With help from Eric Wolff
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— A federal appellate court ruled Friday that EPA exceeded its authority when it granted exemptions from the Renewable Fuel Standard for three small refineries.
— The RFS is coming up on the campaign trail, as Democrats try to pitch their support of the federal program that’s become crucial to corn farmers.
— California Rep. Jared Huffman spoke to POLITICO about the House’s approach to climate change, including Republicans’ stance and the likelihood of a single omnibus climate bill.
WELCOME TO MONDAY! I’m your host, Kelsey Tamborrino. 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.
Ryan Serote of Meguire Whitney gets the win for knowing five presidents were not elected to public office before becoming president: Zachary Taylor, Ulysses S. Grant, Herbert Hoover, Dwight D. Eisenhower and Donald Trump. For today: How many former presidents served in Cabinet positions immediately before becoming president? Send your tips, energy gossip and comments to ktamborrino@politico.com.
REFINERY RECKONING: A federal court late Friday ruled that EPA exceeded its authority in exempting three oil refineries from the Renewable Fuel Standard — a potentially far-reaching decision that may force the Trump administration to reevaluate its expanded use of the exemptions, as Pro’s Eric Wolff reports. The 10th Circuit U.S. Court of Appeals ruled EPA could only extend exemptions granted to a handful of refineries in 2011, but not create new ones. And the court faulted EPA for considering factors beyond the RFS in determining refineries deserve the exemptions on “economic hardship” grounds. EPA has issued 85 exemptions from the biofuels mandate since President Donald Trump took office, and another 21 applications for new waivers are pending at the agency.
The decision Friday applied to three refineries, two owned by HollyFrontier and one owned by Carl Icahn’s CVR Refining, but its conclusions likely will fuel challenges to other exemptions. Joe Kakesh, general counsel for Growth Energy, which was not a part of the case but has a similar case in the D.C. Circuit, told ME the case “shows many of the SREs are invalid.” The Fueling American Jobs Coalition, which is backed by refiners and gas station owners, downplayed the ruling in a statement, saying, “Any actual implications are a ways off.”
ON THE CAMPAIGN TRAIL: Even before Friday’s ruling, the Trump administration’s handling of the RFS was providing fodder for Democrats campaigning in Iowa, Eric reports this morning.
Nearly all the Democratic candidates have been vocal in their support for ethanol as they’ve blasted the Trump administration’s use of the small refinery exemptions. Three Democratic candidates — Sen. Amy Klobuchar of Minnesota, former South Bend, Ind., Mayor Pete Buttigieg and billionaire investor Tom Steyer — have used national air time during debates to criticize the Trump EPA’s use of those waivers.
Biofuel advocates say that’s a big change from 2016 when the Democratic front-runners would hardly mention ethanol. “They wouldn’t talk about corn-based ethanol, they would talk about advanced biofuels,” said Delayne Johnson, CEO of Quad County Corn Processors, an Iowa ethanol producer. Democrats this cycle, he added, “understand it’s critical to swing states here in the Midwest. It will either allow Trump to be reelected or allow Democrats to swing these states in their direction.”
But the support has also irked green activists, who see the Democrats’ ethanol support as undermining the candidates’ promises to take aggressive action on climate. Greens have criticized the ethanol program, arguing it contributes to climate change, threatens wildlife habitats and pollutes water. “You cannot be both a champion on climate and unequivocal cheerleader for ethanol,” said David DeGennaro, climate and biofuel policy expert at the National Wildlife Federation. “We need our leaders to be serious about addressing climate change and move on from the ethanol mandate.”
ONE-ON-ONE WITH JARED HUFFMAN: Jared Huffman, a senior member of the Natural Resources and Climate Crisis committees, acknowledged in an interview with Pro’s Anthony Adragna that his fellow Democrats are “not on the same page” on how aggressively to combat climate change, but said Congress should pass whatever consensus measures it can as soon as possible rather than wait for a single omnibus climate bill. Some takeaways from that interview:
On an omnibus climate bill: “If the goal is to have one, massive, omnibus climate solution bill, I’m not sure that comes together quickly — even under a new administration with both houses in Democratic hands. I think there are pieces of it that can. And I’m not sure we should wait for the kitchen sink bill to fully materialize.”
On Republicans’ shifting climate stance: “Inevitably [their solution] comes down to new ways to extract more fossil fuel and sell fracked gas. When they do these things, they’re actually talking about making the climate problem worse, not better. We just have to be real about that because we don’t have time for fake solutions. And I’m not ready to pat them on the back for evolving when I see them making the climate crisis worse.”
NRDC ACTION ENDORSES MARKEY: NRDC Action Fund, the political arm of the Natural Resources Defense Council, endorsed Sen. Ed Markey (D-Mass.) in his Senate reelection race on Friday. The Green New Deal co-author “has the deep knowledge, skills and leadership we need to fight for bold climate action in the next Congress,” said Executive Director Kevin Curtis in a statement. Markey has already garnered support from several environmental groups, including the Sierra Club, Environment America and the LCV Action Fund.
TRUMP TALKS ENERGY IN PRIVATE DINNER AUDIO: Audio of a private dinner that emerged this weekend gave a glimpse into the president’s discussions on energy policy. The recording of the April 30, 2018 dinner was released Saturday by a lawyer for Lev Parnas, an indicted associate of Trump’s personal lawyer Rudy Giuliani. In the audio, the president calls for the summary dismissal of then-U.S. ambassador to Ukraine Marie Yovanovitch, POLITICO’s Kyle Cheney reports.
But the guests also discuss energy issues, including OPEC, oil prices, the Nord Stream 2 pipeline and weakening Europe’s dependence on Russian energy. One of the guests also pitched to Trump to create incentives for automakers to build compressed natural gas cars. (Though Trump was more interested in talking about the problems of electric vehicles and Tesla’s stock price.)
While it’s unclear if the recording will become relevant to Trump’s impeachment trial, Ukraine is brought up in a conversation on energy markets, with a voice appearing to be Parnas claiming “we’re in the process of purchasing an energy company in Ukraine right now.”
EPA SCIENTISTS DIAL BACK CO-BENEFITS TALK: EPA’s Science Advisory Board agreed to drop discussion of co-benefits and soften a section on direct benefits from its review of the agency’s upcoming mercury rule for power plants, Pro’s Alex Guillén reports. A draft report released in December had included discussion of the role of particulate matter as the primary source of quantified benefits, as well as a section highlighting research that calculated the Obama-era rule has direct benefits of tens of billions of dollars.
But the advisers on Friday decided to back off on both issues. For co-benefits, members agreed that they would only review how EPA calculated co-benefits in a rulemaking, not whether the agency should do so. The scientists also agreed to omit from its report some studies that placed big direct benefits on regulating mercury from power plants as high as $43 billion.
Scientists criticize new WOTUS rule: The SAB also blasted the Trump administration’s rollback of the Clean Water Act in a letter over the new rule’s scientific underpinnings, Pro’s Annie Snider reports. “The SAB finds that the proposed revised definition of WOTUS … decreases protection for our Nation’s waters and does not provide a scientific basis in support of its consistency with the objective of restoring and maintaining ‘the chemical, physical and biological integrity’ of these waters,” the letter states.
MORE TIME NEEDED: More than 300 environmental groups will send a request today to extend the comment period for the Trump administration’s rulemaking scaling down environmental reviews under the National Environmental Policy Act. In a letter to the Council on Environmental Quality, the groups request an 180-day extension given how the proposal “could fundamentally change how every single agency in the federal government considers the health and environmental impacts of federal decisions.” Currently, the rulemaking has a 60-day comment period and two public hearings in February — which the groups also call “severely inadequate.”
LOUISE LINTON STANDS WITH GRETA: Actress Louise Linton on Saturday appeared to publicly break with her husband, Treasury Secretary Steve Mnuchin, over Greta Thunberg’s climate activism in a since-deleted Instagram post. Linton wrote: “I stand with Greta on this issue. (I don’t have a degree in economics either),” following Mnuchin’s comments last week that Thunberg should study economics before calling on governments to end their support of fossil fuels. Linton also urged Thunberg to “keep up the fight” in the post, adding “we need to drastically reduce our use of fossil fuels.”
— U.S. Energy Storage Association added Marc Chupka as vice president of research and programs. Chupka most recently was a principal at The Brattle Group, and previously was acting assistant secretary of energy for policy and international affairs at the Energy Department and chief economist at the White House Office of Environmental Policy.
— “Deadly Gessner explosion the latest in string of major chemical incidents for Houston area,” via Houston Chronicle.
— “Facing denial, Jordan Cove LNG project withdraws application for key state permit,” via The Oregonian.
— “Australia bush fires have nearly doubled country’s annual greenhouse gas emissions,” via The Washington Post.
— “EPA is letting cities dump more raw sewage into rivers for years to come,” via The New York Times.
— “Campaign crunch time forces progressives to eye private jets,” via the Associated Press.
— “Investment giant BlackRock marks a major milestone in coal divestment movement,” via S&P Global Market Intelligence.
THAT’S ALL FOR ME!
