THE LOWDOWN: U.S. crude oil prices slipped to a new 18-year low on Friday, ending the week on a decline.
At one point on Friday, West Texas International crude prices dropped to as low as $17.31 per barrel before eventually setting at $18.27. They had opened Friday at $20 per barrel.
Prices have seen significant declines in recent weeks amid lower levels of demand linked to the coronavirus pandemic, as well as trade disputes between Saudi Arabia and Russia.
Since then, both the U.S. and major foreign producers have agreed to cutting some oil production, a move they hoped would stabilize markets while demand falls worldwide.
A group of major oil producing countries, including Russia and Saudi Arabia, known as OPEC+ has recently agreed to reduce their oil output by just shy of 10 million barrels a day for May and June.
The U.S., Brazil and Canada, which are not part of the group, will cut an additional 3.7 million barrels.
The U.S. economy at large has also struggled amid the coronavirus pandemic, with skyrocketing unemployment claims, although stocks have posted some gains in recent days.
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STUCK IN THE MIDDLE WITH YOU: The Environmental Protection Agency (EPA) faced threats from all sides Friday as environmental groups and utilities filed their first briefs in a high-stakes legal battle over a Trump administration rollback of power plant regulations that coal companies have also blasted.
Twenty-two states and various environmental groups have challenged the Affordable Clean Energy (ACE) rule, the Trump administration’s replacement to the much-litigated Clean Power Plan implemented during the Obama administration.
The ACE rule aims to give states more time and authority to decide how to implement the best new technology to ease net emissions from coal-fired plants. The rule does not set any standards to cap those emissions.
But environmental groups worry the standards are so limited in the pollution controls it asks power producers to install that if the rule is upheld in court it could hamstring future administrations from addressing climate-altering pollution.
The legal battle kicked off Friday, as the first round of detailed legal briefs were due to the U.S. Court of Appeals, where environmental groups are urging the court to nix the Environmental Protection Agency (EPA) rule.
“The Rule is a blatant abdication of EPA’s statutory duty to protect the public from air pollution that the agency itself has repeatedly found poses grave and imminent dangers to health and welfare,” environmental groups wrote in their brief, part of a coalition between the Environmental Defense Fund, Natural Resources Defense Council (NRDC), Sierra Club and others.
In addition to not capping emissions from power plants, the rule limits regulations to things physically connected to power plant operations.
“This will result in a less than 1 percent reduction in carbon emissions from coal plants and the whole sector compared to what you’d expect with business as usual,” David Doniger with NRDC told The Hill.
“Saying you can’t do anything more than that is just wrong, and we’re asking the court to overturn that.”
Power plants have filed briefs siding with environmental groups, but coal companies have taken another approach, arguing the EPA should not have issued the new regulation at all.
A brief from Westmoreland Mining Holdings and the North American Coal Corporation argues that the EPA doesn’t have the authority to issue the regulation as the law requires a formal finding that coal “causes, or contributes significantly to, air pollution which may reasonably be anticipated to endanger public health or welfare.”
Without such a finding for coal specifically, they argue, the ACE rule should never have been written.
“EPA cannot possibly assess whether sources significantly contribute to ‘air pollution that endangers public health or welfare without identifying the ‘air pollution’ at issue, and certainly EPA cannot establish a meaningful ‘standard of performance’ without identifying the endangering pollutant,” they wrote.
Read the story here.
ETHANOL EXEMPTIONS? The Environmental Protection Agency (EPA) is weighing whether to let oil refineries skip on adding ethanol to their fuels, a move being requested by governors in oil-rich states who say the industry can’t afford the expense of blending in biofuels as oil prices plummet.
Oil prices hit a new low Friday amid a number of administration efforts to ease financial pressure on the industry. Ethanol producers, however, say they have likewise been affected as the economy tanks due to the coronavirus.
In a letter to the EPA sent earlier this week, five governors from oil-producing states said their refineries should be off the hook from meeting legal requirements to add ethanol to their products, arguing the oil industry is in too dire of financial straits to do so.
“The macroeconomic impacts of COVID-19 have resulted in suppressed international demand for refined products, like motor fuels and diesel,” wrote Texas Gov. Greg Abbott (R), Oklahoma Gov. Kevin Stitt (R), Utah Gov. Gary Herbert (R), Wyoming Gov. Mark Gordon (R) and Louisiana Gov. John Bel Edwards (D).
Having to add ethanol “present[s] a clear threat to the industry under such circumstances,” the governors said.
Gasoline demand has fallen 30 percent due to the pandemic, something ethanol producers likewise say has hurt their bottom line.
“The COVID-19 pandemic, coupled with the effects of the Saudi-Russia oil price war, has had a devastating impact on the U.S. ethanol industry, slashing production by half and leading to the idling of dozens of plants across rural America,” the Renewable Fuels Association said in a release.
Read more on the letter here.
TO INFINITY AND BEYOND: On Thursday, presumptive Democratic presidential nominee Joe Biden said he was considering creating a climate-change focused cabinet role that “goes beyond the EPA.”
He said during a digital fundraiser that, if elected president, he would consider elevating elevating several White House offices to Cabinet-level positions, including the Office of Science and Technology Policy and a global health security pandemic office as well as the climate-focused role.
He also said that he had already begun putting together a White House transition team.
Read more about his potential plans here.
OUTSIDE THE BELTWAY:
Historic ‘megadrought’ underway in California, American West, new study finds, the San Jose Mercury News reports
‘Massive’ hit looms; Wyoming lawmakers eye special sessions, the Associated Press reports
PG&E: Wildfire victims backing bankruptcy plan so far, the Associated Press reports
ICYMI: Stories from Friday…
Fuel distributors want hazard pay for their workers
Biden assembling White House transition team
EPA weighs lifting ethanol requirements for oil refiners
Green groups, coal companies push to have EPA power plant rollback scrapped
US oil prices hit 18-year-low