerard, “provides what we need in the U.S. to secure that investment overseas.”
Of particular concern to oil companies is Mexico. When NAFTA was first signed 23 years ago, Mexico had a nationalized energy sector. Since then, Mexico has begun selling off oil and gas fields. Foreign investors, including ExxonMobil, want ISDS protection if they are going to drill there.
“That in many respects has opened the door to a flood of new private investment that’s going into Mexico to help further develop their oil, gas and natural resource sector,” said Cal Dooley, president and chief executive of the American Chemistry Council and a former congressman. “It is even more important that we see ISDS be clarified in how it pertains to the energy sector in Mexico.”
William Waren, senior trade analyst at Friends of the Earth, said that energy firms are particularly assertive in using ISDS.
“Just about the biggest and most frequent plaintiffs are big oil companies.” Waren said. Given that annual profits at the largest multinational oil firms can sometimes dwarf the gross domestic products of developing nations in which they operate, those companies “are in a position to coerce smaller countries” through ISDS, Waren added. He said most of the environmental community wishes to see ISDS stripped out of trade deals altogether.
Since the United States’s own fracking boom, natural gas exports via pipeline have doubled between 2009 and 2016, according to the U.S. Energy Information Administration. Almost all that increase in exported gas went to Mexico. NAFTA lets that gas flow across with no tariffs.
Which is why, even if you set ISDS aside, the oil and gas sector has responded forcefully to comments from the president suggesting he is willing the scrap the agreement altogether.
“Personally, I don't think we can make a deal,” Trump said at an Arizona rally in August. He added, “I think we'll end up probably terminating NAFTA at some point.”
Or as Trump tweeted about the "worst trade deal ever made" in late August after the first round of negotiations:
We are in the NAFTA (worst trade deal ever made) renegotiation process with Mexico & Canada.Both being very difficult,may have to terminate?— Donald J. Trump (@realDonaldTrump) August 27, 2017
If persuading the president fails, the oil and gas industry can always lobby Congress, which will have to ratify any changes to NAFTA. Though it has many critics in both chambers, Congress has acted previously to protect ISDS.
For example, in 2015, Sen. Elizabeth Warren (D-Mass.), a strong opponent of ISDS, introduced an amendment designed to stymie the Obama administration from including ISDS in the Trans-Pacific Partnership, a proposed free-trade agreement for 11 nations along the Pacific Ocean.
Her effort failed.
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-- Thus spoke Zinke: Interior Secretary Ryan Zinke gave a speech Monday to the National Petroleum Council, an advisory committee representing the oil and natural gas industry. The Associated Press's Matthew Daly has a dispatch from the event. Let's parse some of Zinke's comments:
“Push your generals where the fight is." Zinke is reorganizing Interior, the AP reports, with an eye toward moving the Bureau of Reclamation and Bureau of Land Management to Western states. “It’s going to be huge,” he said. “I really can’t change the culture without changing the structure.”
Zooming out: Consistent with Trump's "drain the swamp" message, Zinke is kicking forward an idea that has been booted around by Republicans in Congress for at least a couple months to move whole departments out of the D.C. area. Earlier this year, Reps. Warren Davidson (R-Ohio) and Ted Budd (R-N.C.) introduced legislation requiring all federal agencies to relocate their headquarters outside Washington. Rep. Jason Chaffetz (R-Utah) also put forward a resolution asserting it is unnecessary for federal agencies to be located in the metropolitan area.
“I got 30 percent of the crew that’s not loyal to the flag." Making an extended nautical metaphor, according to Daly, Zinke compared Interior to a pirate ship that captures “a prized ship at sea and only the captain and the first mate row over” to finish the mission. “We do have good people," he added, “but the direction has to be clear and you’ve got to hold people accountable.”
Zooming out: It's unclear whether Zinke was citing a survey or his own gut feeling, but the sentiment is in line with some of the White House's "deep state" rhetoric. In either case, it engendered reaction. From the Supreme Court reporter at Reuters:
-- What the tweet?: President Trump rattled off a series of tweets on Monday night on Puerto Rico — not about the devastation on the island, but on its long-standing infrastructural and fiscal problems that have been exacerbated by the storm:
Texas & Florida are doing great but Puerto Rico, which was already suffering from broken infrastructure & massive debt, is in deep trouble..— Donald J. Trump (@realDonaldTrump) September 26, 2017
...It's old electrical grid, which was in terrible shape, was devastated. Much of the Island was destroyed, with billions of dollars....— Donald J. Trump (@realDonaldTrump) September 26, 2017
Critics lamenting that the president hadn't yet tweeted about the storm-ravaged U.S. territory may be wishing otherwise right now.
