Trump executive order on domestic energy policy

U.S. President Donald Trump has signed an executive order affecting domestic energy policy.  His March 28, 2017 Presidential Executive Order on Promoting Energy Independence and Economic Growth includes a variety of directives, generally aimed at reducing federal regulations affecting domestic energy production.  Here's a look at his Executive Order targeting Obama-administration climate regulations and other agency actions that potentially burden the development or use of domestically produced energy resources.

The Executive Order includes 8 operative sections.  One provides policy statements; six call for regulatory reviews that could lead to rule changes or revocations, or directly revoke and rescind Obama-era actions.  The final section includes general provisions.

Section 1 includes five policy statements, such as that "is in the national interest to promote clean and safe development of our Nation's vast energy resources, while at the same time avoiding regulatory burdens that unnecessarily encumber energy production, constrain economic growth, and prevent job creation."  It also sets a federal policy "that executive departments and agencies (agencies) immediately review existing regulations that potentially burden the development or use of domestically produced energy resources and appropriately suspend, revise, or rescind those that unduly burden the development of domestic energy resources beyond the degree necessary to protect the public interest or otherwise comply with the law."

Section 2 calls for an immediate review of all agency actions that potentially burden the safe, efficient development of domestic energy resources, "with particular attention to oil, natural gas, coal, and nuclear energy resources."  It directs agency heads to submit a memorandum to the Office of Management and Budget detailing such potentially burdensome actions, and including "specific recommendations that, to the extent permitted by law, could alleviate or eliminate aspects of agency actions that burden domestic energy production."  With respect to actions targeted with specific recommendations in a final report, agency heads are directed to "as soon as practicable, suspend, revise, or rescind, or publish for notice and comment proposed rules suspending, revising, or rescinding, those actions, as appropriate and consistent with law."

Section 3 rescinds or revokes a variety of Presidential actions and reports, including several of President Obama's executive orders regarding climate change, the President's 2013 Climate Action Plan, and the Council on Environmental Quality's 2016 final guidance for federal agencies on consideration of greenhouse gas and climate issues in performing reviews of agency actions under the National Environmental Policy Act.

Section 4 calls for the Administrator of the Environmental Protection Agency to "immediately take all steps necessary to review" the Clean Power Plan governing electricity-sector emissions and related rules "for consistency with the policy set forth in section 1 of this order and, if appropriate, shall, as soon as practicable, suspend, revise, or rescind the guidance, or publish for notice and comment proposed rules suspending, revising, or rescinding those rules."

Section 5 disbands a working group on the social cost of greenhouse gas emissions, and restricts the ways agencies may account for the monetary value of changes in greenhouse gas emissions resulting from regulations.

Section 6 calls for the Secretary of Interior to lift moratoria on federal land coal leasing activities imposed under a 2015 order, and to commence federal coal leasing activities.

Section 7 calls for review of federal regulations affecting emissions from the oil and gas sector, including 2016 emissions standards for new, reconstructed and modified sources, and a 2015 rule governing hydraulic fracturing on federal and Indian lands, among others.

Section 8 includes general provisions, generally similar to those found in other executive orders.

Federal budget sequestration's impacts on energy industry, consumers

Unless Congress enacts a plan to reduce the federal budget deficit today, a procedure known as "sequestration" will take effect immediately, cutting government spending until the budget can be resolved.  What will sequestration mean for the energy industry and consumers?

Under the Budget Control Act of 2011 (BCA), sequestration automatically kicks in unless the Joint Select Committee on Deficit Reduction proposes a plan to reduce the deficit by $1.2 trillion, and Congress subsequently enacts that plan.  For fiscal year 2013, sequestration could mean spending cuts of $85 billion over the remaining seven months of the fiscal year.  According to the federal Office of Management and Budget, nondefense program spending will be cut by about 9%.

