The Energy 202: Oil industry worries about Trump trade and shutdown standoffs

But a slew of trade issues threaten to derail that success. The head of the nation's largest oil and gas trade group warned that trade tensions stoked by Trump between the United States and some of its trading partners — in particular, China — could make it more difficult for U.S. producers to sell their products abroad, or even deliver them to market.

Among the top concerns mentioned by Mike Sommers, the new head of the American Petroleum Institute, is the effect of the U.S.-China trade conflict on the nascent liquefied natural gas business in the United States.

A boom in fracking over the past decade has given the United States a glut of natural gas that has not only reduced the nation's dependence on foreign oil but is poised to turn the nation into a net energy exporter.

U.S. gas producers have found buyers for liquefied natural gas, which is cooled and compressed to be stored and shipped, throughout Central and South America, East Asia and Europe. 

But it is China that is set to become the biggest importer of natural gas globally, according to the International Energy Agency, as the world's most populous nation tries to stop burning as much coal to generate electricity while still meeting the energy demands of more than 1.4 billion people.

The U.S. oil and gas industry doesn't want Trump's problems with China to get in the way of gas sales there. Already, U.S. exports of natural gas plummeted from 10.6 billion cubic feet in July 2018 to none two months later after China threatened retaliatory tariffs on U.S. LNG. Exports later jumped to 7.2 billion cubic feet in October.

“We know that if the United States is not providing LNG to China, someone else will,” Sommers said during an annual speech delivered to oil executives and lawmakers in Washington. “Other forces within the world, one, don't produce in a way that is as environmentally clean as the United States does and, two, those regimes certainly aren't favorable to the United States.”

Earlier in Trump's tenure, the renegotiation of the North American Free Trade Agreement was the biggest trade concern for the oil and gas sector. The industry wanted to ensure the new pact treated international investors favorably after the Mexican government decided in 2013 to open the country to oil exploration and production by foreigners and investment began pouring in from giants such as ExxonMobil and Chevron.  

The oil and gas industry largely got what it wanted out of the rebranded United States-Mexico-Canada Agreement (USMCA), and is promising to lobby Congress for the passage of the trilateral trade deal.

For that effort, the oil industry hopes for some relief on tariffs. Levies of 25 percent that Trump placed on foreign-made steel have dinged the oil industry, which relies on imports to cheaply build pipelines. A shale pipeline project in Texas by Houston-based Plains All-American Pipeline was denied an exemption by Commerce Department from Trump's steel tariff.

“This is a major issue for us,” Sommers told reporters in a media call Tuesday before his address. "We're working closely with the administration to clear this matter up, particularly as we lead up to advocacy for the USMCA."

More immediately, Sommers said, the industry wants to see Trump and congressional Democrats end the partial shutdown of the federal government so that Trump appointees at federal agencies can continue revising environmental regulations that oil and gas businesses deem overly burdensome.

“A longer shutdown certainly isn't good for this industry,” Sommers said. “We want to make sure that the efforts to put in place smarter regulations continue.”

Sommers took the helm of API after its decade-long leader, Jack Gerard, stepped down from the job last year. Sommers, once a top aide to then-House Speaker John Boehner (R-Ohio), continued an effort to revamp the trade group's rhetoric on the biggest environmental issue of the day -- climate change -- as many activists and new Democratic members of Congress demand an end to oil and gas drilling.

“The risks of climate change are real,” he said. “Industrial activity around the globe impacts the climate.”

At the same time, Sommers played down a nascent effort among House Democrats to develop a "Green New Deal" to transition to expand renewable power to meet 100 percent of the nation's power needs.

“Right now from what we've seen of the Green New Deal,” he said, “it's really just a plan to have a plan.”

SHUTDOWN WATCH

Cleanup planned for one park: Joshua Tree National Park will have cleanup crews come in Wednesday because of damage the park has sustained, including the destruction of its namesake trees, the Los Angeles Times reports. 

After initially saying the park would close starting Thursday for the duration of the shutdown, officials later said it would open by the end of the week if the planned cleanup is complete. “Law enforcement rangers will continue to patrol the park and enforce the closure until park staff completes the necessary cleanup and park protection measures,” said a park statement issued Tuesday.

The administration’s own policies are being affected: Parts of the president’s agenda, including efforts to roll back President Obama's environmental regulations and to push for expanded oil and gas drilling, have been stalled by furloughs at the Interior Department and at the Environmental Protection Agency, Politico reports.

The efforts include a “push by EPA to ease the Obama administration’s limits on toxic pollution from power plants and greenhouse gas emissions from cars’ and trucks’ tailpipes, as well as sweeping protections for wetlands and waterways,” per the report.

And at Interior, the shutdown has delayed the release of offshore drilling plans to open areas in the Atlantic and Pacific for oil and gas rigs.

Smokey Bear was still working — until now: The head of the Forest Service participated in the Rose Bowl parade on the Jan. 1 along with Smokey Bear, even as thousands of the agency’s employees have been furloughed during the shutdown.

The Forest Service used Smokey Bear licensing revenue to pay for the trip, which did not violate federal law, but now the administration is clamping down on travel, The Post’s Juliet Eilperin and Lisa Rein report.

The White House has “directed agencies to cancel all travel for their employees — including Smokey Bear — during the budget impasse unless it is critical to an agency’s mission,” they write. “The new policy, which affects even departments that are fully funded such as Energy, Veterans Affairs and Defense, reflects optics as much as a legal determination. With 800,000 federal employees either furloughed at home or working without pay, White House officials said, allowing federal officials to travel sends a questionable message.”

— EPA moves to ban toxic paint stripper for some (but not all) uses: The agency is proposing to allow commercial operators to continue using a toxic chemical often used in paint strippers if they undergo training while banning regular consumers from using the product, The Post’s Juliet Eilperin and Brady Dennis report.

