Biofuel, refiner backers seek deal at White House

Presented by Williams

With help from Emily Holden, Alex Guillén, Eric Wolff, Ben Lefebvre and Sara Stefanini

LET’S MAKE A DEAL? The White House is hoping it can get out of a bind between its oil industry supporters and it’s agricultural supporters by bringing representatives for the two groups together today for a preliminary meeting on a grand bargain for the Renewable Fuel Standard, Pro’s Eric Wolff reports. Refiners, with some backing from unions, say they’re drowning under heavy RFS compliance costs, and the biofuel industry insists it needs the mandates in the RFS to keep expanding and to grow advanced biofuels.

Who’s attending? Aides from the pro-ethanol Sens. Chuck Grassley, Joni Ernst and Deb Fischer will be there for the corn-state contingent, while staffers for Sens. Ted Cruz and Pat Toomey will make the case for refiners. Staff from EPA, the Department of Agriculture and the National Economic Council will also join.

What about Congress? Sen. Jim Inhofe declined Tuesday to offer any details on the plan he and Sen. John Cornyn are working on to address the issue, but said it would have to address the exploding cost of buying biofuel credits that EPA uses to ensure refiners are blending the required amounts of biofuel into the nation’s fuel supply. “The RIN values are a huge consideration because you’re talking about millions and millions. And it wasn’t meant to be that way. Anytime you have a value system that jumps around from eight cents to 800 dollars, that shows it’s a broken system,” Inhofe said.

Important context: Senators like Grassley are desperate to get Bill Northey, the nominee to be USDA undersecretary for farm production and conservation, confirmed since he’ll play a crucial role in crafting the farm bill that lawmakers are three months behind schedule in drafting, Pro Agriculture’s Catherine Boudreau reports. Cruz, who was upbeat after last week’s meeting but declined comment on Northey, placed a hold on his selection recently after corn-state Republicans extracted concessions from EPA on the RFS.

Can there be a bargain, grand or petite? Ethanol producers have been deeply skeptical of any kind of deal to be made with the oil industry, which they feel wants to squeeze them out of the fuels market if at all possible. But it’s not even clear what parameters there are for a deal. University of Illinois economist Scott Irwin said on Twitter, the mandates in the RFS drive up RIN costs. You can’t push down RIN costs without undermining the mandates. “There is no ‘win-win’ on the RFS concerning mandates and RINs,” he wrote in a thread. “Lower RINs prices go with lower mandates and vice versa. Straightforward economics.”

WELCOME TO WEDNESDAY! I’m your host Anthony Adragna, and API’s Khary Cauthen was first to identify Erskine Bowles as the former White House chief of staff who lost consecutive Senate bids in North Carolina. For today: Sens. Bernie Sanders, Angus King and Joe Lieberman are well-known third-party senators. Who was the last independent senator to serve before them? Send your tips, energy gossip and comments to [email protected], or follow us on Twitter @AnthonyAdragna, @Morning_Energy and @POLITICOPro.

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NO MOORE: Sen.-elect Doug Jones shocked the political world by winning the Senate election in ruby-red Alabama on Tuesday evening, but it’s worth pointing out he ran on a pretty progressive platform on environmental and climate change issues. His website says he “believe[s] in science” and opposed Trump’s decision to leave the Paris accord. One thing to watch now is the committee shuffle: outgoing Sen. Luther Strange will vacate a spot on the Energy Committee (so some other Republican will get it).

HERE’S LOOKING AT YOU, PRUITT: EPA revealed Tuesday night that Administrator Scott Pruitt has been in Morocco this week promoting “the potential benefit of liquefied natural gas imports on Morocco’s economy,” as well as U.S.-Moroccan environmental cooperation. Pruitt’s visit included a meeting with Morocco’s energy minister to “discuss new and ongoing areas of collaboration under the Free Trade Agreement and the country’s interest in importing LNG,” according to EPA. The agency said he also met with top foreign affairs and justice officials. Morocco produces little natural gas and relies heavily on imports, although it also plans a major expansion of solar and wind power, according to the Energy Information Administration.

