OVERNIGHT ENERGY: Energy Secretary faces new tests for agenda

Welcome back to OVERNIGHT ENERGY, E2’s daily roundup of the energy news you need to know and a look ahead to tomorrow’s action. Please send tips and comments to Ben Geman, ben.geman@digital-staging.thehill.com, and Andrew Restuccia, arestuccia@digital-staging.thehill.com.

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STATE OF
PLAY: Chu faces a new energy reality

Energy Secretary Steven
Chu will meet Thursday morning with his Secretary of Energy Advisory
Board, a group of heavyweight experts
that dispense advice on the department’s agenda.

The meeting
will “focus on the importance of innovation in maintaining global
competitiveness,” DOE said. But Chu, two years into his tenure, might
want advice on other topics as well.

As the Obama
administration’s third year begins, Chu finds himself and his agency in
a very different place.

He began his tenure amid a massive
influx — tens of billions of dollars — of stimulus cash into the agency. At
the same time Chu has frequently said
that putting a price on carbon would provide a vital market signal that
green energy is here to stay.

Two years later, climate
legislation is dead. And Chu is preparing to face House Republicans who
are vowing to cut spending at a time when administration officials call
low-carbon energy investments vital to the economy’s future.

And
beyond just spending issues, Chu faces tough GOP inquiries regarding the
fate of the stimulus dollars, the Obama administration’s decision not
to build the high-level nuclear waste repository at Yucca Mountain, and
others.

“It is kind of a one-eighty,” said Linda Stuntz, an
electricity industry lawyer who was a senior Energy Department official
under President George H.W. Bush.

Chu, a Nobel Prize-winning
physicist, did not have a political background when he became Secretary
after leading the Lawrence Berkeley National Laboratory. Stuntz said
that as a result he might not face as much fallout as officials who are
political veterans.

But Stuntz added that the shift in power on
Capitol Hill nonetheless “is going to put a new spotlight on him.”

“I
think he is going to have to be able to deal with oversight, to explain
that this spending is wise, and how the department has been good
steward of the resources it has gotten,” Stuntz said.

“That,”
she added, “is going to be a challenge.”

NEWS BITES:

Reilly calls for drilling safety
treaty with Mexico

National oil spill commission co-chairman
William Reilly called on the Obama administration to think about
negotiating a treaty with Mexico and possibly Cuba that would lay out
uniform safety standards for offshore drilling in the Gulf of Mexico.
Reilly, a former administrator of the Environmental Protection Agency,
said it’s important to have uniform standards because an oil spill in
foreign waters would affect the United States. 

API working
to combat conclusions of spill commission report

The American
Petroleum Institute, the country’s most powerful oil and natural gas
trade association, is working overtime to push back against the
assertion in the oil spill commission’s final report that there are
“systemic” problems within the oil industry. API Upstream Director Erik
Milito criticized the conclusion in remarks Wednesday at a conference on
ocean energy. Milito also stressed his criticism of the report to a
number of reporters after his remarks.

An API spokesman said the
group will underscore that “the industry’s first priority is a culture
of safety” in upcoming meetings with lawmakers and administration
officials.

Shimkus to investigate Yucca Mountain

The
Hill got its hands on a copy of the House Energy and Commerce
Committee’s energy
and environment agenda Wednesday. Here’s one more tidbit to
add: Rep. John Shimkus (R-Ill.), who will chair the panel’s environment
subcommittee, is planning to focus on EPA’s superfund program and the
Obama administration’s efforts to abandon the Yucca Mountain nuclear
waste repository.

Shimkus told The Hill Tuesday night that he
plans to ask Obama administration officials why they abandoned Yucca
Mountain. “We really have to ask the tough questions,” he said. “Why did
we pull the plug and was it all politics. I think people know the
answer to that, but you should go through the process of asking the
questions.”

Chu on state dinner guest list

Energy
Secretary Steven Chu is among the attendees at Wednesday night’s White
House state dinner for Chinese President Hu Jintao, joining former U.S.
presidents and other high-profile guests.

Oil group wary of
Interior overhaul

An oil industry group said Wednesday that
the Interior Department’s ongoing overhaul of its offshore energy
program will create new “uncertainty” about drilling.

Interior on
Wednesday detailed
plans to separate the leasing and development program from
environmental and safety enforcement. The agencies will be called the
Bureau of Ocean Energy Management and the Bureau of Safety and
Environmental Enforcement — a division that worries the National Ocean
Industries Association.

“It seems that offshore operators will
now need to communicate with one agency (BSEE) to obtain permits, but
those permits will be reliant upon swift completion of environmental
review by another agency (BOEM), thus creating the possibility for
further bureaucratic delay,” said NOIA President Randall Luthi, who
added that the “real test” is whether deepwater drilling permits get
rolling again in the near future.

ON TAP THURSDAY I: Ag
Secretary talks renewables

Agriculture Secretary Tom Vilsack
will make several energy-related announcements in an afternoon press
briefing.

“The Secretary will announce the funding of new
biorefinery projects under the 2008 Farm Bill’s Biorefinery Assistance
Program (Section 9003) and will announce that USDA has provided funding
to recipients in 33 states to support the production and usage of
advanced biofuels. Additionally, the Secretary will announce the
selection of funding recipients under the Rural Energy for America
Program and he will discuss the status of final energy program rules,”
an advisory states.

ON TAP THURSDAY II: Energy and Commerce
Committee gets organized

The House Energy and Commerce
Committee will hold a formal organizational meeting Thursday morning.
The committee lineup came more sharply into focus Wednesday when
Democrats decided on their subcommittee

ranking member slots, which Republicans addressed weeks ago.

IN CASE YOU MISSED IT…

Another busy day at E2. We obtained the Energy and Commerce Committee’s energy and environment agenda. We also reported on the Interior Department’s efforts to restructure its drilling functions, but noted that the department’s top drilling official wouldn’t get specific on when deepwater drilling will resume in the Gulf of Mexico. We also picked up on one of the spill commission co-chairman’s criticisms of calls to “drill, baby, drill.”

Then we gave you an update on energy talk during Chinese President Hu Jintao’s White House visit.

Meanwhile, Democrats announced their membership on two key committee: the Natural Resources Committee and the Energy and Commerce Committee.

We also reported on the chemical industry using the administration’s new regulatory framework to attack key EPA rules. And we unraveled a wonky federal report on carbon markets.

AROUND THE WEB

Investigators
detail likely cause of West Virginia mining blast

“Federal
investigators said on Wednesday a small fire caused by a methane or
natural gas leak likely set off a massive blast of coal dust that killed
29 miners at Massey Energy’s . . .  coal mine last year,” Reuters
reports.

“Several sprinklers that might have quashed
the initial explosion were not functioning at Massey’s Upper Big Branch
mine, according to a preliminary assessment by officials at the Mine
Safety and Health Administration.”