As Susan Rice, former national security adviser under President Obama, wrote:
Or as MSNBC’s Chris Hayes said:
INSANE for the president talking about PR's debts to "Wall Street" while 60% of ppl have *no safe drinking water*!!!— Chris Hayes (@chrislhayes) September 26, 2017
A less-than-full-throated response to the Puerto Rican crisis threatens to undermine one of the few initiatives from his administration that actually polls well, as noted by The Post's Philip Bump writes. "In the new Post-ABC poll released Sunday," Bump writes, "Trump’s response to the hurricanes that flooded Texas and panicked Florida was considered one of the few bright spots in his administration. More than half of Americans approved of the responses to Hurricanes Harvey and Irma; the poll was in the field as Maria hit."
"Hamilton" creator Lin-Manuel Miranda responded to the news that the White House plans to send a disaster aid request for Puerto Rico to lawmakers in October:
Meanwhile, The Post’s Joel Achenbach, Dan Lamothe, and Alex Horton report on the pressure the administration is facing to speed up recovery efforts:
The administration said Monday that its response has been robust. The Federal Emergency Management Agency, which is coordinating the recovery effort, said 10,000 federal employees have been deployed to the Caribbean. The Coast Guard has sent in 13 ships known as cutters. Commercial barges are arriving with relief supplies. The National Guard is being housed on barges and on a cruise ship that arrived this weekend.
However, officials leading the response and recovery admit they’re facing serious logistical challenges, starting with damage to the ports and airports. Many of those facilities have been reopened just within the past day or two, but only for daytime operations, because of safety concerns. Radar and control tower capabilities are low, limiting the pace of incoming flights.
For people on the islands, help is arriving glacially. In interviews, some have questioned why there’s so little sign, or no sign at all, of government agencies.
Here are some images from the disaster zone:
From CBS News Correspondent David Begnaud:
-- "These aren't normal times:" Members of Congress, in the meantime, are jumping out ahead of one another to urge aid for the island.
Sen. Marco Rubio (R-Fla.) -- who represents hundreds of thousands of Puerto Ricans living in Florida -- visited the territory on Monday, and tweeted he would “do all we can to help” Puerto Rico:
A few highlights from Rubio’s presser in San Juan, from The Post’s Ed O’Keefe:
Upon returning to Washington, Rubio tweeted:
Nebraska Sen. Ben Sasse (R) called for stepped-up aid as well:
So did Texas Rep. Joaquin Castro (D):
House Speaker Paul D. Ryan (R-Wis.) pledged Monday to ensure residents in Puerto Rico “have what they need.”
"The stories and images coming out of Puerto Rico are devastating," Ryan said, according to the Associated Press. "Congress is working with the administration to ensure necessary resources get to the U.S. territory. Our fellow citizens in Puerto Rico remain in our prayers as we make sure they have what they need."
-- By the numbers: Puerto Rico Governor Ricardo Rosselló said Monday many of the tens of thousands of people living near the damaged Guajataca Dam had evacuated ahead of what he warned could be an imminent failure. Reuters detailed the status of some of the territory’s recover efforts:
55 percent of transmission towers may be down, per preliminary FEMA reports.
More than 90 percent of the distribution system could be destroyed.
More than 90 percent of cellphone sites on the island are down, per the FCC.
As of Monday, the storm had killed at least 29 people in the Caribbean, with at least 10 of those in Puerto Rico.
-- Dispatch from Vieques: Amy Gordon details the scene in Vieques, an island of 9,000 people off the eastern coast of Puerto Rico, for The Washington Post. The small island was hit hard, Gordon writes, and like the rest of the territory, is largely without power and means of communication.
[I]t has been in a near-complete blackout since before Maria roared through. Like many isolated areas of Puerto Rico, it remains without power, phones or any way to connect with the mainland — nearly a week after the hurricane. Gas is scarce, food is scarce, there is no drinking water and information is almost nonexistent.
