E2-Wire

OVERNIGHT ENERGY: EPA Administrator Jackson to face GOP critics … again

by Andrew Restuccia and Ben Geman - 05/23/11 11:47 PM ET

Jackson, in her written testimony, says the agency is working to provide the necessary analysis to EPA’s Environmental Appeals Board, which is reviewing two permits for Shell Oil’s exploratory drilling operations in the Arctic. The permits came before the appeals board after they were challenged by Alaska residents, Jackson notes.

“I am confident that we will give the Board the analysis it has called for, in time for the permits to be upheld before the start of the next drilling season,” Jackson says in her written testimony.

Republicans and some drill-state Democrats
say EPA is dragging its feet in issuing air pollution permits necessary
for Arctic drilling to move forward, citing a decision by Shell to
scrap plans to drill in the region this year.

Jackson will also stress that EPA is “committed to promoting timely and safe domestic natural gas development,” while noting the agency must “use its authorities to protect local residents if a driller endangers water supplies and the state and local authorities have not acted.”

David Hayes, Interior’s deputy secretary, will also testify at the hearing. He’ll defend Interior’s policies amid GOP claims that the department is not moving quickly enough to expand domestic oil and gas drilling.

Hayes will outline the administration’s wish list for legislation to reform offshore drilling. Interior Secretary Ken Salazar discussed the wish list last week while testifying before the Senate Energy and Natural Resources Committee.

Cummings
to tout oil speculation report: Expect Rep. Elijah
Cummings (D-Md.) to tout a report he released Monday on potential oil
market speculation at Tuesday’s House Oversight and Government Reform
Committee hearing.

The report’s top-line finding? “Addressing
excessive speculation offers the single most significant opportunity to
reduce the price of gas for American consumers.”

Cummings, the
ranking Democrat on the House Oversight panel, called on committee
Chairman Darrell Issa (R-Calif.) Monday to launch an investigation into
the role of speculation in high oil and gas prices.

NEWS BITES:

House Energy panel to advance bills to quantify effect of EPA
rules, speed up Arctic permitting: The House Energy and
Commerce Committee’s Energy and Power subcommittee will pivot Tuesday to a pair of GOP energy
priorities: enumerating the effects of the Environmental Protection
Agency’s regulations and speeding up the permitting of offshore drilling
projects in the Arctic.

The subcommittee will vote on two pieces of
legislation Tuesday aimed at addressing the priorities.

The
first bill, authored by Reps. John Sullivan (R-Okla.) and Jim Matheson (D-Utah), would require
President Obama to set up a panel charged with determining the
“cumulative and incremental impacts” of various EPA regulations.

The
panel, which would be chaired by the Commerce secretary, would include
among its membership a number of Cabinet secretaries.

It would be
required to consider the effect of EPA regulations on the country’s
competitiveness, electricity prices, fuel prices and jobs, among other
things.

A final report on the panel’s findings would be due to
Congress by Aug. 1, 2012.

Republicans have accused EPA officials
in hearings over the last several months of conducting inadequate
cost-benefit analyses of the agency’s regulations. Republicans hope the
analysis will shed light on what they believe are the detrimental
economic effects of the regulations.

The Energy subcommittee
will also vote Tuesday on a discussion draft aimed at speeding up EPA
consideration of air pollution permits for oil-and-gas drilling projects
off Alaska’s coast.

Obama
sought to show that he was serious about expanding Arctic drilling
earlier this month, announcing that he’ll set up a task forced aimed at
coordinating efforts to permit projects off Alaska’s coast.

Pawlenty ethanol stance consistent with other farm-staters: Now-official GOP White House candidate Tim Pawlenty’s call to phase out ethanol subsidies isn’t quite the gut-punch to the fuel’s backers on Capitol Hill that it might seem.

Pawlenty,
in his Monday speech in Iowa that formalized his ongoing candidacy,
called for a gradual end to the support. “The truth about federal
energy subsidies, including federal subsidies for ethanol, is that they
have to be phased out,” he said.