Each federal agency's operations will be affected by the sequestration.  The OMB Report Pursuant to the Sequestration Transparency Act of 2012 (394-page PDF) details likely cuts, including reductions in funding available under the U.S. Department of Energy's High Energy Cost Grants program.  The High Energy Costs Grant program provides funding for improving and providing energy generation, transmission and distribution facilities serving communities with average home energy costs exceeding 275% of the national average.  For example, the Maine island of Monhegan's electric utility won a $420,154 grant under this program to replace the island's current switchgear, add a smaller, 40 kW generator to the power station's fleet, and add a 13 kW solar photovoltaic array to the power station's roof.

The sequestration could also slash funding for the U.S. Department of Agriculture's Rural Energy for America Program (REAP).  REAP provides assistance to agricultural producers and rural small businesses to complete energy projects, including renewable energy systems, energy efficiency improvements, renewable energy development, energy audits, and feasibility studies

Other programs affected include the DOE's Energy Efficiency and Renewable Energy program, from which $148 million could be cut.  Likewise, the Low Income Home Energy Assistance Program (LIHEAP), which helps keep families safe and healthy through initiatives that assist families with energy costs, faces $285 million in cuts.

The funding reductions will also mean cuts to DOE's energy-efficiency and cybersecurity programs.  Likewise, the processing of applications for development of oil, gas, and coal on federal lands and waters would slow down as agency employees are furloughed.  

Will Congress act to avert sequestration?  If it takes effect, how long will it be until Congress enacts a compliant deficit reduction plan?  What price will society pay?

What the 2013 State of the Union said about energy

Tonight President Obama delivered the 2013 State of the Union address.  Energy figured heavily in his remarks, with emphasis on energy efficiency, natural gas production, and renewable energy.  His newly proposed policies, some of which require congressional approval, aim to boost the economy while protecting the environment.  Here's a look at what he said, relying on the text released online by the New York Times as text as prepared for delivery, as provided by the White House.

The State of the Union is a key opportunity for a president to speak his mind to the public and to Congress.  Article II, Section 3 of the U.S. Constitution directs the president to "from time to time give to Congress information of the State of the Union and recommend to their Consideration such measures as he shall judge necessary and expedient."  Presidents since Woodrow Wilson have delivered oral addresses to Congress.

President Obama's 2013 State of the Union address presented a number of energy issues and policies.  He criticized federal budget sequestration orders as disrupting priority programs including the energy sector:

In 2011, Congress passed a law saying that if both parties couldn’t agree on a plan to reach our deficit goal, about a trillion dollars’ worth of budget cuts would automatically go into effect this year. These sudden, harsh, arbitrary cuts would jeopardize our military readiness. They’d devastate priorities like education, energy, and medical research. They would certainly slow our recovery, and cost us hundreds of thousands of jobs. That’s why Democrats, Republicans, business leaders, and economists have already said that these cuts, known here in Washington as “the sequester,” are a really bad idea.

Energy security and sovereignty also figured prominently.  He cited advances in transportation fuel economy, renewable energy, natural gas, and reductions in carbon emissions:

After years of talking about it, we are finally poised to control our own energy future. We produce more oil at home than we have in 15 years. We have doubled the distance our cars will go on a gallon of gas, and the amount of renewable energy we generate from sources like wind and solar – with tens of thousands of good, American jobs to show for it. We produce more natural gas than ever before – and nearly everyone’s energy bill is lower because of it. And over the last four years, our emissions of the dangerous carbon pollution that threatens our planet have actually fallen.

Climate change also returned as a key area of focus, as it had in President Obama's second inaugural speech last month:

But for the sake of our children and our future, we must do more to combat climate change. Yes, it’s true that no single event makes a trend. But the fact is, the 12 hottest years on record have all come in the last 15. Heat waves, droughts, wildfires, and floods – all are now more frequent and intense. We can choose to believe that Superstorm Sandy, and the most severe drought in decades, and the worst wildfires some states have ever seen were all just a freak coincidence. Or we can choose to believe in the overwhelming judgment of science – and act before it’s too late.