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ROUNDUP FROM PARIS: The private sector took the center stage at the One Planet Summit in Paris Tuesday to show what they’re willing and able to close the €179.6 billion ($210.9 billion) a year gap between the investment needed to fulfill the goals of the Paris climate agreement and what’s foreseen in policies adopted so far. POLITICO Europe’s Sara Stefanini with the roundup and here’s a sampling of the goings on:

— Moving on from Trump: Six months after Trump announced he wanted to leave the Paris agreement, the world is going ahead without him. “If we’re here, so many of us today, it’s because we’ve decided not to accept America’s decision,” French President Emmanuel Macron said in a speech. Former U.S. Secretary of State John Kerry agreed when asked if non-state actors can make up for a lack of federal leadership: “It is possible, yes,” he told reporters.

— Carbon pricing in the Americas: Canada, Chile, Colombia, Costa Rica, Mexico, the governors of California and Washington and the premiers of Alberta, British Columbia, Nova Scotia, Ontario and Quebec launched a cooperative framework on carbon pricing.

— ING ditches coal: Dutch bank ING said that by the end of 2025 it will quit financing utilities that are over 5 percent reliant on coal-fired power in their energy mix. The bank already does not finance companies that are over 10 percent reliant on coal — up from ING’s pre-Paris threshold of 50 percent. Greenpeace applauded the latest announcement.

YOU CAN’T DO THAT! Democrats vowed to keep a watchful eye after GAO found the Trump administration illegally withheld $91 million budgeted for the Advanced Research Projects Agency-Energy program earlier this year, your ME host reports. Top Senate Energy Democrat Maria Cantwell said in a statement: “The President cannot ignore statutory requirements or funding direction provided by Congress. I expect nothing less than Secretary [Rick] Perry’s full compliance with the law.” DOE ultimately relented and released all the funds.

INTERIOR STAFF SHUFFLE INVITES LAWSUIT: Interior Department employee Matt Allen has filed a FOIA lawsuit in an effort to determine why he and other senior employees were suddenly transferred earlier this year. Interior’s Inspector General’s office is already investigating Interior Secretary Ryan Zinke’s plans to shuffle dozens of Senior Executive Service employees, and another now-former employee filed a complaint with the Office of Special Counsel and a lawsuit after being reassigned. Allen, who became a BLM spokesman in the waning days of the Obama administration, was reassigned to a public affairs position at BSEE in September. “My client’s demotion reeks of reprisal, and these documents will provide us the tools we require to prove that,” plaintiff’s lawyer Katherine Atkinson said in a press release. An Interior spokesperson was not immediately available to comment.

NOT GIVING UP: Senate EPW Chairman John Barrasso told ME Tuesday he’s not giving up on Michael Dourson’s nomination to run EPA’s chemicals office even as Republican defections have put a damper on his confirmation prospects. “It’s a question of how Sen. McConnell chooses to prioritize them,” the Wyoming Republican said, downplaying the challenges facing Dourson, a former industry-funded toxicologist.

CURTAINS FOR GARRETT? Former New Jersey Rep. Scott Garrett, Trump’s pick to run the Export-Import Bank, is likely to have his nomination blocked after Sen. Mike Rounds came out against his selection on Tuesday, Pro Financial Services’ Zachary Warmbrodt reports. “I believe him to be a proponent of the abolition of the bank rather than a reformer of the bank,” Rounds said. “I’m looking for reformers, not abolitionists.” Garrett’s selection has been roundly criticized by the business community. The Senate Banking Committee has 12 Republicans and 11 Democrats, so Rounds’ defection would sink the selection in committee.

MURKOWSKI UPBEAT ON ANWR’S PROSPECTS: Senate Energy Chairman Lisa Murkowski told ME Tuesday she’s optimistic language opening ANWR to oil and gas drilling will make it into the final Republican tax package H.R. 1 (115), even though a dozen of her House colleagues oppose its inclusion. “I’m feeling pretty good about where we are with ANWR right now,” she said. “We just need to make sure that we’re able to come together as conferees and get a package that both bodies can support.”

Speaking of which, Conservation Voters of Pennsylvania and PennFuture are running a full page ad in the Philadelphia Inquirer today urging Republican Reps. Pat Meehan, Ryan Costello and Brian Fitzpatrick to vote against any final tax package that contains ANWR drilling. You’ll remember they were three of the 12 House Republicans who said in the letter they opposed opening the Arctic area to oil and gas drilling.