Ethanol is popular in the corn
belt, but there’s already a sense that the ethanol blenders’ credit —
which helps guarantee a market for ethanol producers — is approaching
its twilight. A number of key ethanol backers, led by Sens. Kent
Conrad (D-N.D.) and Chuck Grassley (R-Iowa), have already floated legislation that would gradually reduce the tax credit for blending ethanol into gasoline.

Sen.
John Thune (R-S.D.) said he wasn’t aware of Pawlenty’s specific remarks,
but noted that there’s widespread recognition that the current tax
credits aren’t likely to remain.

“I think there is a recognition
that the VEETC [volumetric ethanol excise tax credit] in its existing
form is probably going to have to be reformed,” Thune told reporters in
the Capitol Monday. “That is something that even I think the industry
acknowledges is going to have to happen,” he said.

A key tax
credit that benefits ethanol producers is slated to expire at year’s
end — Grassley and others calling for a gradual phase-out are
battling a bloc led by Sens. Dianne Feinstein (D-Calif.) and Tom Coburn
(R-Okla.) that wants to quickly kill the tax benefits outright.

Administration to make ‘major’ vehicles announcement: Top Obama administration officials will announce “major steps” Tuesday toward Obama’s goal of transitioning the entire federal fleet to fuel-efficient vehicles by 2015.

Energy Secretary Steven Chu, General Services Administrator Martha Johnson and White House Council on Environmental Quality Chairwoman Nancy Sutley will appear at a press event on the announcement.

Salazar aide heads for Biden’s office: Kendra Barkoff, Interior Secretary Ken Salazar’s spokeswoman, is leaving Interior to become a press aide to Vice President Joe Biden.

“She has extensive communications and press experience and will be a tremendous asset to our office and the entire White House,” Biden said in a statement about Barkoff, who is Salazar’s deputy communications director and press secretary.

Barkoff is no stranger to pressure — she was part of Interior’s team during last year’s BP oil spill and the overhaul of its troubled offshore drilling oversight branch.

Prior to her stint at Interior, Barkoff worked on Capitol Hill for senators including Bob Casey (D-Pa.), Dick Durbin (D-Ill.) and Maria Cantwell (D-Wash.).

Menendez eyes chat with Biden on oil industry tax breaks: Sen. Robert Menendez (D-N.J.), who is leading the charge to strip oil industry tax breaks, said he plans to approach Biden about ensuring the issue is addressed in the VP’s deficit-reduction talks with a small bipartisan group of lawmakers.

Menendez said in the Capitol Monday that he plans to “speak to the vice president about it in the midst of his negotiation so he knows that there are a fair number of us that would like to see it included.”

A Menendez bill backed by Democratic leadership to nix an estimated $21 billion in incentives for major oil companies over a decade sputtered on the Senate floor last week. But senior Democrats are insisting that it’s in the mix as part of broader fiscal policy negotiations around legislation to raise the debt ceiling.

ON TAP TUESDAY:

House panel delves into rare-earth elements: A panel of the House Natural Resources Committee will hear from several experts at a hearing called “Strategic and Critical Minerals Policy: Domestic Minerals Supplies and Demands in a time of Foreign Supply Disruptions.”

The issue is key because a number of low-carbon energy technologies rely on rare-earth elements, and China is the world’s dominant supplier, which is raising fears that technologies to help displace foreign oil will create their own energy security problems.

Gas drilling in focus: The National Press Club will host a discussion on the effects of expanding U.S. gas development that features anti-drilling activist Adrian Kuzminski and Alan Krupnick of Resources for the Future.

IN CASE YOU MISSED IT…

Here’s a quick roundup of Monday’s E2 stories:

— Greens, industry draw battle lines in fight over oil pipeline
— Pawlenty hits Obama on gas prices out of the gate
— Pawlenty in Iowa: Phase out ethanol subsidies
— Vatican invoked on climate change
— Interior, NOAA agree to offshore energy collaboration
— Upton: Dems’ push to link pipeline to Kochs ‘outrageous’
— Vitter to block Salazar’s salary increase