To address climate change, President Obama asked Congress to develop a market-based solution, but vowed to take executive action if necessary:

The good news is, we can make meaningful progress on this issue while driving strong economic growth. I urge this Congress to pursue a bipartisan, market-based solution to climate change, like the one John McCain and Joe Lieberman worked on together a few years ago. But if Congress won’t act soon to protect future generations, I will. I will direct my Cabinet to come up with executive actions we can take, now and in the future, to reduce pollution, prepare our communities for the consequences of climate change, and speed the transition to more sustainable sources of energy.

Clean energy continues to draw attention, while the development of economically-recoverable natural gas supplies is the latest energy revolution:

Four years ago, other countries dominated the clean energy market and the jobs that came with it. We’ve begun to change that. Last year, wind energy added nearly half of all new power capacity in America. So let’s generate even more. Solar energy gets cheaper by the year – so let’s drive costs down even further. As long as countries like China keep going all-in on clean energy, so must we.

In the meantime, the natural gas boom has led to cleaner power and greater energy independence. That’s why my Administration will keep cutting red tape and speeding up new oil and gas permits. But I also want to work with this Congress to encourage the research and technology that helps natural gas burn even cleaner and protects our air and water.

President Obama also promoted energy efficiency, from getting the transportation sector off oil to improving residential, business and industrial energy efficiency.  He proposed to create a trust funded by oil and gas leases and royalties to help fund some of these shifts:

Indeed, much of our new-found energy is drawn from lands and waters that we, the public, own together. So tonight, I propose we use some of our oil and gas revenues to fund an Energy Security Trust that will drive new research and technology to shift our cars and trucks off oil for good. If a non-partisan coalition of CEOs and retired generals and admirals can get behind this idea, then so can we. Let’s take their advice and free our families and businesses from the painful spikes in gas prices we’ve put up with for far too long. I’m also issuing a new goal for America: let’s cut in half the energy wasted by our homes and businesses over the next twenty years. The states with the best ideas to create jobs and lower energy bills by constructing more efficient buildings will receive federal support to help make it happen.

Infrastructure investment was another point, including the electric power grid and pipeline networks:

America’s energy sector is just one part of an aging infrastructure badly in need of repair. Ask any CEO where they’d rather locate and hire: a country with deteriorating roads and bridges, or one with high-speed rail and internet; high-tech schools and self-healing power grids. The CEO of Siemens America – a company that brought hundreds of new jobs to North Carolina – has said that if we upgrade our infrastructure, they’ll bring even more jobs. And I know that you want these job-creating projects in your districts. I’ve seen you all at the ribbon-cuttings.

Tonight, I propose a “Fix-It-First” program to put people to work as soon as possible on our most urgent repairs, like the nearly 70,000 structurally deficient bridges across the country. And to make sure taxpayers don’t shoulder the whole burden, I’m also proposing a Partnership to Rebuild America that attracts private capital to upgrade what our businesses need most: modern ports to move our goods; modern pipelines to withstand a storm; modern schools worthy of our children. Let’s prove that there is no better place to do business than the United States of America. And let’s start right away.

The 2013 State of the Union address suggests continued growth in U.S. sectors such as energy efficiency, alternative transportation fuels, renewable energy, and infrastructure development and maintenance.  Carbon emissions may also be examined, with a national market-based carbon cap and trade program possible such as now exists in California and the northeastern Regional Greenhouse Gas Initiative member states.  How Congress and the public react to these remarks remains to be seen, as does how and to what extent President Obama's proposed policy shifts are implemented.

Energy projects installed in May 2012

A report released this week by federal energy regulators documents the composition of additions to the U.S.'s portfolio of electricity resources.  The May 2012 Energy Infrastructure Update released by the Federal Energy Regulatory Commission's Office of Energy Projects provides a summary of newly-built and expanded electric generation facilities.  This snapshot of what happened in May 2012 illustrates trends in the electric industry, including a focus on renewable energy and natural gas in project development.

