With help from Ben Lefebvre, Eric Wolff, Anthony Adragna, Annie Snider and Kelsey Tamborrino.
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— Colonial Pipeline was only the tip of the iceberg, with another major cyber attack launched against U.S. operations this week — a trend cybersecurity experts don’t expect to stop anytime soon.
— Two of Biden’s top climate hands are in fossil fuel country today with Energy Secretary Jennifer Granholm in West Virginia and EPA Administrator Michael Regan in North Dakota.
— Four major Interior and Energy nominees get their hearings next week, including Tracy Stone-Manning, Biden’s pick to lead the Bureau of Land Management.
HAPPY THURSDAY I’m your host, Matthew Choi. Congrats to NRDC’s Joan Matthews for knowing “Ida” was the most recent Polish movie to win Best Foreign Language Film. For today’s trivia: What is the largest (by area) state in Brazil? Send your tips and trivia answers to [email protected]. Find me on Twitter @matthewchoi2018.
Check out the POLITICO Energy podcast — all the energy and environmental politics and policy news you need to start your day, in just five minutes. Listen and subscribe for free at politico.com/energy-podcast. On today’s episode: Why Sen. Ossoff is leaning on climate.
TAKEN FOR RANSOM: It’s been nearly a month since the Colonial Pipeline suffered a ransomware attack leading to a run on the gas stations, but it’s hardly the only cyber incident. In the past week alone, food giant JBS’ U.S. operations and the ferry service to Nantucket and Martha’s Vineyard have also experienced cyber attacks.
Cybersecurity experts have little reason to believe the attacks will ebb any time soon. There are oodles of attractive U.S. targets for ransomware hackers, with higher stakes, deeper pockets and limited oversight in the private sector leading many victims to be more willing to pay off the attackers.
Continued disruptions to the supply chain can put President Joe Biden in a serious bind as he works toward an economic rebirth following over a year of Covid stagnation. But in taking stock of the Colonial attack, the damage may not be as bad as it immediately appeared. Gasoline prices remain higher than they were before the attack, but that could just be a symptom of an economy awakening from the pandemic and a country restless to get back to vacationing. And fuel price increases in the Gulf Coast region were in step with those in Colonial’s sphere of influence during the outage.
Pro’s Sam Sabin, Ryan McCrimmon and Ben Lefebvre — reporting from our cyber, ag and energy teams — take a look at the threat ransomware continues to pose.
SEEING FOSSIL FUEL COUNTRY: Energy Secretary Jennifer Granholm is off to West Virginia today, where she’ll meet with Senate Energy Chair Joe Manchin to tout the American Jobs Plan and talk about clean energy investments in the state. Granholm will be in the state through Friday and tour facilities in Morgantown and Harrison County.
Meanwhile, a group of West Virginia elected officials, businesses and organizations wrote to Manchin on Wednesday to urge him to support legislation that would help the state transition to clean energy — specifically, by securing pensions and other benefits for fossil fuel and displaced workers, protecting low income and communities of color from bearing disproportionate costs and backing “ambitious legislation” to hit UN emissions reduction goals.
EPA’S MICHAEL REGAN is traveling to Bismarck, N.D. today for a listening session with agriculture, business and energy leaders, plus Gov. Doug Burgum and the state’s congressional delegation. Regan will also go on a tour of EPA-supported brownfields cleanup sites in Mandan and sit down with environmental groups. He also plans to meet with tribal leaders on Friday.
LIVE STREAM MEETING: The Biden administration remains in talks with the German government about the Nord Stream 2 natural gas pipeline, according to a readout from the State Department Wednesday. The controversial Russia-to-Germany gas pipeline came up in discussions, “including U.S. concerns about the risks it poses to Ukraine and European energy security,” according to the readout.
A source close to the administration told ME that the Biden administration was likely pushing the Germans to offer help to Ukraine in the event the pipeline starts operations. The Biden administration has received criticism from all sides for its decision to forgo sanctions on the Gazprom subsidiary in charge of Nord Stream 2 and its executives. Sen. Jim Risch (R-Idaho) and Rep. Michael McCaul (R-Texas), ranking members of the foreign relations committees in the Senate and House, have asked State to explain its reasoning behind the omissions by Tuesday.
