With help from Anthony Adragna and Annie Snider
Editor’s Note: This edition of Morning Energy is published weekdays at 10 a.m. POLITICO Pro Energy subscribers hold exclusive early access to the newsletter each morning at 6 a.m. Learn more about POLITICO Pro’s comprehensive policy intelligence coverage, policy tools and services at politicopro.com.
— European countries are threatening to impose tariffs on goods from countries like the United States that have failed to match their climate change policies.
— The House overwhelmingly passed the compromise National Defense Authorization Act on Wednesday, despite lingering concerns over strong PFAS provisions.
— Newly sworn-in Energy Secretary Dan Brouillette will appear today at a meeting of the National Petroleum Council.
GOOD MORNING, IT’S THURSDAY! I’m your host, Kelsey Tamborrino. Check out the new 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.
ExxonMobil’s Jennifer Linker gets the trivia win for knowing 13 states have more than 10 representatives in the House. For today: In 1894, the first three women elected to a state legislature in the country were from what state(s)? Send your tips, energy gossip and comments to ktamborrino@politico.com.
A PAGE OUT OF THE TRUMP PROTECTIONIST PLAYBOOK: European countries worried their plans to cut greenhouse gases will put their own companies at risk are weighing imposing trade tariffs on goods from countries — like the U.S. — that lack robust climate change policies, Pro’s Zack Colman reports.
The European Union imposes a price of 25 euros (nearly $28) per metric ton of carbon dioxide emitted by industries like oil refineries and steelmakers. But since other major economies have rejected similar measures for their own companies, the EU runs the risk it will make many European companies uncompetitive, sparking calls for a “border adjustment” to put a tariff on imports based on their carbon footprint in their home country, Zack reports.
The possibility of Europe imposing carbon tariffs is still in early discussions, but President Donald Trump’s plan to pull the U.S. out of the Paris agreement has left many countries angry that the world’s second-largest greenhouse gas emitter has rejected the international effort. Former Secretary of State John Kerry told Zack it was probably inevitable that governments will turn to trade barriers as they enact laws to fight climate change. “It’s not whether it’s going to happen — it’s going to happen,” he said.
Meanwhile, in Madrid: The threat of new carbon-linked tariffs comes as negotiators at the U.N. climate conference appear deadlocked on how to create a set of rules to govern international carbon trading. On Wednesday talks to write the Paris rulebook appeared to be faltering, as a group of emerging economies led by China called for delaying action on a set of contentious issues, Zack and Kalina Oroschakoff report. It’s a tactic some delegates said threatened to derail the 2020 schedule for countries to update their climate change goals.
DataPoint: Since 1990, national, state and city governments have employed two major methods of reducing emissions through taxes, targets and trading: a carbon tax or an emissions trading system. Carbon pricing is slated to affect 20 percent of greenhouse gas emissions by 2020, Pro DataPoint’s Patterson Clark reports.
SENATE VOTES ON FWS NOMINEE: The Senate is expected to vote today on the nomination of Aurelia Skipwith to lead the U.S. Fish and Wildlife Service, filling a position that has been vacant throughout the Trump administration. Skipwith currently serves as deputy assistant secretary for Fish and Wildlife and Parks at Interior, and previously worked at agriculture supply chain firm AVC Global and at Monsanto. She cleared a procedural cloture vote by 53-41 on Wednesday.
HOUSE PASSES DEFENSE BILL: In a 377-48 vote, the House on Wednesday overwhelmingly passed a $738 billion compromise defense policy bill that would put sanctions on companies working on the NordStream 2 and Turk Stream pipelines and phase out the use of PFAS in military firefighting foam, POLITICO’s Connor O’Brien reports. The bill still must be considered by the Senate, where wide bipartisan approval is also likely.
Only 20 of the 68 members who signed onto an October letter threatening to vote against the defense bill without strong PFAS provisions followed through in the end — and those that did were among those that hail from districts with high-profile contaminations or are among the lower chamber’s most progressive members.
KEEP IT SIMPLE: Sen. Lisa Murkowski is not completely closing the door on including additional PFAS language in a spending bill for EPA — but she doesn’t seem too eager to complicate negotiations over keeping the government funded past next week. “You’ll have to wait and see,” Murkowski, who chairs the Appropriations subcommittee responsible for EPA, told ME when asked about the eleventh-hour push from some PFAS advocates to use the spending legislation as a vehicle for provisions that didn’t make it into this year’s NDAA. “I think there’s a desire to try to keep things as simple as they can at this point in time,” said Murkowski, whose state of Alaska has communities dealing with PFAS contamination. “At the end of the day, I think we all want a product. I don’t want a CR.”