Almost any structure made of wood here was damaged or destroyed. The whole front of one home was ripped off, exposing a room with only a baby's crib. A campground full of wooden cabins was almost completely wiped away, save for the concrete buildings. The walkway with concrete pillars in Malecon was toppled and tossed…
In an information vacuum, the only way anyone on the island could learn anything was a daily meeting in the town plaza at 2 p.m. Roughly 40 to 60 people would show up to hear from town government officials and get updates — a frustrating exercise because there weren't often updates to give. One day, a resident hosted an open poetry event after the town meeting, just to bring people together.
-- More Zinke from the National Petroleum Council event: “There is no off-ramp” for removing recovered species from Endangered Species Act listing, Zinke said.
Zooming out: House Republicans are busy putting forward amendments to ESA to update what they regard as a cumbersome and outdated law, including one from Rep. Dan Newhouse (R-Wash.) delisting the gray wolf.
“Fracking is proof that God’s got a good sense of humor and he loves us," Zinke told the oil and gas representatives.
Zooming out: We're not sure what to make of this one.
-- Energy Secretary Rick Perry also spoke at the event, telling oil executives they should be proud of the industry’s contribution to the climate.
"This industry is leading the world in affecting the climate and affecting the climate in a positive way," Perry said, Bloomberg reports. "I’m proud to be a part of this industry. You want to talk about saving lives that’s what we are doing."
Perry added that he's "frustrated" with the anti-fossil fuel movement.
From Utility Dive’s Gavin Bade:
Perry unleashed a pro-fossil rant before he left, saying oil industry is "affecting the climate in a positive way" & "saving lives"— Gavin Bade (@GavinBade) September 25, 2017
Bloomberg’s Catherine Traywick:
Perry urged the National Petroleum Council to find ways of using captured carbon dioxide in oil operations, according to Reuters.
"Integrating technology and deploying CCUS at scale still remains a commercial challenge," Perry said, using an acronym for "carbon capture utilization and storage technology." CO2, when injected into the ground, can help recover otherwise difficult-to-get pockets of oil.
Zooming out: Though the energy secretary's comments signal the Trump administration is onboard with parallel efforts in Congress to boost a carbon-capture tax credit, the White House has proposed to slash the budget of the Fossil Energy Research and Development Program, which is spearheading the department's carbon-capture research.
-- "Governments come and go:" ExxonMobil will launch a program to reduce its methane emissions by updating its equipment with more efficient technology and leak-detection sensors.
The program will be led by the company's shale-focused subsidiary, XTO Energy. The firm did not release the projected cost and savings associated with the three-year effort, Reuters reported. “We do believe this will have a meaningful impact on our methane-emissions reductions,” president of XTO Energy Sara Ortwein said, according to Reuters. “We remain committed to minimizing our environmental impact from our operations.”
What this means: The Trump administration has been trying to roll back methane-emissions rules issued by both the EPA and Interior. But big oil and gas companies like ExxonMobil operate on time scales extending far beyond the four to eight years Trump could be in office. As former ExxonMobil CEO Lee Raymond once put it, “We see governments come and go." Exxon's announcement is a sign that the largest U.S. oil and gas company is preparing for a day when the United States will again regulate methane emissions.
-- Eew: The EPA clarified on Sunday that it had recovered more than 500 containers with potentially hazardous material from Texas waterways following Hurricane Harvey, following a Friday statement that the containers were recovered from toxic waste sites.
The Associated Press reported that a Friday FEMA news release initially said the EPA had “conducted assessments of 43 Superfund sites and recovered 517 containers of unidentified, potentially hazardous material.”
Clarifying where the tanks were found on Sunday, a spokesman for the agency’s regional headquarters in Texas David Gray said “EPA and our response partners have been collecting containers orphaned after the hurricane… These are not related to Superfund clean ups.
-- Without even making landfall: Two oil refineries on the East Coast are making less gasoline and diesel as a result of rough conditions in the Atlantic due to Hurricane Maria, though the storm has not made landfall on the coast.