HITTING THE GROUND: The Department of Health and Human Services announced Wednesday that it is officially launching the new Low-Income Household Water Assistance Program created by Congress in December, making an initial $166.6 million in available Covid-19 pandemic shone a light on the long-running problem of making water affordable for low-income families, and Congress pushed $1.1 billion into the new program, but worries have quietly arisen that standing up the new program at HHS was taking too long. Lawmakers in the House and Senate are now contemplating separate, new programs at EPA to address the issue as part of water infrastructure legislation.
RINSANITY: The price of RIN credits are higher than at any time during the history of the Renewable Fuel Standard due to rising demand for the agricultural feedstocks used to produce corn ethanol and biomass-based diesel fuels, according to an update from the Energy Information Administration. On May 18, corn fuel ethanol D6 RIN prices reached $1.90 per gallon and biomass-based diesel D4 RIN prices reached $2 per gallon — both all-time high daily prices under the program — according to EIA.
As of Friday, corn fuel ethanol D6 RIN prices have both shot up by by 129 percent since the beginning of the year, while biomass-based diesel D4 RIN prices have increased 96 percent. EIA primarily attributed the increased prices to higher costs for corn and soybean oil, which are on the rise amid increased demand from China and concerns about future domestic supply, the agency said.
CHATTERJEE LOOKING FOR HIS NEXT GIG: FERC Chair Neil Chatterjee, whose term technically ends June 30, has recused himself from 13 FERC orders in May and June. While Chatterjee can stay until the end of the year or until a successor is confirmed, commissioners on their way out typically decline to participate in orders on issues that could be relevant to potential future employers to avoid ethics entanglements. “I’m talking to a number of people and just want to be cautious and follow the rules,” Chatterjee told ME.
Chatterjee recused himself from orders involving such a diverse set of companies that ME feels like we’re following his job hunt in real time. In the last month, he held himself back from several orders involving the California Independent System Operator and California utilities, ISO New England, an energy storage order involving the Midcontinent Independent System Operator, an order with Excel Energy, and an order involving Southern Star Central Pipeline, which is headquartered in Chatterjee’s home state of Kentucky (though he lives in the D.C. area now).
FORMER COMMISSIONERS: EXPAND THE MARKETS! Nine former FERC commissioners, including Republican former Chair Pat Wood and Democratic Former Chair Jon Wellinghoff, want FERC to aggressively use its powers to pull the whole country into electric markets.
Most of the country’s population is served by one of the market operators, but much of the West and Southeast instead get power from traditional utilities that own their generation. The former commissioners want FERC to “use the broad authorities and tools available under the Federal Power Act to move toward well-structured organized power markets in all regions of the country,” they write in a Wednesday letter.
Not all former commissioners: Former Commissioner Bernie McNamee, a Republican who served during the Trump administration, disagreed with the letter. “The recent blackouts in Texas and California have demonstrated that the RTO experiment needs to be reconsidered—we don’t need to export their failures to other parts of the country,” told ME in an email. “Traditional rate regulated utilities with their direct obligation to serve customers and oversight by state public utility commissions may offer the best path for providing customers with reliable, affordable and clean energy.”
PJM CAPACITY AUCTION PRICE CRASH: Generators will get $50 per megawatt of capacity, on average for 2022-2023, in the 13-state PJM Interconnection, down two thirds from the previous auction, the grid operator reported on Wednesday. Incumbent power plants, primarily coal and natural gas, rely heavily on those payments to stay afloat, and prices for the auction held last month represent a severe blow to their bottom lines.
PJM remains dominated by natural gas, which operates the vast majority of the 144,000 megawatts that cleared the auction. Solar tripled its presence to 1,500 MW and the 1,700 MW of wind represented a 22 percent increase.
The auction itself was much delayed due to a lengthy back and forth between PJM and FERC over the Minimum Offer Price Rule, a process likely to repeat itself now as the commission and RTOs are poised to repeal their implementations of the rule. For generators, the low results suggest that fears of the MOPR’s impact on prices were overblown. “There is no urgency to rush additional reform following the implementation of the MOPR,” Todd Snitchler, CEO of the Electric Power Supply Association, which represents merchant generators, said in a statement.
