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Energy Update, March 25

March 28, 2016

In the States

AK – Governor Bill Walker will seek the state legislature’s approval to sell a significant part of the state’s royalty crude oil. The current plan would sell oil of up to 25,000 barrels per day to Tesoro Alaska, one of the country’s largest refining companies, under a five year contract. The state Department of Natural Resources (DNR) recently concluded that the sale, which is projected to generate about $45 to $56 million in revenue, is in the state’s best interest. The DNR’s decision follows a favorable recommendation to the state legislature from the Alaska Royalty Oil and Gas Development Board, which oversees proposed royalty sales. Alaska is currently facing a $3.8 billion budget deficit,  largely attributable to low oil and gas prices. Walker administration plans to sell much of state’s royalty oil to TesoroThe Alaska Dispatch News

MA – Governor Charlie Baker said he would support efforts by the General Court, the state’s legislature, to pass an omnibus energy package that helps “to spur the development of offshore wind.” The Governor, in his message to legislators, also reiterated his primary focus of allowing the state’s utilities to solicit up to 2,400 megawatts of Canadian hydroelectricity, which the Governor notes will help the state meet its carbon emissions targets. Concurrent with the Governor’s announcement, three former secretaries of energy and environmental affairs, all under former Governor Deval Patrick, announced their support of Governor Baker’s plans. The state House of Representatives is expected to begin debate on a comprehensive energy bill in April. Baker amenable to offshore windThe Commonwealth and Former Patrick secretaries have Baker’s back on hydropower pushWWLP 22

WY – Governor Matt Mead published his administration’s updated statewide energy strategy. The Governor’s new plan, which builds upon previously-issued goals in 2013, seeks to “make coal a more viable resource and [includes] efforts to grow the state’s wind-energy sector.” Comparing the original and updated energy strategies, Governor Mead noted that 29 of the 47 energy-, conservation-, and economic development-focused initiatives listed in the initial plan were completed, including promoting liquefied natural gas and updating requirements around oil and gas operations. The 2016 strategy features 11 new initiatives, including completing an inventory of state and federal cooperative agreements, reviewing state oil and gas environmental regulations, and executing timely energy audits to improve efficiency. “Wyoming has a track record of excellence in energy development and stewardship,” said Governor Mead. “The energy strategy provides a systematic approach. The strategy is dynamic and this update continues this important work.” Mead unveils a new energy strategy to reflect the timesThe Casper Star Tribune

Federal and Regional

The Obama administration released a revised proposed offshore leasing plan that “eliminates the administration’s initial plan to auction off drilling rights in as many as 104 million acres of the mid- and south-Atlantic in 2021.” The modified program, however, allows for the selling of oil and gas leases in the Gulf of Mexico and in the Arctic waters, namely in the Chukchi and Beaufort seas. The policy change followed months of lobbying by both environmentalists and coastal communities in favor of the alteration and those opposed, including the oil industry and some Governors, principally Nathan Deal of Georgia, Nikki Haley of South Carolina, and Terry McAuliffe of Virginia. The revised proposal, which does not affect the oil industry’s existing drilling rights, is subject to public comment, which may further impact the final leasing plan that is expected to be completed by the end of this year. “This is a balanced proposal that protects sensitive resources and supports safe and responsible development of the nation’s domestic energy resources to create jobs and reduce our dependence on foreign oil,” said Interior Secretary Sally Jewell. Obama bars Atlantic offshore oil drilling in policy reversalBloomberg

A bipartisan group of 19 Senators wrote to Environmental Protection Agency (EPA) Administrator Gina McCarthy, urging her to set higher blending targets under the national Renewable Fuel Standard (RFS) in 2017. The EPA retroactively set blending targets for the RFS for 2014, 2015, and 2016 last November and is expected to issue the 2017 targets in the coming weeks. According to the Senators, the EPA’s setting of low blending targets in previous years, primarily due to concerns that higher percentages could cause vehicle issues and the lack of distribution infrastructure, does not follow congressional intent. “We need a strong RFS, and we need more biofuels. “We expect that you get the program ‘back on track’,” wrote the Senators, “and we look forward to seeing a proposed rule released on time that removes the distribution waiver and re-establishes the United States as a leader in the biofuel sector.” Senators want higher blending targets for RFS in 2017Morning Consult

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