BLM RESPONDS TO GRIJALVA: Amid House Natural Resources Chairman Raúl Grijalva‘s vow to move ahead with subpoenas in January over BLM’s relocation out west, the agency says it has provided “70 documents and over 2,500 pages of material responsive” to the committee’s oversight requests. “The BLM relocation is moving ahead and we have cooperated with Congress at all points,” spokesperson Derrick Henry said. “Also, Secretary Bernhardt has offered to have regular meetings with the Committee Chairs on this issue, an offer that is still awaiting a response.” BLM will continue its “rolling production” of documents to the committee “as we are able.”
Today is the deadline for most of hundreds of employees impacted to decide whether to follow the agency to Colorado, though Henry said “it will take time to have an accurate count” of how many will do so. “While we hope all affected employees will be able to follow their positions to the new locations, we understand that the decision for most people has many factors,” Henry said.
BROUILLETTE TO SPEAK AT PETROLEUM COUNCIL MEETING: Brouillette, who was sworn in at the White House on Wednesday, is expected to speak today about the Trump administration’s efforts to ensure reliable energy delivery and infrastructure development at a meeting of the National Petroleum Council, a federal advisory committee with former and current industry heads that advise the Energy Department. He’s also slated to talk about “the importance of making our traditional energy sources cleaner through carbon capture, utilization, and storage,” DOE said. Watch the webcast.
The NPC will also consider two proposed final reports — one looking at U.S. oil and natural gas transportation infrastructure and the other at at-scale deployment of carbon capture, use and storage — that were requested by former Secretary Rick Perry.
AHEAD OF IMO IMPLEMENTATION: EPA on Wednesday made a regulatory change to help refiners with implementation of the International Maritime Organization’s new global sulfur standard to reduce sulfur emissions from shipping fuel, which is set to take effect Jan. 1, 2020. The amendments are to “ensure that U.S. refiners can permissibly distribute distillate marine fuel up to the 5,000 ppm sulfur limit, which will facilitate smooth implementation of the 2020 global marine fuel standard.”
ALASKA LEASE SALE GARNERS $11M: The Interior Department’s oil and gas lease sale for the National Petroleum Reserve-Alaska on Wednesday generated $11 million for leases covering over a million acres, Pro’s Ben Lefebvre reports. Three companies bid, but the vast majority of the acres went to North Slope Exploration LLC, a company that was incorporated in late November and run by Texas wildcatter Bill Armstrong. North Slope and other companies paid an average of $11 per acre, more than the $9 per acre they paid in 2018 but well below the $30 per acre paid in a 2016 lease sale.
NEXT STEPS IN CALIFORNIA CAP-AND-TRADE SUIT: The Trump administration argued in its lawsuit seeking to end California’s greenhouse gas cap-and-trade program with Quebec that the agreement violates constitutional prohibitions on states entering into treaties with foreign powers. The state has not yet responded to the federal government’s initial complaint, but in a motion filed with the U.S. District Court for Eastern California on Wednesday, the Trump administration asked the court for a hearing as early as Jan. 13, Pro’s Alex Guillén reports.
— Oklahoma oil tycoon and Trump supporter Harold Hamm will step down as CEO of Continental Resources, the company announced Wednesday. Hamm will become executive chairman while board member William Berry will become CEO on Jan. 1. President Jack Stark will assume the role of COO.
— Stacey Kerans joined the American Wind Energy Association as senior director of communications. Kerans previously was senior vice president of corporate communications and consumer marketing at FleishmanHillard and senior vice president of brand marketing at Ketchum.
— “How Greta Thunberg is using her fame to pressure world leaders to act on climate,” via The Washington Post.
— “Saudi Aramco shares surge past expectations in debut, hitting 10 percent daily limit,” via Market Watch.
— “Koch-backed groups target Bernie Sanders’ GND support,” via Iowa Starting Line.
— “WWF has suspended support for rangers at Africa’s largest nature reserve after a suspicious death,” via BuzzFeed News.
— “Nearly $226M to restore open Gulf after 2010 BP oil spill,” via Associated Press.
— “Dominion Energy turns to cow manure in gas pact,” via The Wall Street Journal.
THAT’S ALL FOR ME!
