Con Edison Calls for Non-Pipeline Solutions to Manage Natural Gas Demand

New York gas provider Con Edison published notification that it is launching a Smart Solutions for Natural Gas Customers Program in order to manage the growth of peak demand and advance environmentally-sound energy, while considering the overall cost impact to customers. The program is designed to meet customers’ heating needs cost effectively and contribute to the achievement of state and local environmental goals, without requiring the development of new pipelines.

Con Edison will issue an RFP in mid-December for non-pipeline solutions to help reduce natural gas demand, particularly calling for innovative and substantial non-pipeline projects that can reduce winter peak day gas load or provide gas supplies from local alternatives.

President Trump Says He Remains committed to the RFS in Meeting with Senators Over RFS Compliance Concerns

On December 7, at the request of Senator Ted Cruz (R-TX.), President Trump met with a group of Senators to discuss the Renewable Fuel Standard (RFS) program and possible reforms. Those in attendance were largely Senators from States with oil interests (particularly states with merchant refiner interests), as well as EPA Administrator Pruitt, Agriculture Secretary Perdue, and Energy Secretary Perry. 

Refiners, particularly merchant refiners, have opposed the RFS and have raised concerns with high RIN prices largely related to ethanol under the “implied conventional” biofuel requirement.  Statements from those attending the meeting indicated that President Trump expressed a desire to help refiners, but also wants to protect the interests of farmers and remains committed to the RFS. Sen. Cruz indicated that there will be ongoing discussion, including reconvening with President Trump next week to discuss potential solutions. 

EPA Administrator Pruitt Fields Questions from House Energy & Commerce Subcommittee on Environment

EPA Administrator Pruitt fielded questions at a hearing before the House Energy & Commerce Subcommittee on Environment, entitled “The Mission of the U.S. Environmental Protection Agency.”

During the question and answer portion of the hearing, some of the Subcommittee members raised questions regarding the RFS. Rep. Green (D.-Tex.) asked if EPA would limit the ethanol portion of the program to 9.7% of the gasoline pool, which has been a request of the refining industry, and Rep. Olson (R.-Tex.) asserted EPA had “leeway” moving forward until Congress may act. Rep. Loebsack (D.-Iowa) asked Administrator Pruitt about the cellulosic volume for 2018, which he noted was still less than what was finalized for 2017.  

Pruitt's responses gave no indication of any potential actions beyond that EPA is monitoring and concerned with issues raised by Subcommittee Members. He did note, in response to a question, that EPA has begun its analysis of the environmental impacts of the RFS program, which is required by statute and the prior Administration had agreed to complete.

Joint House/Senate Conference Committee Working to Produce Final Tax Reform Bill

With both the House and Senate having approved their respective versions of H.R. 1, the Tax Cuts and Jobs Act, a joint House/Senate conference committee has been formed to reconcile the differences between the measures. 

The conferees are expected to ultimately report a final package for both the House and Senate to consider prior to December 22. If the conference report is approved, it will be sent to the President to sign into law. Republican Leadership and the White House have made completing tax reform legislation prior to Christmas their top legislative priority.

EPA Issues Interpretation of its RFS Periodic Review Obligations

On November 30, U.S. EPA published a document titled "Periodic Reviews for the Renewable Fuel Standard Program,” describing EPA's interpretation of its requirement under the RFS [in 42 U.S.C. §7545(o)(11)] to conduct periodic reviews of existing technologies and the feasibility of compliance with the RFS related to prescribed volume requirements [in paragraph (o)(2)(B)].

Texas Governor Asks EPA for Additional Waivers Under RFS

On December 1, the day after EPA issued its final 2018 standards under the Renewable Fuel Standard (RFS) program, Governor Abbott (R) of Texas sent a letter to EPA Administrator Pruitt requesting EPA use its general waiver authority, citing the number of refiners in the State of Texas allegedly being harmed by high RIN prices. The letter appears to be limited to a request that EPA reduce the D6 requirements (sometimes referred to as the implied “conventional biofuel” requirement) under the RFS to 9.7% of the gasoline pool. 

This letter is in addition to a similar letter sent by the Governor of Pennsylvania in November, which also cited the economic impacts on refiners in the state. EPA has since indicated it will respond to the Pennsylvania Governor’s request in a separate action.

EPA Finalizes Denial of Requests to Change “Point of Obligation”

On November 30, U.S. EPA published its final determination to deny requests to change the “point of obligation” under the Renewable Fuel Standard (RFS) program. The decision was consistent with EPA Administrator Pruitt’s earlier indications, including an October 2017 letter to seven Senators. 

Previous requests generally sought to move compliance with the RFS volume requirements from refiners and importers of gasoline and diesel fuel to entities downstream (e.g., “position holders” at the rack). The decision re-affirmed that EPA's existing definition of “obligated party” applies “in all years going forward unless and until it is revised.” 

Oil and gas companies to engage in voluntary program to reduce methane emissions

By Amy Harder, Axios.

The American Petroleum Institute is announcing today a new voluntary program to cut emissions of methane, a potent greenhouse gas, and other air pollution from oil and natural gas wells. 

Why it matters: This is the first time in API's nearly 100-year history that it has launched a program to cut air pollution. It's also the most concrete sign climate change is becoming a significant mainstream concern within the disparate oil and gas industry. Moves like this by trade groups represent the lowest, not highest, common denominator for positions within any given sector.