But families of people who have died from exposure to the chemical, called methylene chloride, along with Democratic lawmakers have repeatedly called on the EPA to issue a more thorough ban. 

“Despite explicit assurances provided to my office that EPA would finalize a ban that protected both consumer and commercial users from this dangerous chemical, the Trump EPA appears to have failed to live up to those assurances,” said Sen. Thomas R. Carper (Del.), the top Democrat on the Senate Environment Committee.

— Dems introduce bills to stop offshore drilling: On Tuesday, a group of House Democrats, with the backing of committee heads Reps. Frank Pallone Jr. (D-N.J.) and Raúl Grijalva (D-Ariz.), introduced a suite of bills meant to stymie offshore drilling across swaths of the Atlantic and Pacific.

"Doubling down on offshore drilling would be a huge mistake, and we’re proud to work together to make sure we take a better course," Grijalva said in a statement.

The legislative proposals comes as the Bureau of Ocean Energy Management under Trump continues to prepare a plan to open some new portions of the Atlantic, Pacific and Gulf of Mexico to drilling despite bipartisan local opposition.

— Pallone pooh-poohs ban on fossil-fuel donations: The new chair of the House Energy and Commerce Committee said it was "too limiting" for members of his powerful panel to refuse donations from fossil fuel companies and related industries despite calls from many new House Democrats to do just that.

"If you start going down that road, then nobody can contribute to you," Pallone said in an interview on WNYC's "The Brian Lehrer Show.” “Ultimately you have to finance your campaign, and if you start saying that just because you’re on a committee, that nobody associated with any of the issues that the committee faces can contribute, I just think that’s the wrong way to go." 

— Republican AG joins suit against Trump: South Carolina’s attorney general Alan Wilson became the first GOP attorney general to join a lawsuit filed against the Trump administration to block permits for seismic testing off the Atlantic Coast.

Wilson on Monday joined the suit, brought by nine Democratic state AGs as well as nine environmental groups and 16 cities in South Carolina, reports The State, a Columbia, S.C.-based newspaper. The move was also supported by Republican Gov. Henry McMcaster, a move that signals “a political rebellion of sorts by two top elected S.C. Republican officials who supported Trump,” per the report.

—  Florida's new GOP governor cites environment as key agenda item: During his swearing-in ceremony as Florida’s newest governor, Republican Ron DeSantis listed the environment as a key priority, referring to issues with toxic algae and the impact it has on the state. “People want to come to Florida because of its natural beauty,” DeSantis said, according to the Orlando Sentinel. “Tourism is not only a pillar of our state’s economy, it helps spread the tax burden to non-Floridians, limiting taxes on our citizens. But this could be in jeopardy if we do not solve our pressing environmental problems."

But: Some environmentalists in Florida are cautiously optimistic regarding DeSantis, who promised to restore the Everglades and to oppose offshore drilling but whose voting record in Congress earn him a lifetime score of just 2 percent from the League of Conservation Voters. "Past performance does not always indicate future returns,” Florida Conservation Voters Executive Director Aliki Moncrief told the Sarasota Herald-Tribune. “So, we’re hopeful that will be the case with Gov. DeSantis.”

— “Complete contempt for America’s endangered wildlife”: The Center for Biological Diversity filed a formal notice of its intent to sue the Trump administration for failing to protect 26 animals and plants under the Endangered Species Act. The environmental advocacy group says the Trump administration failed to follow through on a 2016 U.S. Fish and Wildlife Service plan that aimed to protect rare species including American wolverines. “In its failure to provide protection for these more than two dozen imperiled species, the Trump administration’s showing complete contempt for America’s endangered wildlife,” Noah Greenwald, the Center’s endangered species director, said in a statement.

— IBM announces high-resolution global weather forecast model: "When IBM bought the Weather Company in 2016, it wasn’t clear what the long-term plan was for the acquisition, or how IBM would leverage the company’s specialties," The Post’s Angela Fritz reports. "On Tuesday, IBM parted the clouds on why it got into the weather business." The company announced it will launch a forecast model this year, “combining the trove of meteorological data from the Weather Company with the tech giant’s supercomputing power." The company’s senior vice president for global forecasting told Fritz the model seeks to be “the most accurate source of short term (1-12 hours ahead) weather forecasts” in areas of the world underserved by current modeling, such as South America and Africa.

— State board greenlights pipeline compressor station permit in African American community: Virginia’s Air Pollution Control Board voted unanimously Tuesday to approve a permit for a natural gas compressor station in a historic African American community. The board’s meeting was met with crowds of demonstrators who vowed to keep protesting the facility, The Post’s Gregory S. Schneider reports. “Opponents have called the decision to put the compressor in Union Hill a matter of environmental racism, and in recent weeks prominent environmentalists and celebrities — including former vice president Al Gore and actor Don Cheadle — have signed onto letters urging the state to oppose it,” he writes. “Dominion has said it needs to site the compressor in Union Hill because it must hook into an existing natural gas pipeline that runs through the area.”

Today

• The National Council for Science and the Environment’s 2019 annual conference continues.
• The Center for Strategic and International Studies holds an event on “The Launch of the Stephenson Ocean Security Project."
• The USAID holds an event on “Emerging Markets for U.S. Smart Grid Suppliers and Investors in Africa, Asia and Latin America."

Coming Up

• The Environmental and Energy Study Institute holds an event on “Reframing Energy for the 21st Century” on Friday.

— "Trump Trash": California Democratic Reps. Jackie Speier and Jared Huffman took garbage they cleaned up in national parks in their state and delivered it in front of the White House to urge the president to end the partial government shutdown.