MARK YOUR CALENDARS! Four significant Interior and Energy nominees get their confirmation hearings Tuesday before the Senate Energy Committee, according to a notice posted Wednesday. Most notable among them is Tracy Stone-Manning, Biden’s pick to lead the Bureau of Land Management. Also up are Andrew Light, a former senior State Department official to be DOE assistant secretary; Shalanda Baker to be director of DOE’s Office of Minority Economic Impact and Samuel Walsh to be DOE general counsel.
ON THE BORDER: A group of Republican senators, including Lisa Murkowski of Alaska, Mike Braun of Indiana, Mitt Romney of Utah and
NUCLEAR COMES TO COAL COUNTRY: Wyoming, the top coal state, will host an advanced nuclear reactor at the site of a retiring coal plant, state officials announced Wednesday. It’ll be the second advanced reactor planned in the country and the first nuclear power plant in Wyoming, and it comes as older plants face rising costs and mounting pressures to shutter. The project will receive funds from the Department of Energy and the state government, with Bill Gates’-backed TerraPower, DOE, the state and the Warren Buffett-owned utility PacifiCorp collaborating on the new facility.
The announcement garnered bipartisan praise from Sen. John Barrasso (R-Wyo.) and Granholm: “Wyoming is the energy capital of America,” Barrasso said at the announcement. “We have all the energy sources here, everything, oil, gas, coal and renewables. And of course, uranium for nuclear power.” More from Eric Wolff for Pros.
THE THIRD SEAT: Activist investor Engine No. 1 appears to have secured a third seat on Exxon Mobil’s board, a week after two of the group’s candidates snagged seats at the company’s annual shareholders meeting during a dramatic day for the fossil fuels industry. Initial counts show private-equity investor Alexander Karsner taking the seat Wednesday, though results still need to be certified, Bloomberg reports
Related: Judge sends Connecticut suit against Exxon Mobil back to state court, from Pro’s Alex Guillén.
YOU’VE GOT POTENTIAL: The U.S. has the potential to rapidly deploy clean energy, modernize the grid, reduce and manage energy use, and repower everything with renewables, according to a new report this morning from Environment America Research and Policy Center and Frontier Group. U.S. solar energy resources have the technical potential to produce electricity each year that is equivalent to 78 times U.S. electricity use in 2020, the report found, while U.S. onshore and offshore wind resources could produce the equivalent of 11 times U.S. electricity use last year.
All 50 states have either the wind or solar technical potential to power that state’s current electricity use at least once over, the report said, and every single state other than Connecticut would also have either enough wind or solar technical potential to provide all of its electricity needs, if transportation, buildings and other applications were to run on electricity.
CROSSING THE POND: The European Commission is partnering with Gates’ Breakthrough Energy Catalyst to finance climate technology development as the continent aims to reach net-zero emissions by 2050. The partnership plans to tap into $1 billion from 2022-2026 in new investments for projects centered in green hydrogen, sustainable aviation fuels, direct air capture and long-duration energy storage — technologies currently too expensive to scale up, but with documented potential to cut emissions.
FAIR SHARES: Some of the smallest oil and gas producers are responsible for some of the most intense greenhouse gas emissions, often buying off heavily emitting assets from larger companies, according to a recent study by Ceres and the Clean Air Task Force. The study uses greenhouse gas emissions data reported to EPA and compares nearly 300 U.S. companies. The New York Times discussed some of the biggest takeaways.
— “Former Shell President Passes Away,” via Rigzone
— “Iranian Navy ships could reach the Atlantic by Thursday,” via POLITICO.
— “NC Senate Republicans act to deny Cooper environmental appointee’s confirmation, a first,” via The News and Observer.
— “Wall Street’s Favorite Climate Solution Is Mired in Disagreements,” via Bloomberg.
— “EU official sees Iran nuclear deal at next round of talks,” via Reuters.
— “Oil’s Sunset Years Could Be Profitable for Some,” via The Wall Street Journal.
THAT’S ALL FOR ME!