Bloomberg reports that conditions have affected the transfer of crude oil from ships to barges for delivery:
Philadelphia Energy Solutions Inc., which operates the largest oil-refining complex serving the New York Harbor market, was said to cut rates about 20 percent. Delta Air Lines Inc.’s Monroe Trainer in Pennsylvania, which was processing 30 percent less crude as of Sept. 23, may have to resort to using feedstock like vacuum gasoil in its main processing units because it’s running out of crude, the people said.
-- Hurricane Maria weakened slightly overnight, as it continues to move northward parallel to the East Coast, off the coast of the Carolinas. The category 1 hurricane’s maximum sustained winds were at 75 mph as of the National Hurricane Center’s latest advisory, and it is expected Maria will be downgraded to a tropical storm by Tuesday night or Wednesday.
A tropical storm warning is in effect for the Bogue Inlet to North Carolina’s border with Virginia and the Albemarle and Pamlico Sounds. A storm surge watch is in effect from Cape Lookout to Duck.
On Monday, officials ordered evacuations from much of North Carolina’s Outer Banks, according to the Associated Press.
“Heavy ocean surf will be very dangerous all week. Deadly rip currents will be present and some storm surge flooding is possible,” Gov. Roy Cooper (D) said in a Monday statement. “Visitors to our beaches should stay out of the water during these dangerous conditions and wait until Maria passes. Coastal residents should make sure they are ready and their homes are prepared.”
From Fox8 reporter Alex Rose:
-- But how many Delawares is it?: An iceberg quadruple the size of Manhattan broke off an Antarctic glacier, which The Post’s Chris Mooney reports is the “second time in two years it has lost such a large piece.”
The Pine Island Glacier loses 45 billion tons of ice into the ocean each year, Mooney writes. Stef Lhermitte, a satellite observation specialist at Delft University of Technology in the Netherlands, tweeted how Pine Island had calved:
That’s not all. Ohio State glaciologist Ian Howat told Mooney the latest break could lead to others.
“A series of thin cracks was visible in the center of the ice shelf about 3 km inland of the current break in March 2017,” he said in an email. “We don’t have any more recent data to see what its status is. But this means that we would expect another calving event very soon.”
-- It's been a bad year for the right whale. A new model to better predict the North Atlantic right whale population reveals that its numbers have declined since 2010, the Associated Press reported.
The NOAA said that the number of right whales decreased from 482 in 2010 to 458 in 2015. The population for the endangered mammal was at 270 in 1990, the AP noted. "There were 14 known deaths of North Atlantic right whales so far in 2017," the AP reports, "and reproduction has been poor, scientists say."
National Clean Energy Week continues.
The National Clean Energy Week Symposium.
The Institute for Policy Integrity holds an event on “Energy, Climate and a Different Federalism.”
The House Energy and Commerce Subcommittee on Energy holds a hearing on “Technology’s Role in Empowering Consumers.”
The Senate Energy and Natural Resources Committee holds a hearing to consider Bruce J. Walker to be assistant secretary of Energy for Electricity Delivery and Energy Reliability and Steven E. Winberg to be assistant secretary of Energy for Fossil Energy.
The Women’s Council on Energy and the Environment holds an event on Maryland’s Offshore Wind and Energy Efficiency Policies.
The Environmental Law Institute hosts an event on Energy Transition and the Future of Hydrokinetic Energy in the United States.
The American Gas Association’s Natural Gas Roundtable holds an event featuring David Carroll, president of the International Gas Union.
The Wilson Center’s North America Energy Forum is on Wednesday.
The Senate Energy and Natural Resources Subcommittee on National Parks holds an oversight hearing on “Encouraging the Next Generation to Visit National Parks” on Wednesday.
The Congressional Advanced Energy Storage Caucus holds a briefingwith Reps. Chris Collins (R-N.Y.) and Mark Takano (D-Calif.) on the U.S. energy market and electric infrastructure resilience on Wednesday
The Environmental Markets Association annual meeting begins on Wednesday.
White House press secretary Sarah Huckabee Sanders pushes back against criticism of Trump's alleged lack of focus on Puerto Rico:
Puerto Rico's hospitals struggle after Hurricane Maria:
Desperate travelers crowd Puerto Rico's airport in hopes of way out:
See Puerto Rico after Hurricane Maria from the air:
Stephen Colbert comments on Puerto Rico: