With help from Alex Guillén
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.
— EPA’s recent proposal to limit states’ authority to block energy projects is a big win for dam owners, but is drawing bipartisan opposition from Western governors and could open up a path for legal challenges.
— The president’s speech at a Shell chemicals plant Tuesday was light on energy policy and heavy on stump speech material.
— Presidential hopeful Pete Buttigieg added his proposal to a growing stack of rural economic development plans from 2020 Democrats that also include climate provisions.
WELCOME TO WEDNESDAY! I’m your host, Kelsey Tamborrino. Duke Energy’s Michael Sewell gets the trivia win for correctly identifying former President Zachary Taylor as the president who never voted before his own election. For today: What is the reconstructed Capitol dome made out of? Send your tips, energy gossip and comments to ktamborrino@politico.com.
GOING WITH THE FLOW: Long before President Donald Trump targeted Section 401 of the Clean Water Act to rein in states’ ability to block pipeline and coal export projects, the hydropower industry was already working to do the same, Pro’s Annie Snider reports this morning.
The hydropower angle is a key reason why the bipartisan Western Governors Association has raised concerns about the proposal. The Trump administration’s proposal runs head-long into a long-running fight over who gets to decide how much water a dam operator must let spill over the top of a dam or divert around the electricity-generating turbines — an action usually taken to benefit fish and wildlife.
States began looking to the Clean Water Act provision after a 1990 Supreme Court decision rejected an argument by California that the Federal Power Act gave it the right to set “minimum flow rates” for dams. The Supreme Court has agreed that states have broad latitude to set requirements like minimum flows under the water law in an opinion that poses a major legal hurdle for the administration’s legal defense of the new rule.
About 325 hydropower projects representing 16 gigawatts of renewable power over the next 13 years are due for relicensing, according to the National Hydropower Association — and states have used the process in the past to leverage to impose strict new requirements on decades’ old dams. But legal experts say there are major questions about whether the be able to continue to do so if the proposed rule is finalized.
OFF SCRIPT: The president has never been one to always stay on script, but his remarks Tuesday at the Shell ethylene cracker plant in Pennsylvania strayed far from energy policy, POLITICO’s Caitlin Oprysko reports. Instead, Trump riffed on everything from the Academy Awards to the trade imbalance with Japan.
In his 60-plus minute speech, Trump also pressed the chairman of Royal Dutch Shell, Chad Holliday, who was in the crowd, to locate the company’s headquarters in the U.S. (“I don’t know where the hell he comes from,” Trump said, apparently unaware Holliday headed DuPont for over a decade and was chairman of Bank of America), and once again falsely claimed that when the wind stops blowing, the electricity stops. “The wind and the televisions go off. And your wives and husbands say: ‘Darling, I want to watch Donald Trump on television tonight. But the wind stopped blowing and I can’t watch. There’s no electricity in the house, darling.'”
While touring the Shell facility alongside Energy Secretary Rick Perry, Trump also suggested a new energy announcement is coming next week, though he did not elaborate. “Rick is going to be announcing a big project next week,” Trump said, according to a pool report. The Energy Department did not return a request for further information.
BUTTIGIEG’S RURAL PLAN: South Bend, Ind., Mayor Pete Buttigieg unveiled a rural economy plan Tuesday ahead of a trip to Iowa, joining a pack of Democratic presidential contenders who’ve rolled out their own in recent weeks, POLITICO’s Arren Kimbel-Sannit reports. The plan would bolster rural economic development programs and partnerships, support the development of climate change resiliency by farmers and create “community-driven broadband networks” that will function as public or quasi-public utilities in regions where private companies don’t provide connections.
Buttigieg’s plan promises $50 billion over 10 years from USDA in research and development of technology and practices that producers can use to fight or mitigate climate change, including through soil carbon sequestration, Arren writes.
Biofuels would also get a boost under the plan. Buttigieg would stop “the abuse of ‘small refinery’ exemptions” under the Renewable Fuel Standard as carried out by the Trump administration, according to the plan. It also calls for the establishment of next-generation Resilience Hubs to share climate resilience data and tools.
TAKE THE PLEDGE: Landowners, tribal nations and environmental groups urged Democratic presidential candidates in a letter to take the “NoKXL Pledge” that commits them to revoking on Day One the permit Trump issued for the Keystone XL and Dakota Access pipelines. Sen. Elizabeth Warren (D-Mass.) has already signed on, according to Bold Nebraska, which backs the pledge. Washington Gov. Jay Inslee also tweeted his support.
IN CASE YOU MISSED IT: POLITICO Playbook highlighted new research from the American Action Network, the center-right group that supports House Republican-linked policies. The group polled 30 House districts — 10 of which were Trump districts in 2016, 12 that were battlegrounds and eight suburban districts.
The research found that when the Green New Deal was described as a plan that “would work to address climate change and income inequality, and transition the United States from an economy built on fossil fuels to one driven by clean energy,” 48 percent of voters were in favor, 46 percent were opposed and 7 percent were unsure.
But when the ambitious proposal was described as potentially costing $93 trillion (Read more on that estimate), and hiking energy bills by $3,000, voter support fell to 32 percent versus 61 percent opposed.
STEYER MOVES CLOSER: The presidential campaign for billionaire environmentalist Tom Steyer said Tuesday the candidate has reached the 130,000 individual donor threshold required for the September debate. Steyer’s campaign said he “met the donor requirement within just five weeks of entering the race, averaging over 26,000 donors a week.”
The NextGen founder is now one qualifying poll away from the September debate stage. Steyer has spent more than $10 million on advertising for his presidential bid between television and digital, according to NBC News.
Bullock not buying it: Montana Gov. Steve Bullock took aim at Steyer’s announcement Tuesday. In a tweet, Bullock, who has yet to qualify for the September debate, accused Steyer of buying his way into the debate. Bullock doubled down on the claim on MSNBC, where he called DNC rules “well intentioned” but said “we’re getting to the point where we’re spending money online as opposed to actually talking to voters.”
EVERYTHING BIGGER IN TEXAS: The strain of hot weather on the Texas power grid has caused the state’s electricity prices to hit their maximum limit for the second time ever on Tuesday, Pro’s Gavin Bade reports. Real-time power prices hit Texas’ $9000-per-MW price cap for more than an hour as electricity demand climbed above 74,300 MW.
As a result, grid operator ERCOT activated its first level of Emergency Energy Alerts, requesting that Texas residents reduce power usage and calling on power plants to import power from other regional markets. Tuesday’s demand did not surpass the record set on Monday, when ERCOT demand surpassed 74,500 MW, but was helped by higher-than-expected wind power.
CHANGE IN JUDGES FOR AUTO EMISSIONS CASE: The D.C. Circuit Tuesday swapped out one of the judges slated to hear the lawsuit brought by California and other states over EPA’s spring 2018 decision to revisit Obama-era auto standards. The suit does not directly challenge the soon-to-debut SAFE Vehicles rule, but rather the underlying decision that led to it. Raymond Randolph, a senior-status judge appointed by George H.W. Bush, was scheduled to sit on the panel hearing the case on Sept. 6. But in a notice, the court said without explanation that his seat will be filled instead by Judge Sri Srinivasan, an Obama appointee. The other two panel members are the same: Judith Rogers (Clinton) and Nina Pillard (Obama).
ANOTHER ACE SUIT COMING TODAY: One day after 22 states and seven cities sued the Trump administration over its Affordable Clean Energy rule, a coalition of environmental and health groups will unveil today their own lawsuit challenging the rule. ME is told groups including the Appalachian Mountain Club; Center for Biological Diversity; Clean Air Council; Clean Wisconsin; Conservation Law Foundation; Environmental Defense Fund; Environmental Law & Policy Center; Minnesota Center for Environmental Advocacy; Natural Resources Defense Council; and the Sierra Club will file the lawsuit this morning in federal court.
— “2°C: Beyond the limit: Extreme climate change has arrived in America,” via The Washington Post.
— “John Hickenlooper mulling ending presidential bid to run for Senate,” via The New York Times.
— “Shareholders have no love for shale companies,” via The Wall Street Journal.
— “Sidelined CDC climate chief to file whistleblower complaint,” via E&E News.
— “Montana developer ready to build modern-day pumped hydro storage,” via GreenTech Media.
— “A Kremlin-linked firm invested millions in Kentucky. Were they after more than money?” via TIME.
THAT’S ALL FOR ME!