According to the report, 561 megawatts of new or expanded electric generation capacity came online in May 2012.  Of this new installed capacity, the largest share -- 228 MW -- came from wind.  Most of this new capacity comes from a single project, E.ON Climate & Renewables North America, LLC’s Magic Valley Wind Farm I in Texas.  The Magic Valley I project is comprised of 112 Vestas V100 1.8-MW turbines, for a total nameplate capacity of 202 MW.

The second-largest resource class of new generation capacity in May 2012 comes from biomass, with 166 MW of new biomass capacity installed in May.  As with wind, Texas hosts the bulk of this new  capacity.  The largest new biomass project is a 100 MW wood-fired plant built in Nacogdoches County, Texas, by Southern Company, financed in part through a long-term power purchase agreement with Austin Energy to buy the power.

Solar-powered generation provides the third-largest class of capacity newly installed in May 2012.  Eleven new projects came online in May, totaling 149 MW of new capacity.  The largest of these is Enbridge Inc.’s 50 MW Silver State North Solar Project.  This project, located in Clark County, Nevada, is the first utility-scale solar facility built on federal land managed by the Bureau of Land Management.  Its output will be sold to NV Energy under a long-term PPA.

Together, these three renewable resources -- wind, biomass, and solar -- represent 543 out of the 561 MW installed in May 2012. Other fuels like coal and natural gas played a relatively minor role in terms of new capacity installed in May.  Nevertheless, the year-to-date cumulative data shows that natural gas powers the largest share of projects installed in 2012 -- 2,811 MW out of the 6,225 MW installed so far in 2012.

Park and forest service renewable energy

Managers of national and state parks and forests are considering whether they can cut their energy bill by developing distributed generation projects.  In many cases, distributed generation such as solar photovoltaic systems can be a good match for powering facilities like park headquarters, campgrounds, and maintenance buildings.  This can be especially true for places that are off the main electric grid, such as pockets of development within preserved lands.  It can also be true for grid-tied facilities, as incentives like net metering can make rooftop solar or other projects cost-effective for the end user.

Solar photovoltaic panels power the campground at Goblin Valley State Park, Utah.

Whether developed by a national park or state forest, connecting renewable generation to the grid involves working with the local electric utility.  In many parts of the country, interconnecting with the utility can be a challenging process.  Utilities typically must study whether the proposed generation can work with the existing set of transmission and distribution wires, and may get into disputes with customers over whether and how much upgrading is needed.  Some utilities claim to be swamped with interconnection requests, and are missing deadlines for studying system impacts and cooperating with customers.

In California, a different set of difficulties is preventing millions of dollars of renewable energy projects on federal land from connecting to the grid.  In response to economic incentives favoring distributed generation, the National Park Service and U.S. Forest Service have developed major new renewable projects at a variety of sites in California.  For example, the Park Service developed an $800,000 solar project at Death Valley National Park, anticipated to cut 70% off the visitor center's annual electric bill of about $45,724.  The Forest Service developed a large solar project at its Mono Lake facilities, along with other projects at existing sites.  However, the federal agencies have been unable to sign interconnection agreements with utility Southern California Edison, meaning the parks' renewable projects remain idle despite federal policy supporting sustainable operations.

At issue is a provision of federal law that prevents agencies from signing contracts exposing them to the risk of unknown future damages because such contracts would commit money outside the congressional budgeting process.  Federal agencies have been able to work around this restriction with other utilities, as evidenced by Yosemite National Park's successful interconnection of its $5.8 million solar photovoltaic project with the Pacific Gas & Electric grid.  Southern California Edison appears to be a holdout.

Will 2012 see a continuation of the trend toward replacing diesel electric generation in parks and national forests with alternative resources?