Murkowski also said she wasn’t ready to weigh in on whether Zinke’s use of helicopters to attend Washington area events, like a horseback ride with Vice President Mike Pence, was appropriate until she got more information. “I think we all recognize that there is a responsibility that we have as lawmakers, when you’re using the taxpayer dollar, that you do so in a responsible way and something that’s not wasteful,” she said. “But I also understand that there are sometimes requirements of the job that require you to perhaps take a different mode of transportation.”

And she told your ME host she hadn’t been following the ongoing battle between Patagonia and Zinke, but that she too had been irked by the outdoor clothing giant’s advocacy for barring drilling in ANWR last year. “Last Christmas, I actually looked at the Patagonia catalog that came to my house,” Murkowski said. “I didn’t think they were marketing their outdoor clothing. It was a full on effort to build support for turning ANWR into wilderness … It was enough to get me, as a consumer, riled up enough to say ‘I’m not buying Patagonia products.’”

UNUSUAL MOVE IN VIRGINIA: A state panel granted the Atlantic Coast pipeline’s water quality permits, but took the unusual step of delaying their effective date until soil and erosion control plans and stormwater management plans are finished, the Associated Press reports. “While this is most definitely not what Dominion wanted and gives opponents of the pipeline more time to push for rejection, the [Virginia State Water Control Board] should have rejected the certificate outright,” Lorne Stockman with Oil Change International said in a statement.

SOLAR FOR SAMARITANS: EPA says it’s partnering with the non-governmental organizations in Puerto Rico to provide generators or solar panels to run drinking water pumps and wells that supply water to 3 percent of the population and are not managed by the island’s government. EPA and other U.S. and Puerto Rican agencies are working with Water Mission, Samaritan’s Purse, Project Hope and RCAP Solutions. Solar panels have been installed in four communities and will be provided to four more before Christmas, EPA said in a press release.

More than two months after Hurricane Maria hit, about 43 percent of island residents didn’t have power and 17 percent didn’t have drinkable water, according to statistics issued on November 20 by the U.S. territory’s government. The Natural Resources Defense Council finds that, according to government test results, more than two-thirds of the population was at potential risk of exposure to bacterial contamination in water systems.

MAIL CALL! SICK OF THOSE TALKING POINTS: The EPW Democrats asked Kathleen Hartnett White, nominee to lead the White House Council on Environmental Quality, to redo her responses to questions for the record after they contained identical language as previous nominees. Link here.

DON’T DO IT! The Environmental Working Group is urging Toyota in a letter not to enter into a management partnership with EPA as Pruitt suggested the automaker was going to do at a congressional hearing last week. “By partnering with Mr. Pruitt’s EPA, you are aiding and publicly aligning yourself with his irresponsible agenda,” EWG President Ken Cook wrote, warning Toyota it risked “irreparable harm” to its brand by pairing with Pruitt.

LEARNING FROM THE DRUG COMPANIES? The Hamilton Project at Brookings is out with a report today arguing energy research and development could be improved by implementing some practices from the pharmaceutical industry. Those include: Creating a strong system of contract research, implementing consistent technical standards and offering better incentives for electric utilities to deploy and test new technologies. Link here.

TAKE A GLANCE! Texans for Natural Gas is out with an analysis this morning finding that even as exports of natural gas have increased dramatically, prices have fallen. That goes against the previous predictions of the Energy Information Administration, which warned more exports would cause price spikes.

SPOTTED: Energy Secretary Rick Perry receiving the Ronald Reagan Award from the Texas Public Policy Foundation on Tuesday night. Pics here ... Zinke and his wife, Lola, walking through the White House’s Christmas decorations. Pic here.

LIGHTER CLICK: NRDC trustee Robert Redford made a video asking people to urge Congress to vote against the final tax package because of the provision opening ANWR to drilling. Watch here.

QUICK HITS

— JEA wants out of struggling nuclear power deal, disputes negative credit report. Jacksonville.com.

— Former Republican EPA chiefs blast controversial Alaska mining project. The Hill.

— State panel urges temporary shutdown of Mackinac pipeline. AP.

— National Park Service slashes number of free-access days from 10 to four in 2018. Denver Post.

— Trump’s Stand-In Bureaucrats May Have Overstayed Limits. Bloomberg.

— Top Interior Official Stayed At Montana Resort That Secretary Zinke’s Billionaire Friend And Donor Owns. Huffington Post.

THAT’S ALL FOR ME!